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  • FIRST POST
    • Gemsy81
    • By Gemsy81 5th Jan 18, 12:56 PM
    • 9Posts
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    Gemsy81
    Help for 51 year old
    • #1
    • 5th Jan 18, 12:56 PM
    Help for 51 year old 5th Jan 18 at 12:56 PM
    My partner has always lived carefree and happy go lucky, not seeming to think he would ever grow old....he now finds himself pension-less at 51.

    We have a family now and would like some security for us all, and a plan of sorts for old age!

    Is it worth him starting a pension now, or is he destined to work until he drops?
Page 1
    • MallyGirl
    • By MallyGirl 5th Jan 18, 2:59 PM
    • 2,295 Posts
    • 7,309 Thanks
    MallyGirl
    • #2
    • 5th Jan 18, 2:59 PM
    • #2
    • 5th Jan 18, 2:59 PM
    it is worth it. He has 15/16 years till State Pension Age which is enough time to use investments. Does he work for a company? If so they should set him up in a pension. If not then he can start a personal pension or SIPP. All money into a pension gets tax releief, plus a company one would gain some employer contribution too.
    The State Pension will only be about £8k so unless that is enough to live on he should be starting a pension now.
    • dunstonh
    • By dunstonh 5th Jan 18, 4:32 PM
    • 90,373 Posts
    • 57,155 Thanks
    dunstonh
    • #3
    • 5th Jan 18, 4:32 PM
    • #3
    • 5th Jan 18, 4:32 PM
    Is it worth him starting a pension now, or is he destined to work until he drops?
    Depends on whether you and he takes retirement planning seriously or just starts a pension with a token amount to tick a box to say "pension done" (which unfortunately too many do nowadays)

    Compare what he earns now to the £8000 a year state pension. Some people dont need much above that. Others need a lot more.
    I am an Independent Financial Adviser (IFA). Comments are for discussion purposes only. They are not financial advice. Different people have different needs and what is right for one person may not be for another. If you feel an area discussed may be relevant to you, then please seek advice from an Independent Financial Adviser local to you.
    • xylophone
    • By xylophone 5th Jan 18, 6:09 PM
    • 24,024 Posts
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    xylophone
    • #4
    • 5th Jan 18, 6:09 PM
    • #4
    • 5th Jan 18, 6:09 PM
    Have you both obtained a state pension statement?

    https://www.gov.uk/check-state-pension

    Is there no workplace pension for either of you?

    Otherwise there might be something here

    https://www.cavendishonline.co.uk/pensions/stakeholder-and-personal-pensions/

    https://www.pensionsadvisoryservice.org.uk/about-pensions/saving-into-a-pension/pensions-and-tax/tax-relief-and-contributions
    • Daytona
    • By Daytona 6th Jan 18, 10:27 AM
    • 42 Posts
    • 5 Thanks
    Daytona
    • #5
    • 6th Jan 18, 10:27 AM
    • #5
    • 6th Jan 18, 10:27 AM
    The timespan is so short that whether to take out any additional (ie non state) pension may depend upon the interaction with any means tested social security benefits received. There's no point saving if the end effect is to reduce benefit payouts leaving him in the same position.

    What income does he/you all require ?

    Sorry Gemsy, more links, but they may help you to understand the situation and enable you to answer questions on here -
    http://www.stoozing.com/calculator/soa.php
    https://benefits-calculator.turn2us.org.uk/AboutYou
    • Mutton Geoff
    • By Mutton Geoff 6th Jan 18, 11:04 AM
    • 1,030 Posts
    • 1,106 Thanks
    Mutton Geoff
    • #6
    • 6th Jan 18, 11:04 AM
    • #6
    • 6th Jan 18, 11:04 AM
    Depends on whether you and he takes retirement planning seriously or just starts a pension with a token amount to tick a box to say "pension done" (which unfortunately too many do nowadays)
    Originally posted by dunstonh

    Too true. I was 38 and realised I hadn't done very much pension saving. Some friends helped switch on the "lightbulb". I was fortunate to join a company with a DB scheme but I still opted for max accrual rate (costing me 13% of my salary). I also topped this up by paying into AVCs a toal of 30% then later 50% of my salary. At first it was painful, I had lodgers to help with my mortgage, I started a small business that provided extra income but after a while, I just got used to my level of income and lived within it.


