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Financial planning advice for sahm and carer

(5 Posts)
strongandmilky Sat 13-May-17 15:11:23

I've recently stopped working to be a full time sahm and carer for autistic ds. I'm already in the process of applying for dla, and then hopefully will be eligible for carers allowance. Would really appreciate some financial planning advice. Should I set up a private pension for Dh to pay into and also make ni contributions on my behalf? TIA

halogreen Sat 13-May-17 17:54:27

You don't need extra NI credits paid - it should be covered by child benefit and/or carer's allowance (child benefit only pays it up to age 12, but carer's will pay NI credits for as long as you're getting it).

A private pension is a good idea, as long as you're OK locking the money away until age 55+. You can pay in up to £2880 a year which gets topped up to £3600 by the government. You can also get 50% of pension contributions disregarded for carer's allowance, so if you manage to return to work in future then pension payments can bring you under the threshold for carer's allowance. If your DH is a higher rate tax payer then the tax benefits of putting the payment into his own pension are better than the top up for yourself - but then it ends up all in his name, which may or may not suit you in the future.

strongandmilky Sat 13-May-17 18:16:23

Thanks @halogreen. Dh is higher tax earner and over (though only just) threshold for child benefit. Waiting for outcome of dla application, so not sure yet whether I'll be eligible for careers allowance.

halogreen Sat 13-May-17 18:41:01

If he is only just over the child benefit threshold he could pay more into his pension which reduces his adjusted net income which would bring him under the threshold. He would get 40% tax relief on his pension contributions (and if he can do it via salary sacrifice he'll pay less NI too) while you would get 20%. So from a tax point of view, it would make more sense to pay additional contributions into his pension than one in your name.

strongandmilky Sat 13-May-17 18:53:09

Thank you. Have just been looking into life ISAs which seems to make more financial sense then a private pension for me. I'm just under the age threshold for that one but will need to hurry grin time to get the spreadsheet out and crunch all the numbers

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