Buying pension at 53

savetilibleed

I was in a company pension scheme for 12 years until 1994 due to redundancy. I was 39 then. I was in SERPS before that. Later in 1994 I got a temp job that became permanent after 2 years. But being only just out of cancer treatment in 1993 the future was uncertain as was the firm! So I didn't jon their pension scheme. I was redundant from there in 2000. I was not in another scheme after that. I worked elsewhere until 2002 when I was off ill again for a long time with something else. I'm still at the tail end of that.

I wondered sometimes if it was possible or wise, (or not) to, rather than take income from my savings as I have to now, to divert into buying a pension. Thing is the forecast I got last year the pension was small and I wont be able to add to it any more as I have contributed more than the required 30 years plus the credits from being on IB. If I retain savings I won't be able to get any pension credits if the pension fails to meet the minimum to live on.

Not sure what to do. My inclination is not to waste savings in a scheme that will consume some of it in admin fees, even if the scheme is good (assuming that is possible and legal)

Any advise out there?

dunstonh

from an income point of view, the pensions are very efficient. They will beat all other conventional options (even if you become a taxpayer in retirement). However, you are effectively kissing goodbye to the capital you put into a pension. You have to weigh up the the loss of capital against the income provided.

My inclination is not to waste savings in a scheme that will consume some of it in admin fees, even if the scheme is good

Nothing is free. Money in your bank is charged. You just dont see it as they reduce the interest rate. Investments have explicit charges which you do see.

EdInvestor

Suggest you collect together forecasts of all the pension income you are likely to get.It sounds as though you will be well above the pension credit level (about 6500 p.a) with a full state pension plus SERPS and 10 years of company pension index linked to retirement.

If so it might well be worth contributing to a pension up to the 10k tax free level.

savetilibleed

Just reviving a thread of mine from last year.

My state pension will only be £104.78/week including Additional State Pension and Graduated Retirement Pension, according to a state pension forecast from Feb09. I'm not sure what the other pension will pay, but it won't be much. I remember getting a statement when I was made redundant in 1994 and was shocked at how little it was even then. It was subsequently transferred to an annuity when the scheme was wound up to start paying out at 65. A discharge notice I have dated 2002 says there was £32,941 to buy scheme benefits (presumably this annuity) and that members pension at 65 would be £2112 p.a. at money of 2002. I ought to get a forecast really from Standard Life.

At present I can't afford to pay anything into a pension scheme, other than divert savings in, which I also can't afford. To divert virtually all of my savings in seems like suicide. I guess questions would be asked about where did all the money go in any case if I were to do that (not suggesting I would, you understand :eek:)