starting a pension at 43

Airlock1

Hi , i need some advise.

i have been out of work for many years
i am 43 yrs old..i do not have a pension or savings but i have recently started working for a very large company who offer a pension plan.

I am starting on a salary of 40k a year. i think I can afford to pay £150 a month into the plan and the company also contribute. im told its a very good plan and i should consider it.

i know im starting really late, but i am too late?

or should i also try and start contributing to an ISA as well ?

Im not sure what kind of annual income the above company pension would give me.

Any advise? im really not very good with this sort of thing but decided not to bury my head in the sand anymore.

patrick

Lokolo

Airlock1 wrote: »

Hi , i need some advise.

i have been out of work for many years
i am 43 yrs old..i do not have a pension or savings but i have recently started working for a very large company who offer a pension plan.

I am starting on a salary of 40k a year. i think I can afford to pay £150 a month into the plan and the company also contribute. im told its a very good plan and i should consider it.

i know im starting really late, but i am too late?

or should i also try and start contributing to an ISA as well ?

Im not sure what kind of annual income the above company pension would give me.

Any advise? im really not very good with this sort of thing but decided not to bury my head in the sand anymore.

patrick

You can, and you should put a lot more into the pension.

http://www.h-l.co.uk/pensions/interactive-calculators/pension-calculator

Put a bit of info in there.

Aegis

Starting at 43 is very late for a first pension policy. £150 a month on a salary of £40k is far too little if you plan to have anything more than a negligible income from your pension savings when you come to retire. Generally speaking, the rule of thumb is to ensure that a gross contribution of half the age you start your pension at as a percentage is the rule of thumb. In your case, that means that you should be aiming for around 21.5% of your salary going into pension planning. It sounds high, but you have 20 years of contributions and growth to catch up on.

If your employer matches some contributions, then make sure you take account of that, but you should be aiming for an awful lot more than just £150 a month. If in doubt, speak to an IFA about your pension strategy, as you really should address this as soon as possible. while you still have an opportunity to make a difference to your retirement.

dunstonh

£150 at age 43 with no previous pensions is way too low. Especially on a salary of £40k. You should be looking at double that. Possibly more (depending on employer contribution).

At this stage it doesnt matter whether its ISA or pension. Thats fine tuning that comes when you know what you are doing and how much you want. The important thing is decide how much you want in retirement and how much its going to cost you and then what is the best way to achieve that.

You have left it late but not too late as long as you are realistic.

jamesd

It's definitely not too late or anything close to it. You're used to being unemployed and you should exploit that advantage by not increasing your spending rapidly. Instead concentrate on using your full S&S ISA allowance each year if you can, and enough pension investing to get the maximum matching that your employer will offer.

Set yourself clear targets. Mine has been to get my savings and investments to the point where even if I didn't work again I'd be able to live as I do now, on a quite modest spending level, for the rest of my life.