Advice on pension needed for late starter..

mat_H_2

Hi,
I am leaving it late but here is my predicament.
I left the country between 1988 and 1998. I made no payments to the tax man. On my return I wrote and offered to pay anything owed in taxes. I paid for the previous 6 years as the tax man told me he could not see further back than that.
I have a very small navy pension, collectable at 60.
I now look to starting a pension of some sort.
There is a possiblility that I will be living abroad again in about 9 years time.

What are my options? Can I start a stakeholder and is it valid if I no longer reside here for me to make contributions too??

Any advice is appreciated.
I am now 40 years old and in work.

Thanks
Mat :T

plonkee

I would start by putting aside some money regularly into a savings account whilst evaluating your current position.

What will you get from a combination of naval pension and state pension? What will you need in retirement (at 65 say)? What is the shortfall?

Then you need to look and see how you can invest the money that you are putting aside. Consider ISAs, stakeholder pensions, SIPPs and personal pensions as potential wrappers whilst you are working in the UK.

If you want something easy and are prepared to pay in consistently for 9 years, not panicking if the stockmarket drops, then a stakeholder maybe a good option. I believe that you can invest in one whilst you are in the UK and then leave it untouched.

I like index funds (not popular here) within both my pensions and ISAs as they perform about average in their sector and not worse. But in any case, what will determine your returns are the selection of funds that you invest in. In general, these are independent of the wrapper that you use - so you can invest using an ISA, or a pension, or directly.

EdInvestor

Firstly, check your entitlement to the state pension(s), there are two.

https://www.thepensionservice.gov.uk

Note that anyone retiring after 2010 will only need 30 years' NI contributions to qualify for the full basic pension, so you should not be affected by your overseas period. Note that S2P is on top of the basic pension.

The tax free allowance for people over 65 is going up to 10k a year, so it sound possible you will be within that and thus not have to pay tax on your pensions.

If you have no access to a company pension with employer contributions,you would be best to open a stocks and shares ISA and invest your money long term there.

This is much more flexible than a pension and a better choice if you are going away again. The income from an ISA is tax free and you can extract the capital any time ( which you can't once it is locked in a pension)..