35 no pension.

pKaTz

Hi, I'm 35, and working in a job with no pension scheme.

Ive asked before about stakeholders on here, but since then my circumstances have changed.

I am married with a 2yo. and earn about 12600 per year gross. My wife (31) earns about the same and has no pension either (she came to the UK in 2007)

What would be the most prudent way to start a pension for both me and my wife.

Can a pension be joint? or only in single names.

Someone here suggested that PMs (gold silver) could be held in a pension, how would that work. Does it mean that you have to pay a premium for your PM.

Yes i know its late to start a pension, but is working in a low paying job a good excuse?

I have tried to max out our cash ISAs each year, and am going thru the Pension vs ISA thread - but it is quite long.

Thanks for any answers.

dunstonh

Can a pension be joint? or only in single names.

Pensions go under you NI number so they are an individual thing. However, your planning should be joint.

Someone here suggested that PMs (gold silver) could be held in a pension, how would that work. Does it mean that you have to pay a premium for your PM.

Before you get into speculative, niche or unusual investments, its probably a good idea to get the conventional side of things right first.

Yes i know its late to start a pension, but is working in a low paying job a good excuse?

Its an excuse but not necessarily a good one. There is always an excuse not to pay if you want to find one. A 20 year old could pay £30pm into a pension and keep it up with inflation and still end up with a decent amount. Delaying it just increases the cost when you do eventually start.

The easy way to decide if you need a pension is to decide if you want to live on the basic state pension of £5000 a year or not.

pKaTz

dunstonh wrote: »

Pensions go under you NI number so they are an individual thing. However, your planning should be joint.


Before you get into speculative, niche or unusual investments, its probably a good idea to get the conventional side of things right first.


Its an excuse but not necessarily a good one. There is always an excuse not to pay if you want to find one. A 20 year old could pay £30pm into a pension and keep it up with inflation and still end up with a decent amount. Delaying it just increases the cost when you do eventually start.

The easy way to decide if you need a pension is to decide if you want to live on the basic state pension of £5000 a year or not.

Thanks.
You seem to be the prevailing provider of Sensible and to-the-point advice on here.

Nope. I dont think £5000 would be sufficient.
So does that mean walking in to a bank for "a chat". are there any that I should avoid?
I bank with lloyds, halifax, A&L. does loyalty as a saver count towards anything.

dunstonh

So does that mean walking in to a bank for "a chat". are there any that I should avoid?

you should avoid all the banks and supermarket products. (bank products are basic and limited. Supermarket ones are often cut down versions of the insurance company version they are linked to).

I bank with lloyds, halifax, A&L. does loyalty as a saver count towards anything.

None whatsoever. You would just be another mug punter for them to sell to.

See a local IFA.

Gatser

well done!
At least you are trying to do something about your pension at 35... some folks go through their entire life in "Pensions denial"

Talk to a couple of IFA's (or more!) and get their differing opinions..then make you mind up which one you have greatest confidence in...it has to be a trust thing.
I have found most IFA's will happily have a free initial chat... "Try before you buy" ... they appreciate its a difficult decision you need to make.

Totally agree that its good to get into a pensions saving habit, whatever you can afford...then increase over time.

One mistake I have experienced many times is the inflated expectations of individuals who just save into a pension and expect a "reasonable" amount out at retirement, with no link to what has been paid in. I am sure that is not you but do project forward and make sure you are happy with your likely pension fund and how much income it will give you later.

bristol_pilot

Starting at 35 with an income of £12k, in my view you don't have a hope of saving enough for a decent pension. People who throw themselves on the mercy of the state do not get only the basic state pension to live on - they get lots of benefits such as pension credit, housing benefit, council tax benefit, free prescriptions etc. Many benefits are means tested and more are likely to become so in future years (perhaps even the basic state pension or state second pension will be means tested in future). Would it not be tragic to struggle to save out of your modest wage a small pension pot which buys you a miniscule pension in retirement which is deducted from your benefits almost pound-for-pound? If you could afford to save £10k per year for 30 years I would say go for it, but your circumstances will simply not allow.

dunstonh

I dont know if being defeatist at age 35 is right though. Its not too late and remember that whilst benefits do exist they can only take a couple up to around £9500 a year.

If you have the basic state pension of £5000 and Serps/S2P etc being around £2000 say, then it doesnt take much to take you through the benefits line anyway. The OP mentioned his wife is working so if she should be qualifying for the state pension as well. So, they could even without any other provision, that their state pensions stop them from qualifying for pension credits.

There is also a long term aim to reduce pension credits and increase the state pension so relying on a benefit that may not exist is risky.

The other thing is that your own provision doesnt hit the benefits £1:£1. If you are borderline to the limits small amounts can still benefit you.

property.advert

dunstonh wrote: »

..There is also a long term aim to reduce pension credits and increase the state pension so relying on a benefit that may not exist is risky....

Surely the end prognosis of that move would be to have a state pension which was high enough so that the recipient did not need additional state benefits ?

If so, then it would not be risky but beneficial as he would be swapping a low pension and merely potential benefit for a guaranteed higher pension. Is that not better ?

What is a moot point, though somewhat diluted by the need to now reach 55 before drawing a private pension, is the gap between the age at which someone may receive a private pension and the state pensionable age.

At a certain income level, there is perhaps a need for a pension product only to service that 13 or so year gap until the state pension kicks in. With 30 years as a qualifying period, it would be easy to have full contributions well before you are 55 years old and if you wanted to retire on a sum akin to the state pension, then you could do so at 55 if your pension was sufficient only to provide for a 13 year annuity.

Food for thought ?

laurel7172

Remember that pension credits were a gift from Labour. I know I started my pension planning assuming a return to Tory values. Which of them was it who suggested pensioners freezing to death should wear a cardigan?

It's a personal choice, but at least what I save is mine and a sight more certain than charity from the ConDems. I suspect a lot of people who think they're going to be able to rely on pension credits are in for a nasty shock.

dunstonh

Surely the end prognosis of that move would be to have a state pension which was high enough so that the recipient did not need additional state benefits ?

Correct.

If so, then it would not be risky but beneficial as he would be swapping a low pension and merely potential benefit for a guaranteed higher pension. Is that not better ?

Exactly. You would be getting pension plus your own planning. You wouldnt have this daft system in place now where there is a small window where you are better off relying on the state if you are already close to the breadline.

pKaTz

bristol_pilot wrote: »

Starting at 35 with an income of £12k, in my view you don't have a hope of saving enough for a decent pension. People who throw themselves on the mercy of the state do not get only the basic state pension to live on - they get lots of benefits such as pension credit, housing benefit, council tax benefit, free prescriptions etc. Many benefits are means tested and more are likely to become so in future years (perhaps even the basic state pension or state second pension will be means tested in future). Would it not be tragic to struggle to save out of your modest wage a small pension pot which buys you a miniscule pension in retirement which is deducted from your benefits almost pound-for-pound? If you could afford to save £10k per year for 30 years I would say go for it, but your circumstances will simply not allow.

so are you saying that I should not even try and save for a pension as my income is low. maybe try and save in isa's