Employer pension AND private pension?

rachael084

Hi all
I'm not completely clued up with pensions but I'd like some advice please.
I am 32 and work full time for a school. I have been paying into an employer pension for 2 and a half years (since I've been in my job). I work for a school, so it's council based.
Is it worth having a private pension as well? I have a house and a mortgage and don't currently have any savings. My husband also works full time and pays into an employer pension. I don't yet have children (though plan to in the future) though my husband and I aren't well off, we don't struggle financially.
I would prefer to retire earlier than 68 if possible, but I'm not sure whether a rainy-day savings account would be more realistic?
Thanks!

atush

You can have as many pensions as you like- you just have to sty within the annual allowance (40K or your income whichever is lower). With a DB pension you have to ask HR what the total contribution is for this year so you know how much you can add. Not a problem in your case, as you dont have much extra.

You should have some savings before you start another pension. Getting into debt in an emergency is bad news. And Sorry to say, but you cant afford to have children. You are doing great both being in a pension, and owning a home. But if you dont have enough to save now, you wont when you have children and are on maternity leave plus your outgoings will be higher.

So you need to address your outgoings and savings. Go to the debt free board and post an SOA. Others will then suggest where you can cut back. Make a spending diary and religiously write down anything you spend, even things 1 quid or under like parking coffees etc. Sell things you dont need on ebay, take up some part time work now and again. In your case make that invigilation etc.

I dont know anyone who cant cut back somewhere. This will free up something to save.

You need an emergency cash fund.

Then later, if you want to retire before 68, you need to open a DC pension be it a Sipp or PP or an AVC That way you can use that fund to spend while you wait for your other pensions to pay out unreduced (in your case).

rachael084

Thank you that's really helpful. I could definitely cut back and make savings. It's really useful to know which one to do first, especially as we don't have any other debt other than the mortgage.
Thanks for your advice.

jamesd

One thing about children is that they are expensive. Well worth your while to find what current parents are paying the see if you can save at least that much now. And if you can still do it when not working as much. If you can, that'll mean that you have a fair chance at handling the financial side of a child.

You can also try building up savings first to help out in the first few years when you're likely to be working less and/or having higher childcare costs.

Beyond that, try to allow accumulate a year's worth of spending to cover things like lost jobs. Three months is a good start.

Saying more about your mortgage would be useful. There could be useful things to do to cut the cost, particularly if the LTV is not 75% or lower.

jamesd

Retiring before state pension age isn't hard. If there's one key secret it's keeping expenses low while working. That lets you invest more and build up the money you'll need to cover your living cost until the state and work pensions start. That, your children plan and what might be a mortgage at high LTV is why we're writing about that rather than directly about pensions as you might have expected.

For personal pensions where you invest the money the biggest gain comes from making the contributions as early as possible. That gives more time for investment growth to work.

You have a severe conflict of needs, though, since at 32 you need to be getting the children saving and bearing done within a few years if your circumstances allow it. Just because of the unfortunate realities of biology.

xylophone

Just because of the unfortunate realities of biology.

Perhaps not....:)

https://www.theguardian.com/uk/2009/may/16/66-year-old-mother

I wonder are the OP and spouse making use of the best current accounts for their needs?

atush

That must have been a whole lot of IVF costs. And maybe even buying eggs.