30, No Pension and 14000 in Debt.. HELP

Ali_Netball

Hi my partner is 30 years old currenlty paying off 14000 worth of debts and has no pension to speak of!

To say that this concerns is an understatement!

I am a teacher and have a teachers pension but I am 25 and only started work a year ago; so I am a few years behind too!

Are we doomed? Is there hope? Is it too late!

He will be debt free in a max of 3 years, negotiating with the bank now trying to be allowed to do overpayments now and again as can afford it!

I dont want to skrimp and save when i'm retired! Any suggestions or is it simply... we have to wait unitl he has paid off his debts before we get him a pension. Also, does anyone know any good pension schemes.. I'm a bit of a dunce when it comes to this stuff?

EdInvestor

He's already paying into the state pension.Pensions are not the preferred tax wrapper for basic rate taxpayers with no employer contribution.You are on the right track, first pay off the debt and then start saving in a cash ISA - and later a stocks and shares one.

Are you buying a home? Concentrate on that first at your age.

Ali_Netball

Currently looking to get rid of debts first but like to get a house next year.

firesidemaid

and once debts are paid off and you have a mortgage, overpay as much as you can so that the banks get as little out of you as possible.

purch

I dont want to skrimp and save when i'm retired!

.......and stop worrying about an event 40 years away...

Everyone needs to plan and make arrangements for their retirement, but when you are 25 you shouldn't be worrying about it !!

Ali_Netball

I appreciate that but I should be prepared, I'll regret it later if I'm not!

Primrose

I disagee with Purch about not worrying about planning for an event which is 40 years away. With the State in future funding less and less towards our ultimate retirements, unless we grasp the nettle of investing in pension funds very early to achieve the required long term growth, many people will simply suffer an impoverished old age and be unable to afford to retire. Many young people still haven't grasped this fact yet. Start paying into a pension scheme the day you receive your first pay cheque.

EdInvestor

Primrose wrote: »

With the State in future funding less and less towards our ultimate retirements...

Where did you get that idea?

Many people will be getting much more out of the state than before for several reasons:

-as of 2010 you will only need 30 years of NI conts for the basic state pension. Overnight the numbers of women getting the BSP will double from around 35% to 70%.In addition calculation of the NI conts will change radically in future so accrual will be much easier

-also as of 2010 men can get a 60% state pension on the basis of their wives' NI, even if they haven't paid any

-a couple of years later old age tax allowances will rise so that people over 65 will be able to earn 10k in pension income a year tax free

- The state 2nd pension is now paying out as much as double the basic state pension to those with a full work record from 1978 and an average salary

-The basis of the S2P is being rearranged so that low paid people and carers can be credited with contributions in future, so that they too will get both pensions.

Hardly a retreat by the state.

dunstonh

Hardly a retreat by the state.

All paid for by increased taxation and an increase in the state retirement age to 68 in stages.

raino144

...........

raino144

Hi

I would suggest getting rid of debts is first priority (then you have hopefully money to play with).

If partner is 30 then there is 35-40 years to correct non-payment of pensions so far. I have an account with HL (Hargreaves Lansdown) and on their website they have a rule of thumb that when you start a pension divide your age in two to give the total% (employee cont'n and employer cont'n) which would give a pension of roughly half his final salary.

Having said that I would say look at dunstonh's various posts (I have taken his advice before now and respect his judgment) and look at your circumstances - the future can't be predicted so you need to consider your own circumstances (consult an expert if necessary). Having said that, congratulations for being in the Teachers' Pension Plan... it is as good as they come at the minute.