    22 years later, I am 60 and can see the benefit of that so I would say the OP still has a chance but it is going to take a serious onward commitment to achieve anything decent.


    Fag packet sums. If a decent pension is say, £2k a month (£24k a year), the state should provide £8k of that, so you need £16k additional. If you believe in 4% drawdown, then you'll need a pot of £400k at retirement.


    You need to save around £1,200 a month to achieve that. If you are a high rate tax payer, the good news is that will cost you "only" £700 a month in lost income. Can you afford that?


    There are plenty of spreadsheets online to help you work out your needs now and in retirement. The SOA forms here help too. Do two, one for now and one for how you think life will be in retirement to gain an idea of your needs.


    I have many friends from middle management type jobs, now retired and they all seem to say around £2k a month is needed for a comfortable retirement, holidays abroad, replacement (not new) car every few years.



    If your income is lower, then you just have to do what you can, but as dunstonh says, you have to take it seriously.
    Compensations/Refunds from Banks & Institutions - £4,165 | Stooz Profits - £7,636 | Quidco - £4,014

    All with a big thank you to Martin and MSE.com from Mutton Geoff!
    • WobblyDog
    • By WobblyDog 6th Jan 18, 11:19 AM
    • 449 Posts
    • 288 Thanks
    WobblyDog
    • #7
    • 6th Jan 18, 11:19 AM
    • #7
    • 6th Jan 18, 11:19 AM
    It could well be worth starting now. The tax (and sometimes National Insurance) savings can be considerable.

    For someone in their early fifties, money put into a pension can be often be partially accessed from 55 onwards, so it's not as if the money is being locked away for a long time.
    • enthusiasticsaver
    • By enthusiasticsaver 6th Jan 18, 11:37 AM
    • 5,162 Posts
    • 9,809 Thanks
    enthusiasticsaver
    • #8
    • 6th Jan 18, 11:37 AM
    • #8
    • 6th Jan 18, 11:37 AM
    Yes it is worth starting a pension but he will need to put a relatively high percentage of his salary in to accrue any benefits. Does his employer not offer a pension?
    Debt free and mortgage free and early retiree. Living the dream

    I'm a Board Guide on the Debt-Free Wannabe, Mortgages, Banking and Budgeting boards. I volunteer to help get your forum questions answered and keep the forum running smoothly. Any views are mine and not the official line of moneysavingexpert.com. Pease remember, board guides don't read every post. If you spot an illegal or inappropriate post then please report it to forumteam@moneysavingexpert.com
    • Gemsy81
    • By Gemsy81 6th Jan 18, 3:19 PM
    • 9 Posts
    • 20 Thanks
    Gemsy81
    • #9
    • 6th Jan 18, 3:19 PM
    • #9
    • 6th Jan 18, 3:19 PM
    Thanks for all the replies. We are both self employed, so no employer pensions (although all our employees get them! )

    I am 36, and have already started one, so I'm happy I'm at least partially on track!
    • greenglide
    • By greenglide 6th Jan 18, 3:30 PM
    • 2,970 Posts
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    greenglide
    We are both self employed, so no employer pensions (although all our employees get them! )
    You claim to be "self employed" yet you have employees?

    Do you actually have you own limited company? If so you are not self employed, you are employees of that company. If so the best way of contributing to a pension is by the company making employers contributions, you would not, normally make contributions yourselves.
    • kidmugsy
    • By kidmugsy 6th Jan 18, 3:41 PM
    • 9,981 Posts
    • 6,736 Thanks
    kidmugsy
    Do you actually have you own limited company? If so you are not self employed, you are employees of that company.
    Originally posted by greenglide
    More likely they are directors rather than employees, I'd guess.

