Pension advice needed

Nome37

Hi all

I am a 37 year old woman who started my first 'proper' job at 28. I paid into a LGPS at Westminster Council for 2 years and then left leaving my payments still in the scheme and went to a housing association where due to personal events clouding my judgement I made the mistake of not joining the pension scheme for the first 2 years. I am now a member for over a year paying in 5% while my employer contributes 10% but as I am now only part time earning 14k I can't see that adding up to much in retirement.
Anyone know how can I boost my pension pot?

mgdavid

Nome37 wrote: »

Hi all

I am a 37 year old woman who started my first 'proper' job at 28. I paid into a LGPS at Westminster Council for 2 years and then left leaving my payments still in the scheme and went to a housing association where due to personal events clouding my judgement I made the mistake of not joining the pension scheme for the first 2 years. I am now a member for over a year paying in 5% while my employer contributes 10% but as I am now only part time earning 14k I can't see that adding up to much in retirement.
Anyone know how can I boost my pension pot?

money's money; you need to earn more, either go fulltime or find a higher-paid job - or better still, both .

opinions4u

Pay more in.

There's no magic wand.

Nome37

I was thinking maybe of buying a house on a buy to let mortgage and then could I put a pension wrapper around this?

Is there a maximum that you can pay into to a pension?

GhIFA

You can't hold residential property in a pension.

dunstonh

I was thinking maybe of buying a house on a buy to let mortgage and then could I put a pension wrapper around this?

Thankfully that option was banned in 2006.

Is there a maximum that you can pay into to a pension?

£50,000 a year or a lifetime allowance based on value (not contribution) of £1.5 million

Nome37

Ok thanks so if I had not contributed the full 50k a year then I could do a buy to let and then sell it and use that money to buy an annuity?

margaretclare

Nome37 wrote: »

Ok thanks so if I had not contributed the full 50k a year then I could do a buy to let and then sell it and use that money to buy an annuity?

I don't think you can buy an annuity until you're at least 55, but I could be wrong.

From where I'm sitting, it looks like a good deal that you have at present. You're contributing 5% of your salary, your employer contributes 10%, that's total 15% if my maths is right. You also pay normal NI contributions so you're in line for state retirement pension, whatever it's going to be called. You're nowt but a lass yet,
possibly will increase your hours to more than part-time? Don't make irrevocable decisions at this stage. It's also possible that you might be allowed to 'buy back' those 2 missing years.

GhIFA

Nome37 wrote: »

Ok thanks so if I had not contributed the full 50k a year then I could do a buy to let and then sell it and use that money to buy an annuity?

If you want to do a buy to let, then forget about the £50k annual allowance (based on the information you have given, the maximum you can contribute annually anyway is £14k, not £50k) - it is irrelevant - a buy-to-let purchase has nothing to do with pension legislation. (BTW, if you're only on £14k salary then I suspect it's going to be difficult to find a lender that will lend to you for Buy-to-Let).

The simple answer is pay more into your employer pension - Tax relief on contributions, no tax payable on any growth within the pension, tax free cash on taking the benefits.

If you make any gains on a buy-to-let property then you are potentially going to create a Capital Gains Tax liability when you sell, which will reduce the amount available to purchase an annuity (which will need to be a purchased life annuity, as the funds won't be within a pension wrapper) - not all of the income will be taxed from a Purchased Life Annuity, but you won't have the ability to take any tax free cash using the property route.

Also you need to consider what happens if you are unable to sell the property at the point you retire, or it is worth less than you paid for it, particularly if you still have a mortgage outstanding.

Don't get me wrong, usin rental property can have its place in retirement income planning, but based on what you have said about your circumstances I would question how appropriate it would be to you at the moment (if it is even available to you).

atush

At 14K, a buy to let is going to be hard to do, much less a dubious choice.

Earn more, or pay more in are your two best options.