No pension at 35 - what should we do?

Pili-Pala_4

My OH has been working for a small firm for a while now (just 3 of them work there). We have been clearing some debts and saw this as the priority. We're now in a better situation (still in debt but we're coping with the level of it).

He has never had a pension. I keep saying he should start one but he prefers the idea of ISAs etc (all this talk about pensions performing badly). The thing is neither of us are that good with money (although getting better with clearing our CCs) and I think it would be far safer to have the money seriously tied up.

Really don't know where to start with pensions though (I'm in a LGPS so just signed on the dotted line)? He earns approx £17K. We live in south Cheshire. How much should he look at investing? Should we go to see an IFA?

EdInvestor

I have to say I agree with your hubby.A basic rate taxpayer with no company pension should save in an ISA, not a pension.

I think it would be far safer to have the money seriously tied up.

Then it's very appropriate that you're a member of a good pension scheme.

Pili-Pala_4

Thing is I've only had my pension for the last 3 years and I'm only on £16K pa. We can't rely on that in our retirement

exil

Not another ISAs v Pensions thread!

Can we please have a "sticky" thread where this issue can be debated?

Anyway - in the absence of anything else hubby will be getting credit towards a basic state pension plus serps/s2p. See the DWP to get a pension forecast.

If you consider this is enough to live on when you retire, and have no plans to retire early, no need to put any more into pensions.

If not, then you need to do something. I can't go through the tired old ISA v Pension arguments here, suffice it to say that as investments, there is no difference in the risks attached to them, that depends on what the pension or ISA is invested in, rather than the "wrapper" they are in. The debate is generally about the tax treatment of ISAs and Pensions, and the fact that money can be taken out of ISAs easily whilst there are limits on what you can take out of a pension. IMO you pays your money and takes your choice.

Alternatives - put the money into property, gold, antiques, whatever and sell when you retire. This requires you to take a view on how such assets will hold or increase value over the next 30 odd years.

Pili-Pala_4

Oh dear - sorry I'm new to this. I did have a read through a few of the posts but didn't really fit in with the info that I wanted. I guess what I really wanted to ask was how do I start a pension?

Who am I best chatting to?
Are there any web sites that you can recommend reading? Especially that give pretty basic info (explaining what's what) and how much he should invest to get a certain return when he's retired?
Anyone with any experience with IFAs in the South Cheshire region?

Thanks,
PP

Zipped50

Not another ISAs v Pensions thread!

Charming !

PP only asked a question , that start to an answer would put anyone off asking !

Get a grip , and get some manners.

EdInvestor

Hi PP

I assume your husband is contracted into SERPS and thus is on target to receive the two state pensions at retirement? To give you an idea, he would need a pension fund of around 170,000 pounds to get an amount equal to these two pensions, which you get by paying your compulsory NI contributions.

Wizwoo

How can you check if you've contracted out. What would happen to this £170,000 if you did try to save for his own pension?

EdInvestor

Check entitlement for state pensions here.. If there are missing years you can make them up back to six. Also if you are a SAHM you can make sure these years are on your record.

Ask at the office about contracting out.

Debt_Free_Chick

Pili-Pala wrote:

I keep saying he should start one but he prefers the idea of ISAs etc (all this talk about pensions performing badly).

He's mixing things up here. A pension is a tax wrapper. An ISA is a tax wrapper. In each case, the wrappers contain investment funds.

It's the investment funds that can perform badly - or well.

There are plenty of people on the ISA board with poorly performing investment funds.

And there are plenty of people (OK, maybe not posting here) with well performing investment funds, in a pension wrapper.

So ... if this is your husband's only objection to a pension, then he needs to think more about his planning for retirement.

One drawback of an ISA is the limited amount you can pay into it. Generally, most people can save much more via a pension.

But these are not the only considerations - more research needed. Have a look through some of the other posts on this board for more ideas.

HTH