SAHM - private pension or just savings account?

[ParisJeTAime]

Hello

I've been a SAHM for a few years now. At first, sort of by accident, as I was made redundant. But then, we worked out that financially, it didn't make sense for me to go back to work. We have zero help with dcs and live in an area where childcare costs are significant. So, I have done evening work and weekend work and am now studying online, to help me get into a new career when my youngest goes to school.

Anyway, there's my life story, ha!

I want to save for my retirement and trying to decide whether to invest in a private pension or just a savings account.

To complicate matters, I am a US citizen, (although I've lived in the UK for many, many years). So, I have to report on any income from investments, any private pensions over a value of £25,000 and I also am limited in the savings accounts I can have. I need to avoid certain types of ISA and investment funds, like SICAVS. Nobody will advise me on this, as the cheaper financial planners don't want to touch a US citizen, as it is a minefield. The ones who will advise US citizens abroad all seem to need a minimum investment of $500,000.

Tricky!

Anyway, thanks for reading this far, if you have! Excuse essay.

Dunno if you can get one as a US citizen but a stakeholder pension allows those with no income to save with some contributions from the government. I pay into one for each of dds - if you pay in £2880 a year, the government makes it up to £3600 for non taxpayers.

Thank you! I will try and find out if I'm allowed one!

If you are an American and paying American taxes (or filing in the USA which you must be doing if you are American) then you should open an IRA or Roth IRA in the USA using dollars.

You are only permitted to have, I think, 10K outside of the USA in your name in a tax year, and then it gets complicated.

As you don’t work, I am not sure where the money for the IRA / pension will be coming from. But if it is being ‘gifted’ to you by your husband, he can ‘gift’ you, i think, up to like 100K a year tax free - for you (it depends on a number of things and changes yearly). My point is that he can gift you money into your US account and then you can deposit it into a US IRA / Roth IRA. The Roth IRA is probably the best idea for you as you don’t have any income and Roth is tax free when you withdraw, and you can start withdrawing earlier than a regular IRA.
You can google the difference between a Roth IRA and a regular IRA.
I recommend with going with something easy like Vanguard or Fidelity.
My point - and I am American also living in UK - keep it in dollars.
I also assume you pay HMRC taxes but there are dual tax laws and my understanding is the english are more forgiving than the Americans.
The biggest problem with holding a UK based pension is that it is in pounds and you - hopefully - will very quickly go above the amount of money you area allowed to hold offshore from the USA. And then you have to start filing all kinds of different forms for the IRA and it gets complicated.

Good luck!

Ah thank you mommy77! That's very useful.

Yes, I do file taxes. Not that I actually pay any, due to no personal income!