    If so the best way of contributing to a pension is by the company making employers contributions, you would not, normally make contributions yourselves.
    Originally posted by greenglide
    I agree, company contributions would be the way to do it because of the tax avoided.
    Free the dunston one next time too.
    • Gemsy81
    • By Gemsy81 6th Jan 18, 3:49 PM
    • 9 Posts
    • 20 Thanks
    Gemsy81
    No, we have a partnership, not a limited company - so no, we are not employees.
    • atush
    • By atush 7th Jan 18, 11:19 AM
    • 16,456 Posts
    • 10,200 Thanks
    atush
    Do you use an accountant? It could well be worth you becoming an LLC
    • andy001
    • By andy001 7th Jan 18, 11:30 AM
    • 15 Posts
    • 3 Thanks
    andy001
    No, we have a partnership, not a limited company - so no, we are not employees.
    Originally posted by Gemsy81
    I wonder if you could pay money towards pension from your partnership (for employees-that you both!). ??
    • skycatcher
    • By skycatcher 7th Jan 18, 11:56 PM
    • 6 Posts
    • 0 Thanks
    skycatcher
    Too true. I was 38 and realised I hadn't done very much pension saving. Some friends helped switch on the "lightbulb". I was fortunate to join a company with a DB scheme but I still opted for max accrual rate (costing me 13% of my salary). I also topped this up by paying into AVCs a toal of 30% then later 50% of my salary. At first it was painful, I had lodgers to help with my mortgage, I started a small business that provided extra income but after a while, I just got used to my level of income and lived within it.


    22 years later, I am 60 and can see the benefit of that so I would say the OP still has a chance but it is going to take a serious onward commitment to achieve anything decent.


    Fag packet sums. If a decent pension is say, £2k a month (£24k a year), the state should provide £8k of that, so you need £16k additional. If you believe in 4% drawdown, then you'll need a pot of £400k at retirement.


    You need to save around £1,200 a month to achieve that. If you are a high rate tax payer, the good news is that will cost you "only" £700 a month in lost income. Can you afford that?


    There are plenty of spreadsheets online to help you work out your needs now and in retirement. The SOA forms here help too. Do two, one for now and one for how you think life will be in retirement to gain an idea of your needs.


    I have many friends from middle management type jobs, now retired and they all seem to say around £2k a month is needed for a comfortable retirement, holidays abroad, replacement (not new) car every few years.



    If your income is lower, then you just have to do what you can, but as dunstonh says, you have to take it seriously.
    Originally posted by Mutton Geoff

    Mutton... Very interesting... In particular the feedback about your retired middle management friends saying £2k a month is fine. Is this "take home" amount and is that for a couple? This is the sort of figure I am working toward! Thanks for any insight you can give
    • Esox
    • By Esox 8th Jan 18, 6:51 AM
    • 17 Posts
    • 16 Thanks
    Esox
    Mutton... Very interesting... In particular the feedback about your retired middle management friends saying £2k a month is fine. Is this "take home" amount and is that for a couple? This is the sort of figure I am working toward! Thanks for any insight you can give
    Originally posted by skycatcher
    ...even as a net figure, sounds a bit tight to support a couple for the described lifestyle and would presumably have to be mortgage and dependant free?
    • crv1963
    • By crv1963 8th Jan 18, 7:06 AM
    • 192 Posts
    • 504 Thanks
    crv1963
    ...even as a net figure, sounds a bit tight to support a couple for the described lifestyle and would presumably have to be mortgage and dependant free?
    Originally posted by Esox


    This is the figure we are aiming for, mortgage free and dependent free hopefully. We worked out our living cost- over estimated the bills, allowed ourselves to have 12 months outgoings as a reserve for either major repairs or a market crash that means stopping drawdown for a year. We may try to build it to 18 months reserve in case both happen at once!


    With reduced costs of not working, not having to commute, buy lunches/ coffee/ inevitable "collections"/ ongoing professional fees etc, we reckon 2k pm is a reasonable aim for a comfortable but not extravagant retirement.
    CRV1963- Light bulb moment Sept 15- Planning the great escape- aka retirement!
    • skycatcher
    • By skycatcher 8th Jan 18, 12:41 PM
    • 6 Posts
    • 0 Thanks
    skycatcher
    ...even as a net figure, sounds a bit tight to support a couple for the described lifestyle and would presumably have to be mortgage and dependant free?
    Originally posted by Esox
    Mortgage and debt free and kids off the books but as a couple and will have £250k cash/investments on a final salary ps. Hope it will not but be too tight... But would like reassuring before taking the plunge
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