Stay at home mum, pension or LISA

LexxO

Hi,

I am a stay at home mum with 2 children and have recently been thinking about my options for retirement planning. I have some eligible years that will qualify me for (some, not much) of the state pension and also have some ni contributions from child benefits however I have been thinking I should also be saving some sort of private/personal account as well.

My main question is as I am a complete non earner is it worth trying to set up a personal pension? I wouldn't be able to contribute very much each month and from the brief research I have read so far it seems like you need to pay in a fair amount to get anything worth while back.

My other question is about the new LISA accounts. Would this be a better option for me? I know they are quite new and again I wouldn't be able to put much away but these seem a bit less complicated??

Or is there another option I haven't considered??

TIA

Lexx

xylophone

You have obtained a new state pension statement?

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

https://www.gov.uk/national-insurance-credits

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

You could consider a stakeholder pension if your contributions will be very modest.



Even with no relevant earnings, you can contribute up to £2880 per tax year to a stakeholder/personal pension and the provider will claim relief of up to £720.

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

Brynsam

You won't get much back from any sort of savings account unless you contribute a reasonable amount.

You say you wouldn't get much back from a pension, but if you pay in to a personal pension you get 20% tax relief credited to your pension even if you are a non-taxpayer.

Would it be a better option than a LISA? Much depends on your objectives and when you are likely to need the cash (and whether having a pension you couldn't get your hands on might actually be a good thing!).

Helpful comparison of the two at https://www.unbiased.co.uk/news/pensions/lifetime-isa-vs-pension-the-showdown

LHW99

You won't get much back from any sort of savings account unless you contribute a reasonable amount.

but if you make a start now, its a foundation you can build on once the children are older and you perhaps look at starting your own business, or getting part or full time employment.
Every little helps, and the earlier you put things away the longer they have to grow.

badmemory

If you ever need income based benefits they will count the LISA (& any money in the bank) as savings which will reduce the benefit you receive. If the money is in a pension they can't count it. If you have to withdraw it from a LISA I believe you also have penalties to pay.