No Pension Age 42

Boo_boo_bear

Hi my hubby is 42 and has no pension. He has been self employed since age 16yrs. He is currently bankrupt after his business went into liquidation.

Is it too late to start paying into a private pension? We can afford around £400 per month and over pay on our mortgage by £200.

Im 34yrs old and have a bits of pension pots, currently paying into the nhs pension.

We have 25yrs left on mortgage.

Any advice would be great.

TheTracker

If he stuffed 400pm into a pension for 25 years and managed to have a return on his investment of about 4% above inflation he'd end up with about £200k in today's terms, maybe enough to drawdown £6-8K pa in retirement. Perhaps 50% more taking account of the mortgage over payments. How does that sound to you?

dunstonh

Is it too late to start paying into a private pension?

No.

Any advice would be great.

It is going to be a struggle potentially (depending on where you are in the country) and you are going to need to take the retirement planning seriously and not give it a half hearted contribution to tick a box. However, it is still possible to get what you need. Especially if your provision is worthwhile.

xylophone

Has he obtained a state pension forecast?

https://www.gov.uk/yourstatepension?utm_source=Mail-Online&utm_medium=Partnership&utm_campaign=GTKY

https://www.cavendishonline.co.uk/pensions/stakeholder-and-personal-pensions/

jamesd

He's 42. Forget overpaying g on the mortgage and pay into the pension to get tax relief then at age 55 he can take out 25% of the pension pot - roughly the tax relief - to overpay. Hard to beat tax relief on your mortgage.

Money in a pension from which nothing has been take is safe from bankruptcy and also largely immune to creditor claims before bankruptcy. Unlike a home that can be taken and sold to pay debts.

Boo_boo_bear

Thank you. Its better than nothing.

Boo_boo_bear

Yeah we need to look at it properly. Im 8 yrs younger and my pot should be ok not the best due to part time working but ok. Thank you.

Boo_boo_bear

No but will do that today. Thanks

Boo_boo_bear

Hi

Thanks for this, its def not something we thought about with the lump sum to over pay. Yeah creditors cannot touch the pension pot which is good. Our house is ok too currently which is a relief. Thanks

atush

Does he currently have a job/income? How much did he earn this year before his business failed?

He is restricted to 40K of income or less, dep on how much he earned. If he isnt working/hasnt worked this year he is limited to 2880 of contribs which are grossed up to 3600 with TR.

He should look for a job that has an employers pension, will hep him catch up.

Ray_Singh-Blue

What's the worst case? Work until 67 and then retire with a house owned outright, 2 state pensions + your work pensions? That's not too shabby.

Another private pension gives the option of earlier retirement, or more money when retired. I guess you need to weigh how much you want those things, against how much you want to spend now?