Spouses Pension

Published / Last Updated on 21/02/2014

Increase Your Income With Spouses Pensions 

If you do not already you should consider employing your spouse and possibly offering a spouses pension.

For example - Roger Smith, runs his own business and pays himself £60,000 pa, his wife works for him but with no formal pay structure in place. 

His net take home pay is £41,611 (allowing for personal allowance and National Insurance contributions).

If Roger were to put a formal pay structure in for his spouse and pay her £5,044 pa (just below the National Insurance threshold) and paid £2,000 p.a.  into an executive pension arrangement for her the following would result:

  • £60,000.00  Self Employed Income  (Figures are based on tax year 2006/07)
  • £ 5,044.00  Less Spouses Income     
  • £54,956.00
  • £ 2,000.00   Less pension contribution    
  • £52,956.00 
  • £12,914.40  Tax (after allowances)     
  • £40,041.60 
  • £ 2,583.76   Less National Insurance
  • £37,457.84  Net Income for Roger  
  • £ 5,044.00  Plus Spouses Income  
  • £42,501.84  Total Joint Income   

The total increase in income is £890.84 plus the Pension Fund £2,000.00.  An improvement of nearly £3,000!

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