Nearly 40 is it too late....

crescent179

I'm going to be 40 within a few weeks and i've never paid a penny into a pension. Would it be too late to start now or should I be looking at another way of investing any disposable income each month.

Thanks in advance.

Lokolo

A pension is just a tax wrapper. You should be using either a pension or an ISA.

Does your company contribute anything?
Are you a higher rate tax payer?

bigfreddiel

you need to save one way or another otherwise retirement will be a bit dire

do both - isas and pensions

its never too late i started 26 years ago at 35 - luckily my pension is with the civil service so i only pay about £35/month - goes up in april to £47 /month approx,

anyway i'm retiring soon - next 6 months or so - pension will be £11k approx with a nice lump sum of £33k

and i have isas s&s/cash and ilscs of about £300k - and in 4 years i get my sp

i guess you will be retiring at 67/68 so you have at least 27/28 years to save

jdi!

fj

atush

Gvien you will have to work another 27/28 or more years before retirement it isn't too late.

But how to save, will depend on lots of things. From employer's contribution (ie known as 'free money') to your tax rate to your overall savings.

You should ideally have a pension, cash savings of at least 6 months spending, and S&S/equity savings in ISAs etc. Not to mention owning a home/paying off a mortgage.

dunstonh

It's not too late but whether you use pension or stocks & Shares ISA is really a minor issue. How much you pay is by far the most important issue.

jamesd

As long as you're not retired yet it's never too late. Just means more money paid in per month for each Pound you want out. Just get started now it's something you're thinking about and don't let worrying about trying to be perfect delay things too long.

Does your work provide any pension matching? If yes, that's a good startign point.

Are you a higher rate tax payer? If so, for the higher rate part of your income a pension will beat an ISA.

If neither applies or for additional money, investing within a stocks and shares ISA would be a good option in many cases. This is also the way to go for a significant part of the money if you want to retire before age 55, the earliest age at which normal pension income can be taken.

Thrugelmir

crescent179 wrote: »

I'm going to be 40 within a few weeks

If you started work at 16 , you've only been in work 24 years.

You've at least 27 years until you draw your state pension.

So far from being too late.

crescent179

Lokolo wrote: »

A pension is just a tax wrapper. You should be using either a pension or an ISA.

Does your company contribute anything?
Are you a higher rate tax payer?

I work for BT and they have closed the pension for obvious reasons, they advise you to go with an independent company, I'll have to read into it a bit more.
I earn £40k+ but quite a bit of that is made up of overtime(third) so it's not guaranteed but pretty much ongoing.

Thrugelmir wrote: »

If you started work at 16 , you've only been in work 24 years.

You've at least 27 years until you draw your state pension.

So far from being too late.

Good point!

Cheers for the replies....

somethingcorporate

Whoa whoa whoa, BT haven't closed the pension. They may have closed the FS pension to new joiners but have a very generous DC scheme!

JoeCrystal

Indeed, have a look at this website:

Link to BT Retirement Saving Scheme website

When you join the BTRSS, you will start by paying 5% of your Pensionable Salary and BT will pay a further 8% into your plan. If you pay at least 8%, then BT pay in 9%. So you got 17% into pension scheme with maximum employer's contribution.

You are very lucky in many respect and this will help you to "catch up" as it is. It may be good idea to figure out what kind of income you want to live on and use pension calculator to figure it out.

Cheers

Joe

crescent179

somethingcorporate wrote: »

Whoa whoa whoa, BT haven't closed the pension. They may have closed the FS pension to new joiners but have a very generous DC scheme!

I was given misinformation by my TL then!
So would you advise to join that one then?

JoeCrystal wrote: »

Indeed, have a look at this website:

Link to BT Retirement Saving Scheme website

Thanks for the link, thats my weekend reading sorted...