Can I start a pension for my mother?

valor

Hi, I'm 25 and doing pretty well for myself. My mother (mid 50's) is separated from my Father, owns her own home, has a decent job and is not in any financial trouble or anything, but I still worry about her future as she has no pension and who knows what will happen with the state pension, etc..

I was wondering if it would be possible for me to start a pension for her, and pay into it regularly over the next ten years until she retires? I dont know a ton about this issue, so it may not even be possible. If it is possible, what would be the best product for me to choose? What would the tax implications be for us both ? Note, my income is not taxable (gambling), for whatever relevance that has

If anybody has any alternative ideas as a means of securing her financial future, I'd be very interested also

Thanks

Gunsfortoys

Are you self employed? Did your mother have a company pension in any company she worked for in the past?

These are few of the questions that you would need to answer, so the best thing to do is go to a broker that can advise of this. There are many things that can be checked before starting a pension.

MzFusspot

You're probably talking about fairly large contributions over the next 10 years depending on the size of the pension fund you're looking at having, would definitely second talking to a broker about this

Kennie1

You cannot take out a pension or pay into a pension for a third party such as your mother. In order to claim tax relief for a pension you need to have earned income. You said that she is in a good position financially at the moment, why dont you tell her that you are very concerned about her future and that you have reservations about the amount of state pension that may be available when she reaches retirement and that you would like her to look into taking out a pension.

gizmo555

The first thing that occurs is that the main reason for contributing to pension funds, as opposed to just saving money for retirement in the bank or some other investment, is the tax relief obtained.

Your own income is not subject to tax, so you can't benefit from the tax relief. (Well done by the way! Do you offer professional gambling lessons? I could be interested . . .)

Depending on your mother's sources of income and the resulting tax liability, she may be able to use pension contributions to get tax relief. If not, or if she is only paying tax at the standard rate, you would have to seriously question whether it is worth accepting the restrictions that go with pension fund contributions (no access to funds until retirement, restrictions on how it can be used on retirement, etc.)

Make sure you also get advice on the tax liability that may arise to your mother on gifts from you to her.

valor

If one of the main reasons for contributing to pensions is to get tax relief, then it certainly doesn't make much sense for me to do so.

I guess alternatives include just setting up a savings account and paying into it regularly in her name?

What brokers/companies should I Take to about this ? (although with the tax thing, maybe the pension thing is a total no go-er)

Thanks

bailes

Valor,

'There are many ways to skin a cat'

all above board I might add.

If you want to provide for your mothers future in a tax efficient manner it can be done, however there are limits on the amounts (€10k) per annum.

Regular payments into a savings account would be considered a gift, be careful with this.

If you want to discuss further p.m. me