worth paying into a private pension at 43??

peter1000

Hi there is worth me paying into a private pension now?I got just under 11 years in a final salary scheme with littlewoods,I left that pension 5 years ago after getting made redundant,iam working for arriva buses now,who have final pensional scheme,that is only open every 3 years to join,i turned down the chance to join it last year as its expensive upto age 45 its 9.5% of wages and then over that age its 10.5 then as you get older its 12.5%,its totally seperate from the company,and they do not make any contributions,when i first joined got given a pack for private scheme with arriva insurance,again they do not make any contributions.I have about £82000 in savings,was £100000,as i inherited a property 9 years ago,sold it 6 years ago,so iam now trying to build up my savings again,but not having a pension bothers me,as iam only a driver i do not earn big wages.example of that final pensionable scheme was if you earned £15000 and payed into the schem for 10 years you would get a pension of 1500 quid a year at retirement age,i thought it was not very generous,please point in the right direction please as i dont have a clue thanks peter

JoeCrystal

From what I gathered from your post:

You have eleven years service in a final salary scheme (Valuable)
You turned down the choice to join another potential valuable final salary scheme at reasonable cost (Generally it is cost of 20-25% of the salary)
Thus, they offered you a private personal scheme with no employer's contribution...

Is this basically what you said?

If it is indeed the case, then join the Final Salary Scheme!

Loughton_Monkey

It seems you have cost yourself a small fortune by refusing to join the scheme. There is no such thing as 'too expensive', because it is an investment. If I said give me £4 and I'll give you £10 in return, you'd bite my hand off. If I said give me £8 and I'll give you £20, would you say that's too expensive????

You simply must join the company final salary scheme at the next opportunity.

bristol_pilot

With pensions you either have to save a lot or save nothing at all (and throw yourself on the mercy of the state). It is too late for you to do the latter as you have considerable savings and 11 years in a previous pension scheme. So yes you should join that final salary scheme asap and probably make some additional provision on top. 43 is not too old to start saving for retirement - you have 20 years to go and you are not starting from nothing.

peter1000

its not a proper final salary scheme,final pensionable pay its called i think,not got the paper work to hand,not a penny given by the company all down to the employee,same with the private insurance based scheme say with aviva,not a penny given to you for that,how nice it must be to be a public servant and get looked after.......

Lokolo

peter1000 wrote: »

its not a proper final salary scheme,final pensionable pay its called i think,not got the paper work to hand,not a penny given by the company all down to the employee,same with the private insurance based scheme say with aviva,not a penny given to you for that,how nice it must be to be a public servant and get looked after.......

Give it a couple of years and companies have to contribute.

jem16

peter1000 wrote: »

its not a proper final salary scheme,final pensionable pay its called i think,

So what do you think that offers you?

jamesd

Is the amount paid in any way linked to the salary you've been getting, except through the percentage that you can pay in?

From your description that "if you earned £15000 and payed into the schem for 10 years you would get a pension of 1500 quid a year at retirement age,i thought it was not very generous" it seems in some way related to your salary, not the the amount you pay in. That's generous. It means you pay in up to 12.5% of salary for ten years then at retirement age (say 65) you get 10% of salary for 22 years, assuming you live as long as half of 65 year old men today. It's probably also increased with inflation during those years. If it is related to salary in this way then it's a good deal and you should get in when you can.

Knowing the answer to this is very important because it's a huge factor in whether it looks like a good or bad idea to join this scheme rather than using a pension set up just by you for yourself or other ways.

Is it the salary sacrifice pension scheme? If yes, then you save the NI that you'd be paying on your pay and that's paid into your pension instead. Also paid in before tax is deducted, so no income tax.

For retirement investing the most important part is the investments. If your current savings are mostly invested in a stocks and shares ISA so they can get the higher growth that investments get on average compared to savings accounts then you're doing fairly decently. If they aren't then long term you're making yourself poorer than you could be.