Age 52 and Need Pension Advice

Caspar1

Hello All
I came upon this forum today and wonder if anyone can help?

I am 52 basic rate tax payer and have 2 small pensions that I took out years ago and haven't contributed to for years. I haven't been able to sort a pension out until now and am worried. Went through a divorce had to start again (got no maintenance) and youngest has just finish University and left home and find it is only now that I can financially make a start.

I don't know whether to move the two small pensions into one new one that I would contribute regularly into going forward, or if one of them is good enough to keep and move everything into that and re-commence a monthly contribution?

Pension 1 (Aviva)

Units held 1345.5522, Unit price 5.8306 Total value 7845.38
Final bonus 2586.70
Value of Fund in July 16 was 10,432.08
Transfer Value £10,432.08
All in the 'With Profit Guaranteed Fund'
But has a note that Aviva plan to add an extra bonus to my policy when I decide to take my money out of this With Profits Fund. Currently they expect the extra bonus to increase my policy benefits by up to 7.5%, but this could change over time. (They say it is following improvements in the financial position of the fund over the last few years).

Pension 2 (ReAssure)

Units Held as:
Managed Pension Type A Series 02 (Managed) 31.3100 Units
Managed Pension Type A Series 02 (Managed) 31.3100 Units
Managed Pension Type B Series 02 (Managed) 70.9600 Units
Managed Pension Type B Series 02 (Managed) 70.9600 Units
Fund Value £3972.18 (Nov 16)
Transfer Value £3665.46
I phoned to enquire and the split between funds as
74% Stocks (Financial Services, Consumer Defences, Industrials, Healthcare, Consumer Cyclical)
16% Bonds
3.28% Cash Assets
Rest in Other
I can switch up to 20 times in the year free between other funds if I so wish.

From what I have read from other answers on the forum, at my age, it is ok to perhaps have some of the investment in Equities. I don't expect to have my investment in totally risk free products as I wouldn't be able to make up much for lost time. So don't mind some risk, but not high risk.

My 2nd husband is 9 years younger than me, and has a final salary pension but will work for about 13 or 14 years after I retire (I want to retire at 62). His pension will yield approximately £18,000.pa

However, I have always been independent and I want to make sure I have an income other than the paltry state pension in old age.

I personally can't put more than about £150-£200 per month into a plan, which I know isn't a lot. Hence I know I may have to take some investment risk to try to catch up. But what could I ideally achieve as a Basic Rate Tax Payer?

I hope I have given enough information to give a good overview, and thanks in advance to all who take time to read about my plight.
Caspar

Linton

There is a very wide range of outcomes but, ignoring your old pensions, say you contributed £2400/year gross (£1920 net) increasing with inflation and invested in a global diversified range of equities, If the average return was 5% above inflation after 10 years you would end up with a pot of about £30K at current prices. With drawdown this could give you a sustainable income of perhaps £1200/year with some hope of long term inflation matching. The assumptions leading to this figure are reasonable (possibly a bit optimistic) though perhaps for real planning one would be advised to use lower values.

So it's not life-changing I am afraid.

PS wont your employer contribute?

xylophone

Does your employer not offer a pension scheme?

Have you obtained a New State Pension Statement to help with planning?

Linton

Assuming you start off your new pension with the lump sums transfered from the old one the total rises to about £52000 - say £2100/year.

Caspar1

Thanks for the reply. I am self employed and have been all my life.

Caspar1

I won't receive the state pension until age 67 and suffer now with a disability. I don't feel I will physically be able to work past 62. However, I have logged on and it says that at todays values at age 67 I will be on 8121.59 pa (676.80pm/ 155.65pw)

dunstonh

Caspar1 wrote: »

I won't receive the state pension until age 67 and suffer now with a disability. I don't feel I will physically be able to work past 62. However, I have logged on and it says that at todays values at age 67 I will be on 8121.59 pa (676.80pm/ 155.65pw)

You are someone that has gained under the single state pension changes. So, that is some good news.

What funding have you put in place for you to live on between 62-67 (where you will need a high income replacement) and 67 onwards, where your needs will be a little less?

Caspar1

I am hoping that some kind of pension savings now, will give me some income before my state pension starts. However, my husband will be earning enough to keep us both and money won't be a worry for living comfortably. Our mortgage will be paid off in about 7 years. So have just realised now that for the remaining 3 years, I will be able to input more into a pension.

It is purely for my own self respect, I would like an income. Ideally £800 from aged 67 (including the state pension) which would mean I would need around £120 per month to achieve on top, which when I am only putting in £200 pm, doesn't seem possible I know.

So on thinking about this, I could input £200 pm for 7 years (£16,800) and circa £700 for 3 years (say £25,000), making a total of 41,800 investment, plus the two lump sums above of currently£14,100, resulting in 55,900 overall.

Are any of the two Pensions worth continuing with the monthly payments into going forward, or is there a pension investment available that could bring them both in and continue? What kind of funds would be best looking into for some risk and some safety?

Thanks

chiefie

Caspar1 wrote: »

I won't receive the state pension until age 67 and suffer now with a disability. I don't feel I will physically be able to work past 62. However, I have logged on and it says that at todays values at age 67 I will be on 8121.59 pa (676.80pm/ 155.65pw)

State pension age is being reviewed and recommendations made in April. I am the same age and expect it to go to 68 for us at least

xylophone

You could explore transferring both into a personal pension and continuing to contribute.

You could consider leaving them as they are and starting a new plan.

https://www.cavendishonline.co.uk/pensions/

http://www.hl.co.uk/pensions/sipp

http://monevator.com/category/investing/passive-investing-investing/

https://www.gov.uk/tax-on-your-private-pension/pension-tax-relief

AllyMac

I wouldn't look at a pension for "self respect" is look at it as a necessity. Marriages don't always last, as you (and I!) know.
Are there any changes you can make maximise your retirement saving?