41 and no pensions advice

MoneyDreamer72

Hi

I am 41 and have no pension in place (apart from one when I was 18 for 2 years ). If i could turn back time I would had ensured I was part of my employers pension schemes thoughout my working life but i am where I am now

Regretably I am Pensions numptee..

My current dilemma is this,

1. Do I join my company pensions scheme ( even though I have been under redundancy 4 times in the last 4 years and another restructure looming on the horizon)

My current employer has a pension scheme via Friends Life with the following investment options:-

• The lifestyle option
• Three Equity funds
• Two Bond Options
• Once Cash fund.

I curently earn £37k and will need to pay 6% of my salary into the pension fund.

I would like to have a decent retirement income but know this is not reasonable to expect in the short timescale until i retire @ 65 ! .

I may also be able to invest a lump sum of £5-10k if this is deemed the most appropriate route to maximise income. Which fund is the most appropriate to use ?

2. Another option i have is to downsize from my house which will provide around £150k which i could put towards a second home to rent out receiving around £7/800 pcm rental. Is this a fesable method of gaining additional income for my retirement and childrens future?

I have a young family U7 so need to ensure I have sufficient income to support them aswell. If circumstances do not change my mortgate will be paid off in 3 yrs time and also have an endowment mature in 5 yrs for c£19k

Your advice greatly appreciated.

jem16

MoneyDreamer72 wrote: »

My current employer has a pension scheme via Friends Life with the following investment options:-

• The lifestyle option
• Three Equity funds
• Two Bond Options
• Once Cash fund.

I curently earn £37k and will need to pay 6% of my salary into the pension fund.

Does your employer contribute as well and if so how much?

MoneyDreamer72

Hi

Yes my employers contribution will be 6% until 45 then increases to 7% @ 45, 8.5% @ 50 then 10% at 55yrs old.

CLAPTON

so you contribute 6% , well actually only 4.8% because of tax relieve and your pension gets 12% (6+6)


free money
join tomorrow.

jem16

MoneyDreamer72 wrote: »

Hi

Yes my employers contribution will be 6% until 45 then increases to 7% @ 45, 8.5% @ 50 then 10% at 55yrs old.

Then join the pension scheme - something which you should have done 4 years ago.

dunstonh

2. Another option i have is to downsize from my house which will provide around £150k which i could put towards a second home to rent out receiving around £7/800 pcm rental. Is this a fesable method of gaining additional income for my retirement and childrens future?

Downsizing is not as easy as it sounds. Firstly, it can cost 10k to move and many people get used to the larger size and find something smaller hard to get used to.

Plus, if you are going down the investment property route, you would typically need 6-8 properties and not just 1.

1. Do I join my company pensions scheme ( even though I have been under redundancy 4 times in the last 4 years and another restructure looming on the horizon)

Absolute no brainer. Free money from employer. Tax relief on your contributions and tax free growth. Nothing else beats free money. 41 and virtually non retirement provision is scary. Do something now and do something decent. You are now getting to the age where £100pm would mean £100pm in real terms in retirement. Starting late is expensive.

MoneyDreamer72

Many thanks for everyones reply your comments are greatfully appreciated.

I am definately going to join the company pension, the decision is now which option do I go for ?

The lifestyle option
Three Equity funds
Two Bond Options
Once Cash fund.


Should I also add a lump sum of £5k to support any shortcomings of not having any pension pot up until now.

atush

I would add what you can afford, but don't sacrifice your entire cash emergency pot of 3-6 month spending. Or any S&S isas.

as to the options, what LS option? What equity funds?

Wouldn't go for bonds or cash at this stage (as bonds are high, cash interest low). You need to invest for growth not income.