Is it worth starting a pension at 45??

andylane_2

Hi i need help here because ive never understood the pension schemes and i`m worried that a state pension wont meet our needs.
I`m married with 4 kids ive had one pension and that was with corus which i started only in July this year. I have now another job (much better wages) but it comes with no pension. Is it worth me starting a pension at 45 or not and if not what other alternative means are there so that our retirement is financially ok? My wife is a staff nurse and has been paying the minimum into a NHS super annuation pension scheme close to twenty years now. Are there first time pensions for people like me who at 45 is just starting out on a pension or not ... as you can see i`m not that savvy on pensions and basic help would be appreciated.

Ginger_Red

In a word, yes.

If you're really unsure, work out what the basic state pension will give you per month, take away council tax, gas, electricity, and any other regular outgoings such as Sky, telephone, broadband.

Then work out what you spend annually on running a car and maintaining your home.

Finally take off what you spend on food and holidays.

If what's left looks appealing, don't worry. If it looks scary, start a pension. As to what pension, or how much to contribute, others on here are more knowledgable than me, or consult an IFA.

Mols

Definitely not too late.

I recently started my first pension at 36! I found a local IFA, had three meetings with them and they are now looking after my pension.

ISA's are also good to run alongside your pension contributions as they are tax efficient but the money is not locked in until retirement so you would have access to the money if you really needed it.

At 45 you should have at least 20 years of income from work and in that time build up a some money for your retirement.

bristol_pilot

Not too late if you can afford to pay £30,000 or so per year into it before tax relief. Otherwise, I'd say it is too late. The last thing you need is a small pension which will prevent you getting the state benefits you would otherwise be entitled to in retirement. A compromise is to save it in an ISA which would enable you to live a little in the early phase of retirement when you still have your health.

DiggerUK

andylane, your wife is in a final salary scheme, one of the best going. These are the traditional pensions that give pensions a "you must have a pension" response when asking the question you do.
All other pension schemes are a high risk way to put by for retirement and best avoided.

You should follow bristol pilot's advice and simply put by for your retirement pot in such things as ISA's or Index Linked Savings Certificates from NS&I when they become available again.
I'm a fan of gold and suggest you check out if it appeals to you, long term for retirement funds it is ideal.

As your wife is in an excellent pension scheme, she should check out if she can up her contributions, though I am puzzled when you say she only pays the minimum. It is normally a standard payment. Did she start when women could pay a different rate, that needs sorting immediately.

Best of fortune to you both.

Old_Slaphead

bristol_pilot wrote: »

Not too late if you can afford to pay £30,000 or so per year into it before tax relief. Otherwise, I'd say it is too late. The last thing you need is a small pension which will prevent you getting the state benefits you would otherwise be entitled to in retirement. A compromise is to save it in an ISA which would enable you to live a little in the early phase of retirement when you still have your health.

Do you know this to be a fact or is it merely supposition?

Given the advent of "NEST" pensions from 2012 a future government may factor notional income from this into claimants income before assessing additional state benefit entitlements - who knows ????

bristol_pilot

A fact, based on current legislation. Pension credit, housing benefit, council tax benefit...all means-tested. Future legislation? Who knows, but one thing pensions are not is flexible.

mjm3346

bristol_pilot wrote: »

Not too late if you can afford to pay £30,000 or so per year into it before tax relief. Otherwise, I'd say it is too late. The last thing you need is a small pension which will prevent you getting the state benefits you would otherwise be entitled to in retirement. A compromise is to save it in an ISA which would enable you to live a little in the early phase of retirement when you still have your health.

In this case the trouble will be the pension the wife will be getting will almost certainly be enough to scupper all those benefits anyway.

seven-day-weekend

How do you know there will be any Benefits such as Housing Benenfit or Pension Credit in twenty years' time?

OP, it's not too late, make your own provision.

bendix

seven-day-weekend wrote: »

How do you know there will be any Benefits such as Housing Benenfit or Pension Credit in twenty years' time?

OP, it's not too late, make your own provision.

Precisely. There is something rather pathetic about giving grown up adults advice not to bother making their own provision because it will affect their right to benefits (which are not guaranteed anyway) in 20-30 years time.

Have people no pride? Have people no sense of building a stake for themselves, without being beholden on benefits or relying on handouts, no sense of achievement in saving to take care of yourself?

It's truly pitiful.

Cautious_Investor_3

bristol_pilot wrote: »

Not too late if you can afford to pay £30,000 or so per year into it before tax relief. Otherwise, I'd say it is too late. The last thing you need is a small pension which will prevent you getting the state benefits you would otherwise be entitled to in retirement. A compromise is to save it in an ISA which would enable you to live a little in the early phase of retirement when you still have your health.

1. Why £30,000? This seems rather arbitary, surely better to work backwards, find out what income is needed in retirement and then fund to that level. The funding level may be more than £30,000 it may be less, but it needs ot be calculated scientifically

2. You are assuming that state benefits will be the same in 20 odd years time when the OP retires. I'd suggest it is dangerous to make no independent provision now in the hope that state benefits are still as generous in 20 years time

3. Why would an ISA only provide an income in the early years of retirement? and how do we know the OP's health will fade?