Pension worries 41 yr old

Jane_Thomas · 19 April 2017 at 5:42PM

Hi, Could you point me in the right direction.

I am 41 years old and retired on the grounds of ill heath a few years ago so I am receiving my work pension of £7000p.a.

I still have most of my money from my pension payout £30,000 where should I invest it, ISAS?

I am also worried as this means I will not get a work pension only the State pension when I am normal retirement age. Should I be opening a private pension and put in a small monthly amount so I have more income at retirement age. Or should I just keep saving in a savings account.

Any advice thoughts would be good to hear.

thanks
Jane

Number75 · 19 April 2017 at 6:31PM

As you are already receiving your work pension, all the rules should be clear on how long it will be paid to you for.

If you're in a well known work pension scheme, someone here might be familiar with it. But for something so important to get right, there's no substitute for speaking to the work pension administrator directly and having in confirmed in writing whether this £7Kpa is paid for life.

Number75 · 19 April 2017 at 6:32PM

I'm sorry, I misread your post - missing a single word "as" gave your sentence an entirely different meaning!
I read it that you didn't know if it would continue paying! Sorry for that, please ignore my post, and help someone else can give you useful advice.,

xylophone · 19 April 2017 at 6:51PM

Your ill health pension is presumably index linked and payable for life?

You are receiving credits towards a state pension?

You have no earned income?

You have an emergency fund? Consider using interest paying currents account(s) for this.

You could consider paying £2880 per annum into a personal pension scheme - there would be tax relief of £720 added.

Jane_Thomas · 19 April 2017 at 8:28PM

My pension is a Council one, it is Index linked, and I am 99% sure it is for life but I will double check this.
I am receiving ESA benefit so they pay a small contribution to my state pension.
I have no other income.
I have been so ill and was very ill at the time of being pensioned off i'm only just getting round to thinking about sorting this out.
I have a Current Account which pays ok interest on the first £5K and has a linked savings account.
I have a small emergency fund
How would I go about paying £2880 into a Personal Pension Scheme?
thanks

BobQ · 19 April 2017 at 9:06PM

Jane as you are unable to work you get contribution credits for your state pension from now until you reach retirement age.

https://www.gov.uk/new-state-pension/your-national-insurance-record-and-your-state-pension

You can check if this is happening - can do this on line

https://www.gov.uk/check-national-insurance-record

The Council Pension is part of the Local Government Pension Scheme? If so you will get a pension for life if they are already paying you a pension for ill health retirement. This will be increased for prices in the future. If the Council Pension is not LGPS (eg you were not directly employed by the Council) then that will depend on the Pension Scheme.

kidmugsy · 19 April 2017 at 9:13PM

Jane_Thomas wrote: »

How would I go about paying £2880 into a Personal Pension Scheme?
thanks

In your shoes I probably wouldn't do it. Not yet.

At the moment it looks as if once you're passed the State Pension Age you'll get both your LPGS pension and your State Retirement Pension, which should leave you OK for income. (You are going to check this.)

At 41 any money you put into a personal pension will be inaccessible to you until you are 55. Are you sure you want to do that? As you approach 55, however, the inaccessibility problem diminishes and then vanishes, so then it might be wise to contribute to a personal pension.

xylophone · 19 April 2017 at 9:54PM

http://www.telegraph.co.uk/investing/funds/the-cheapest-index-tracker-funds---and-the-trick-to-cutting-cost/

http://www.hl.co.uk/partners/search/sipp?theSource=PCHLS&Override=0&adg=G+HLBS+HLS&gclid=CNWku9azsdMCFRG6Gwod0WQIWQ

may be worth a look.

ThinkingOutLoud_2 · 19 April 2017 at 10:16PM

I agree with Kidmugsy - unless you will have other sources of income now, you are best not locking away your 30k in a sipp or pension and thus until you are 55.

That sum is a more than decent emergency fund, given you are surviving on way less.

So the suggestion of spreading it around to get the best overall return via several higher paying interest accounts makes sense (many such accounts have limits on which the higher rate is paid way below 30k). The money will be accessible, if you need it and working as hard as it can, if you don't.

Pension worries 41 yr old

Comments

Categories

Get our FREE Weekly email full of deals & guides - and it’s spam-free