No, you cannot transfer your pension to your wife. However, you can contribute to your wife's pension if they have one, or your wife could easily open one herself. You don’t have to be working to open a pension.
Wondering if it’s possible to transfer your pension to your wife, or put it in her name? Unfortunately it’s not possible.
However, there are options to open and build up a pension in her name – you could contribute to her own pension. It’s also worth pointing out that your wife would also benefit from your pension should the worst happen and you pass away, but you can’t transfer it to her while you are still alive.
If your wife doesn’t work and doesn’t pay tax, you can make payments to her pension up to a maximum of £2,880 per year, and get a 25% bonus on what you put in (so they’ll get £3,600 per year in total). Not bad right?
If your wife does work and pays tax, you can make contributions up to her salary figure per year (up to £40,000).
Depending on how soon your wife is set to retire, you could build up a fairly substantial pension pot in a very short period of time.
Passing on your pension
The good news with pensions (among their many benefits, such as tax free saving), is that when you die, they aren’t included as part of your estate (your money), and not subject to inheritance tax.
Inheritance tax is charged if everything you own (your estate) is above £325,000 (called the threshold), and it would only apply to everything above that threshold. It’s a staggering 40%!
Your pension is separate to any of your other assets, such as a Stocks and Shares ISA, which would all be subject to inheritance tax when you die.
Although, if you left everything to your wife or partner, they would not normally have to pay inheritance tax anyway.
With a pension, you give the name of the person you want to receive your pension (your beneficiary) to your pension provider (the people looking after your pension), and they’ll pass it on when you die. It can be different to your next of kin. Your beneficiary will have to pay income tax (similar to what you have to pay on your salary) on the money if you die over the age of 75.
We hope you don’t get divorced in future, but just as a bit of background knowledge, if you do get divorced, your wife can claim a share of your pension. It would then be in her name and she can move it to another pension provider.
And there you have it, it’s not possible to give your pension to your wife, but you can contribute to her own pension, which might be a good alternative if you aren’t planning on retiring soon. Check out PensionBee – our recommended pension provider, it’s easy to open and has low fees.
If you are thinking about providing for your wife in retirement after you die, she’ll get your whole pension, without paying any inheritance tax, (as long as you name her as your beneficiary with your pension provider).
One more thing to mention if you are thinking about using your pension to buy an annuity (which is an income for life after retirement), you could consider a joint annuity which will still make payments to your wife if you die.
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