don't understand pensions one bit!

bully1234

Hello

Really could do with some advice.

I am 41 Married Women and not paying into a pension, basically beacuse I work partime and my salary is quite low.

I am 2 pension pots, one with a previous employer which is frozen, value £12,535, projected lower rate fund £28,300 or £880 pa. I also have a pension plan with Prudential which is contracted out of State Second Pension currently £11,308 with an estimated £948 per annum.

I have no idea what to do next, can't afford to pay into a pension until I work full time in 3 years time. I do try to save in an ISA but doesn't earn much.

Don't understand pensions one bit !!!

Amanda.

Lokolo

So currently you will be living off £2k + state pension, which will be around £7k. Can you live off that in retirement?

If not, this is why you need to contribute to a pension.

Do you have a mortgage or are you planning on renting your whole life?

bully1234

We have a mortgage but this will be paid off before we reach pension age.

My Husband contributes to his pension (Land Rover). My sister just keeps badgering me to start paying into one but can't until I get a full time job.

Lokolo

Can I ask why you aren't working full time now? And why you expect to be in 3 years? (I'm thinking study related!)

If you aren't going to pay into a pension really until you start a full time job, I would make sure you have the emergency savings stocked up (so around 3-6 months salary). Once this has been done, overpay the mortgage, and use the difference in repayments to top up the pensions for your husband straight away, and when you get your pension started, contribute more.

However you are already 41 so you are leaving it late to really stop contributing.

bully1234

I am a Mum to girls 8 and 10 and I will return to full time work when they go to secondary school, they'll have the key to the door and able to start fending for themselves.

Perhaps I should look into contributing a small amount per month into my Prudential Pension Scheme. With the other pension currently with Fidelity (bircamb pension scheme) I am unable to add anymore as it is "ceased" so do I just leave it and wait until retirement or transfer the amount of £12535 to the Prudential Scheme? so it is all in one pot?

Amanda.;)

Lokolo

Transferring no idea!

but yes if you can keep topping up the existing one then go for it. The more you put in, the more you get out.

bully1234

ok will speak to Pru next week thanks for your help. Amanda x

The_Economist

Would it be fair to say that most pensions for average joe are a waste of time. Look at the history of them over the last 10 years or so. Things 'aint getting better if you are public sector or private sector. I 100% agree with the idea of having a pension but the cons out weigh the pros in a lot of cases. Particuly on private pensions.

dunstonh

I am 2 pension pots, one with a previous employer which is frozen, value £12,535, projected lower rate fund £28,300 or £880 pa.

It cant be frozen and have a value like that. It is either paid up or deferred. Most likely paid up.

I have no idea what to do next, can't afford to pay into a pension until I work full time in 3 years time. I do try to save in an ISA but doesn't earn much.

What about your husband? retirement planning should be viewed jointly. Not individually. It may be more tax efficient for him to pay towards your retirement provision and look at the bigger picture.

ok will speak to Pru next week thanks for your help. Amanda x

Prudential retail via IFAs. They got rid of their home service arm many years ago. You need to discuss it with a local IFA (even if Pru still had a salesforce, they are not the best place to go)

Would it be fair to say that most pensions for average joe are a waste of time.

Yes. living in poverty is such a better option !!!

Look at the history of them over the last 10 years or so

10 years is very short term and what issues do you have over the last 10 years?

Things 'aint getting better if you are public sector or private sector. I 100% agree with the idea of having a pension but the cons out weigh the pros in a lot of cases. Particuly on private pensions.

What exactly is it that is wrong with them?

The_Economist

dunstonh wrote: »

It cant be frozen and have a value like that. It is either paid up or deferred. Most likely paid up.


What about your husband? retirement planning should be viewed jointly. Not individually. It may be more tax efficient for him to pay towards your retirement provision and look at the bigger picture.



Prudential retail via IFAs. They got rid of their home service arm many years ago. You need to discuss it with a local IFA (even if Pru still had a salesforce, they are not the best place to go)


Yes. living in poverty is such a better option !!!



10 years is very short term and what issues do you have over the last 10 years?



What exactly is it that is wrong with them?

Hi dunstonh,
as you know i have always been wary of the value of pensions. No living in poverty is not a better option and i dont think that is a justified comment. Like most things if you realy look into all the ifs, wots, and buts there is a very diffrent answer to the one the commercial world wants you to see. As i said i'm totally for the idea of pensions but at the end of the day someones gotta pay for them and someone wants to make money off them. So there will always be a conflict of interest.

uk1

bully1234 wrote: »

Hello

Really could do with some advice.

I am 41 Married Women and not paying into a pension, basically beacuse I work partime and my salary is quite low.

I am 2 pension pots, one with a previous employer which is frozen, value £12,535, projected lower rate fund £28,300 or £880 pa. I also have a pension plan with Prudential which is contracted out of State Second Pension currently £11,308 with an estimated £948 per annum.

I have no idea what to do next, can't afford to pay into a pension until I work full time in 3 years time. I do try to save in an ISA but doesn't earn much.

Don't understand pensions one bit !!!

Amanda.

Hi Amanda,

I think you're looking for some general advice rather than a very specific one - which no one here can give without much more info.

Generally speaking in your situation you should contribute to a scheme for yourself. Whilst others have said "pensions are bad" arguably it is a good time to buy into a long-term pension scheme where your contributions buy equities (stocks and shares). The reason why this might be a good time is because currently the world financial situation is in turmoil and this might imply to many that the stock and shares your contributions will be are comparatively deflated in price. The argument therefore would be that over the longer period you will get much more for your cash than if you saved in say a cash fund.

I over contributed to my pension schemes (I paid in 16% of my salary when I was employed) and you simply get use to doing without whatever it was that I'd use the cash on. With the full benefit of hindsight those contributions were the best thing I'd ever done.

Working part-time now your contribtions will be lower now - but once your use to living on less you can then contribute a disproportionately higher part of your incremental income when it increases when you work full time.

With respect to your other pension pots - you're going to need to have someone look more closely at those funds, with what they are invested in and the charges and any penalties for leaving. The key thing is make no decision before you understand the details.

Good luck.