Pensions for SAHM's..?

[LipstickMum]

As the title suggests I am 'need' a pension that would suit me as a sahm.

At the moment I have up to date NI contributions and some savings, using my ISA allowance etc.

My dp has savings and is paying into an NHS pension which will pay out to me as well.

I had started a teacher's pension just before I gave up work before my dd was born, but literally had paid in for a couple of months. I wanted to start it up just in case I was out of the workforce for 5 years or something (18 months ago), which is quite likely.

I'm a a bit of a worrier and feel that I would like to have something else to fall back on, something that will give me/ us a regular income in 30 years time. I'm in a position to pay between £80-100 a month.

Dp keeps saying it's not worth it because I don't have an employer to subsidise payments etc. but I am convinced that there must be something out there for me.

We recently received a newsletter from our accountant that recommended stakeholder pensions for non-working spuses and children. So, now I know that something is suitable, but have no idea how to access 'understandable' information!!!

Dp has an accountant, would he be the best person to offer advice, he knows all our financial affairs after all?

Or is there a website or company who offer advice for non-working mums?

Many thanks!

well you're not earning so there's no tax incentive to save in a pension

so, if I were you I'd get a tracker ISA .. with someone like Legal and General or Virgin and save in that .. you can set up a regular DD into it then just forget about it

also find out how much the NHS pension will be worth and whether he can buy additional years to cover you both .. it may be more worthwhile DH putting more money aside

I think NHS are final salary schemes aren't they?

don't forget in a pension you get taxed on the way out (ie when claiming your pension) but the tax break goes on the way in .. ie your income tax gets added on top

in an ISA you are saving out of net earnings and its tax free on the way out

only benefit to a pension for a SAHM is that you CAN'T touch it till you're 55 at earliest .. if you can trust yourself not to squander the money stick it in an ISA

HTH

There is a tax incentive Twiglett. I believe you can get tax 'credited' on stakeholder pension contributions even if you don't pay tax! I know, sounds crazy, but it's true!

LipstickMum - ask around your friends to recommend a good Independent Financial Advisor. They'll be able to advise you on all the options, and find you the best deal to meet your requirements.

really roisin?

Thanks for your help Twiglett, Roisin etc. It was the tax incentive part that dp was talking about. So, I will find out about the 'tax credit' situation on a stakeholder pension from our accountant, unless a friend knows a good IFA.

DP is already paying additional years to cover 10 years he spent working abroad, so I'm not sure we could stretch to/would be allowed to further additional years tocover me too. And yes, it is final salary related.

Thanks so much for your advice, this is something I will get sorted in 2005 if it's the last thing I do!

I can't be the only one panicking about this can I???

You absolutely can get tax 'refund' on a stakeholder pension, even if you don't pay any tax - good eh? Not often they give you money! If you have no taxable earnings, you can pay up to £3600 per year into a stakeholder pension after the tax is credited, which works out as about £2800 out of your pocket, and the rest credited from the government. Stakeholder pensions also have specific limits on what they can charge and how they operate which (in theory) makes them more straightforward. I have one in my name (I'm not actually SAHM, but would have one even if I was) as I like having some pension in MY name.

You need to remember that this is a penison scheme - so you can't get the money until you're old enough, and then you can only have it in a limited lump sum plus a regular pension, so you canNOT get at it until then.

An INDEPENDANT finanical advisor should give some sensible advice. I sorted mine out for myself, but feel relatively clued up on basic personal finance stuff. There are lots of articles and active discussion forums on www.fool.co.uk, though there is SO much stuff there that sometimes it takes a bit of looking.

for pensions articles

stakeholder pensions

hope that helps

Was very interested to read all this, so wondered if anybody else has thoughts to add?