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The ‘hidden hero’ that could boost pensions by £67,000 | Trustnet Skip to the content

The ‘hidden hero’ that could boost pensions by £67,000

29 July 2024

Partner pension contributions could boost retirement savings dramatically, according to Hargreaves Lansdown.

By Patrick Sanders,

Reporter, Trustnet

Couples are sacrificing a potential £67,000 by failing to take advantage of partner pension contributions, Hargreaves Lansdown found.

Partner pension contributions allow a working partner to contribute up to £2,880 per year to the pension of a non-working spouse, which would then rise to £3,600 through tax relief.

To test this, Hargreaves Lansdown modelled two scenarios in which a person earning £28,000 a year contributed to a pension until the age of 68, but in one scenario they took a five-year employment gap which was covered by a partner.

Hargreaves Lansdown found that the person receiving pension top-ups from their spouse ended up with a final pot of roughly £398,000 by age 68.

By contrast, in the scenario where their partner did not contribute, the final pension total fell to £331,00, a decline of more than £67,000.

Helen Morrissey, head of retirement analysis at Hargreaves Lansdown, said: “Partner pension contributions are a real hidden hero that can give your pension a massive boost.

“Having someone contribute to your pension or SIPP during times you aren’t working can plug gaps in your pension that would overwise become a yawning chasm.”

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