When it pays to top up your spouse’s retirement fund

Sometimes it can make more sense to pay into your spouse’s pension than your own. Natalie Stanton explains.

George Osborne seems dead set on using the UK's pension policy as a way to cut its outgoings, as we've noted on several previous occasions. It looks almost certain that the chancellor will end up cutting tax relief for higher-rate taxpayers at the next Budget in March. Now you can reclaim tax relief on pension contributions at your marginal income tax rate, but Osborne is expected to change tax relief to a single flat rate of between 25% and 33%, regardless of income. That's "free" money for basic-rate taxpayers, but it renders pensions far less attractive for those paying 40% or 45% income tax.

Obviously, this means that if you're a higher-rate taxpayer, you should be trying to put as much away in your pension as you can before the chancellor makes his move. It's likely to take the government at least 12 months to push through these sorts of changes, but there's no guarantee, so if you can act before the Budget, it's probably better to do so.

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Natalie joined MoneyWeek in March 2015. Prior to that she worked as a reporter for The Lawyer, and a researcher/writer for legal careers publication the Chambers Student Guide. 

She has an undergraduate degree in Politics with Media from the University of East Anglia, and a Master’s degree in International Conflict Studies from King’s College, London.