Is it worth putting a lump sum into a pension at 65

[Ghs]

We have a bond that is maturing with apx £30,000 in it , we also have a couple of savings accounts that were taken out years ago with apx £40,000 in them , combined total of apx £70,000 , is it worth putting them into one of my pensions , intend to retire by next June , or put it into wife’s private pension who intends to retire at the same time , or something else , we already have bonds , Isa,s etc
Thankyou

[Mr Pointy]

Ghs said:

We have a bond that is maturing with apx £30,000 in it, we also have a couple of savings accounts that were taken out years ago with apx £40,000 in them, combined total of apx £70,000, is it worth putting them into one of my pensions, intend to retire by next June, or put it into wife s private pension who intends to retire at the same time, or something else, we already have bonds, ISAs etc

Well the first question is have you £70,000 of relevant earning in this tax year?

[Ghs]

No , I keep my wage at £50,000 , reading up
I can put 60,000 into my pension or the equivalent of my wage which ever is the lowest ? , but I’ve 3 personnel pensions , 6 work place pensions ( I’m trying to condense them at present ) so it looks not as easy as I thought , wife has 4 work place pensions so it’s probably time to get some proper advice and what way to go pension wise .
Nb I maybe understanding the £60,000 part completely wrong .
Thankyou

[YouWhatAgain]

Ghs said:

No , I keep my wage at £50,000 , reading up
I can put 60,000 into my pension or the equivalent of my wage which ever is the lowest ? , but I ve 3 personnel pensions , 6 work place pensions ( I m trying to condense them at present ) so it looks not as easy as I thought , wife has 4 work place pensions so it s probably time to get some proper advice and what way to go pension wise .
Nb I maybe understanding the £60,000 part completely wrong .
Thankyou

You can carry forward unused allowance for the past 3 years as you already have private pensions. So you could put more than £60,000 depending on what you have paid in the last 3 years.

[Nicetobenice]

You also need to factor in any unused ISA allowance for this year, and whether you will use all your ISA allowance for next year.

[NortonES2]

YouWhatAgain said:

You can carry forward unused allowance for the past 3 years as you already have private pensions. So you could put more than £60,000 depending on what you have paid in the last 3 years.

Not true, he his still limited to 50k as you can't put more than your annual salary into your pension. The unused allowance is useful if you earn over 60k

[DSMSMR]

No invest it as income producing

[Simpo Two]

Ghs said:

No , I keep my wage at £50,000 , reading up
I can put 60,000 into my pension or the equivalent of my wage which ever is the lowest ? , but I ve 3 personnel pensions , 6 work place pensions ( I m trying to condense them at present ) so it looks not as easy as I thought , wife has 4 work place pensions so it s probably time to get some proper advice and what way to go pension wise .
Nb I maybe understanding the £60,000 part completely wrong .
Thankyou

I'd say you're in a bit of a mess and need some basics sorted out. Pensions are horrendously complicated and different types have different rules. I would go to Pensionwise for free chat. Hope this is the right link: https://www.moneyhelper.org.uk/en/pensions-and-ret...

Once you've got a basic grasp of the options then you can start to make decisions. Simplifying/combining some would seem very sensible.

[_Rodders_]

NortonES2 said:

YouWhatAgain said:

You can carry forward unused allowance for the past 3 years as you already have private pensions. So you could put more than £60,000 depending on what you have paid in the last 3 years.

Not true, he his still limited to 50k as you can't put more than your annual salary into your pension. The unused allowance is useful if you earn over 60k

That rule seems to unnecessarily punish low earners.

[Nicetobenice]

_Rodders_ said:

That rule seems to unnecessarily punish low earners.

It's difficult to justify a relief from a tax you haven't paid.

[FlyingPanda]

This looks like a classic case of "you'd need to do the maths".

How much are you allowed to put in vs how good is your current pension anyway? Would you be better investing the money elsewhere (a Stocks and Shares ISA if you have any allowances left) or even a straight non-ISA investment. Pensions (in general) save you tax on the way in, but not on the way out, however, if you are planning to retire then your income will presumably be lower so perhaps less of an issue.

It all depends on what tax breaks you could get via the pension or ISAs vs how well your pension performs (which would need a crystal ball, but past performance does give some sort of a clue (albeit not much!)).

Sometimes people get lost chasing the tax savings when they'd actually have been better putting it into a general investment account.

[Mr Pointy]

Ghs said:

No, I keep my wage at £50,000, reading up I can put 60,000 into my pension or the equivalent of my wage which ever is the lowest, but I've 3 personal pensions, 6 work place pensions (I'm trying to condense them at present) so it looks not as easy as I thought, wife has 4 work place pensions so it's probably time to get some proper advice and what way to go pension wise .
Nb I maybe understanding the £60,000 part completely wrong.

Next question, are you the Director of your own company or an employee? If you are a Director then the company can make payments of up to £60k but if you are an employee then you are limited to £60k or your net relevant earnings, whichever is lower, although you would be able to use unused allowances from previous years if you had earned in excess of £60k.

Check whether any of your pensions have valuable rights or benefits before moving them but consolidation would seem sensible if there aren't any. It's usually fairly straightforward.

[C69]

Presumably you haven't taken any taxable income from any of your pensions yet? If you had, then the money purchase annual allowance (MPAA) would apply, which limits your annual pension contribution to £10,000.

Also bear in mind that pensions will form part of your estate for inheritance tax purposes from next April. Given your age, this might be a factor for you to consider as well.

[Beggarall]

I was once in a similar situation and didn't do it. The only reason to put more money into your pension now would be to reduce income tax - but only if you are in the higher tax brackets (which you don't seem to be). Otherwise I would put it in the best interest savings account you can find, draw on it to enjoy as necessary and put the rest into the ISA each year.

[Jockman]

Being a pedant there is no limit on what you can put into a pension. The limit of £60k is on the tax relief.

Otherwise, if appropriate use your wife or carry forward.

[OIC]

Jockman said:

Being a pedant there is no limit on what you can put into a pension. The limit of £60k is on the tax relief.

Not a lot of people know that.

Don't let the tax tail wag the longer outlook dog.

Are any of your pensions DB?

Using the £70,000 to buy more DB pension could give you essentially a lifetime index linked monthly payment that turns into free money after 15 or 20 years, or less depending on inflation (which is only going 1 way for at least the next 3 years thanks to Andy 'Nothingburger' Burnham).

DC pensions may do the same, but the scheme is unlikely to be as good so the maffs may not add up.

If you don't need it get it into an ISA (2 years use of both allowances), stick the lot on Nvidia and forget about it for 10 years.

NFA.

[Panamax]

I don't think it's possible for anyone to make constructive suggestions on the detail without having full knowledge of your marginal tax rates both now and in the future.

To completely side-step tax, just park it for the time being and use it to invest in future years ISA. Income tax on any income from that sum over the next couple of years will be relatively pennies. Tax free is where you want to be.

[Nicetobenice]

Panamax said:

I don't think it's possible for anyone to make constructive suggestions on the detail without having full knowledge of your marginal tax rates both now and in the future.

To completely side-step tax, just park it for the time being and use it to invest in future years ISA. Income tax on any income from that sum over the next couple of years will be relatively pennies. Tax free is where you want to be.

Completely agree with this.
There would need to be a pretty unusual set of circumstances to do anything else.

[chip*]

Retire now and spend the money!

[T697JVS]

Jockman said:

Being a pedant there is no limit on what you can put into a pension. The limit of £60k is on the tax relief.

Otherwise, if appropriate use your wife or carry forward.

True, but there is no benefit in putting the money into a pension if you don’t qualify for the tax relief