Help for 51 year old

Gemsy81

My partner has always lived carefree and happy go lucky, not seeming to think he would ever grow old....he now finds himself pension-less at 51.

We have a family now and would like some security for us all, and a plan of sorts for old age!

Is it worth him starting a pension now, or is he destined to work until he drops?

MallyGirl

it is worth it. He has 15/16 years till State Pension Age which is enough time to use investments. Does he work for a company? If so they should set him up in a pension. If not then he can start a personal pension or SIPP. All money into a pension gets tax releief, plus a company one would gain some employer contribution too.
The State Pension will only be about £8k so unless that is enough to live on he should be starting a pension now.

dunstonh

Is it worth him starting a pension now, or is he destined to work until he drops?

Depends on whether you and he takes retirement planning seriously or just starts a pension with a token amount to tick a box to say "pension done" (which unfortunately too many do nowadays)

Compare what he earns now to the £8000 a year state pension. Some people dont need much above that. Others need a lot more.

xylophone

Have you both obtained a state pension statement?

https://www.gov.uk/check-state-pension

Is there no workplace pension for either of you?

Otherwise there might be something here

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

https://www.pensionsadvisoryservice.org.uk/about-pensions/saving-into-a-pension/pensions-and-tax/tax-relief-and-contributions

Daytona

The timespan is so short that whether to take out any additional (ie non state) pension may depend upon the interaction with any means tested social security benefits received. There's no point saving if the end effect is to reduce benefit payouts leaving him in the same position.

What income does he/you all require ?

Sorry Gemsy, more links, but they may help you to understand the situation and enable you to answer questions on here -
http://www.stoozing.com/calculator/soa.php
https://benefits-calculator.turn2us.org.uk/AboutYou

Mutton_Geoff

dunstonh wrote: »

Depends on whether you and he takes retirement planning seriously or just starts a pension with a token amount to tick a box to say "pension done" (which unfortunately too many do nowadays)

Too true. I was 38 and realised I hadn't done very much pension saving. Some friends helped switch on the "lightbulb". I was fortunate to join a company with a DB scheme but I still opted for max accrual rate (costing me 13% of my salary). I also topped this up by paying into AVCs a toal of 30% then later 50% of my salary. At first it was painful, I had lodgers to help with my mortgage, I started a small business that provided extra income but after a while, I just got used to my level of income and lived within it.


22 years later, I am 60 and can see the benefit of that so I would say the OP still has a chance but it is going to take a serious onward commitment to achieve anything decent.


Fag packet sums. If a decent pension is say, £2k a month (£24k a year), the state should provide £8k of that, so you need £16k additional. If you believe in 4% drawdown, then you'll need a pot of £400k at retirement.


You need to save around £1,200 a month to achieve that. If you are a high rate tax payer, the good news is that will cost you "only" £700 a month in lost income. Can you afford that?


There are plenty of spreadsheets online to help you work out your needs now and in retirement. The SOA forms here help too. Do two, one for now and one for how you think life will be in retirement to gain an idea of your needs.


I have many friends from middle management type jobs, now retired and they all seem to say around £2k a month is needed for a comfortable retirement, holidays abroad, replacement (not new) car every few years.



If your income is lower, then you just have to do what you can, but as dunstonh says, you have to take it seriously.

WobblyDog

It could well be worth starting now. The tax (and sometimes National Insurance) savings can be considerable.

For someone in their early fifties, money put into a pension can be often be partially accessed from 55 onwards, so it's not as if the money is being locked away for a long time.

enthusiasticsaver

Yes it is worth starting a pension but he will need to put a relatively high percentage of his salary in to accrue any benefits. Does his employer not offer a pension?

Gemsy81

Thanks for all the replies. We are both self employed, so no employer pensions (although all our employees get them! )

I am 36, and have already started one, so I'm happy I'm at least partially on track!

greenglide

We are both self employed, so no employer pensions (although all our employees get them! )

You claim to be "self employed" yet you have employees?

Do you actually have you own limited company? If so you are not self employed, you are employees of that company. If so the best way of contributing to a pension is by the company making employers contributions, you would not, normally make contributions yourselves.

kidmugsy

greenglide wrote: »

Do you actually have you own limited company? If so you are not self employed, you are employees of that company.

More likely they are directors rather than employees, I'd guess.

greenglide wrote: »

If so the best way of contributing to a pension is by the company making employers contributions, you would not, normally make contributions yourselves.

I agree, company contributions would be the way to do it because of the tax avoided.