Thinking about starting a pension at 35

mrbrown

Im 35 and have come round to the thought of starting a pension. Ive always avoided pensions because of all the scare stories you hear, and my mother is due to retire this year and has seen her pension slashed dramatically due to current climate.
The company I work for has no pension scheme, Im a basic rate taxpayer, I have a few cash savings and have paid into (although stopped my monthly contributions a few months ago) an Invesco Perpertual High Income fund.
I have mixed thoughts on assigning a portion of my salary to a pension. Obviously the market is in turmoil, but its not the first time and certainly wont be the last. Shares are down so would be a good idea to start buying some (I still have some ISA s&s allowance left for this tax year) - so maybe now is a good time to start a pension. What should I look for in a pension scheme? What is the average ratio of income people put into a pension? Has anyone here paid into a pension all their lives only to lose it or see it reduce massively just before retirement?
As you can see, my mind is all over the place. Ild like a few comments please.

dunstonh

Im 35 and have come round to the thought of starting a pension.

Better late than never.

Ive always avoided pensions because of all the scare stories you hear

There are no scare stories relating to the type of pensions that you would be looking at.

and my mother is due to retire this year and has seen her pension slashed dramatically due to current climate.

Which was totally avoidable. However, she would have only fallen back about 18-24 months in value so when you consider that most pension planning is 30 or 40 years, it really isnt that much.

Obviously the market is in turmoil, but its not the first time and certainly wont be the last.

Knowing that is a positive.

What should I look for in a pension scheme?

It has the investments you want, the features you want and is cost effective.

What is the average ratio of income people put into a pension?

It doesnt matter what other people do. They may have started at 18, 25 or whatever. They may want £20k a year in retirement or £30k or 10k. What matters is what you want.

You also have to remember that you have a lot of catching up to do. A rough yardstick is is that for an average pension you should be looking to have around £35k in your pension fund by age 35. You have nil.

Has anyone here paid into a pension all their lives only to lose it or see it reduce massively just before retirement?

There is no reason for that to happen unless you are a lazy investor and forget to reduce the risk before retirement and dont have automatic risk reduction on the pension. If you think you are a lazy investor then make sure you have automatic risk reduction.

purch

lose it or see it reduce massively just before retirement?

That will/can only happen if you allow it to happen.

The main purpose and benefit of this site and forum is to encourage and enpower people to take control.

Invested wisely, and will full understanding and control you can have good pension provision.

mrbrown

Thanks for your straight answers. Thats made my mind up - Im going to start a pension.

dasherman

mrbrown wrote: »

The company I work for has no pension scheme

Are you sure about this?

http://www.pensionsadvisoryservice.org.uk/personal_and_stakeholder_pensions/employer_access/

jamesd

mrbrown wrote: »

my mother is due to retire this year and has seen her pension slashed dramatically due to current climate.

If your mother hasn't commenced taking her pension yet please say more about her situation. With money purchase pensions it's not necessary to lock in to current low market values for life by buying an annuity now even if there is a desire to start taking pension income now.

Income drawdown - an unsecured pension - is an alternative to buying an annuity.

Is she going to get a full basic state pension? If not, has she investigated making payments for past years?

dunstonh

dasherman wrote: »

Are you sure about this?

http://www.pensionsadvisoryservice.org.uk/personal_and_stakeholder_pensions/employer_access/

The recent pensions changes have ended it (although I need to check if its applies now and from 2012). However, it hasnt been enforced for some time because most schemes just exist on paper. The employer is obliged to offer one but doesnt have to pay into it at the moment. If you want the employer to set it up for you and have it paid from your payslip they will do it but they dont have to pay into it. That is what is meant by not having a works pension.

MikeJones_2

Hi dunstonh,

dunstonh wrote: »

The recent pensions changes have ended it (although I need to check if its applies now and from 2012).

The Stakeholder requirements currently remain active on the Statute Books, but as you say, highly unlikely that they would be enforced.

Mike

I work in the field of Pension Education and Pension Guidance in the UK. I am a member of the Specialist Pensions Forum as well as being a Voluntary Adviser for The Pensions Advisory Service. I work with scheme members, employers, trustees, scheme administrators and advisers on most things to do with employer sponsored pension schemes. The views expressed by me in this thread are my personal opinions. You should seek professional advice from an appropriately experienced and qualified adviser. I am not an IFA.

dunstonh

That saves me some reading. Thank you.