Almost two-thirds of savers are unaware that they can contribute to their partner's pension despite the benefits, according to Hargreaves Lansdown (HL).
Savers can add up to £2,880 per year into a self-invested personal pension (SIPP) of a non-working spouse, worth £3,600 due to government tax relief. People can also make payments to their working partners' pension, as long as total contributions do not exceed the personal allowance.
Helen Morrissey, head of retirement analysis at Hargreaves Lansdown, said it is a “powerful way” to boost the retirement planning of a loved one or to make the most of any spare cash.
However, just 34% of the 2,000 people surveyed by Hargreaves knew they could do this. Younger generations were slightly more conscious, with 43% of 18-34 year olds aware they can contribute to their partners' pensions, compared to 25% of those over 55.
It is not just limited to partners, Morrissey explained. Savers can also contribute £2,880 to their children’s junior SIPP per year, which the government will also provide tax relief on.
Making contributions of the full £3,600 per year could see them with a pension pot of £104,000 by the time they are 18. “This puts them well ahead of their peers who are yet to be auto-enrolled. Overall, this early planning could leave them in a much better position”, Morrissey said.