Help: Husband's Personal Pension is worthless

Blusoop

Due to my DH and myself not being taught from a young age how to save money for the future, I am reeling to discover his personal pension is worth literally a few quid a month!!!! I feel sick to my stomach. He has always been really careful with money so this has been a big scare for myself. I have no pension pot either as I have spent the last 12 years being a Mum, and carer to my 8 yr old. My DH is 53 and I am 42. Fortunately we have paid off our mortgage.
What would anyone advise to intensively increase our pension pot between us?
Full time work could be tricky for me with receiving carers as you are only allowed to earn £120 pw. But I'm wondering if I worked in a school I could earn more pw so long as over the year it worked out at £120 pw?
Please could someone advise me on how we can avert disaster??? Or at least improve the future a little bit?

pepper77_2

Make sure you both have 30 years NI contributions (or more) by the time you want to retire.
That gives you a joint income of £155 each free of any income tax. Your home is paid for, how much do you fancy over that £155?

dunstonh

I am reeling to discover his personal pension is worth literally a few quid a month!!!!

Unfortuntly, if you pay in peanuts, you get back peanuts. Sadly, some people seem to believe that if you pay in £30pm for 30 years you will get back £1000pm for 30 years. You broadly get back a bit more than you pay in using real terms.

On the plus, side, given your ages, its likely you are relying on statement projections for your figures and these are notorious for understating the likely outcome. So it may be £4 instead of £2.

Full time work could be tricky for me with receiving carers as you are only allowed to earn £120 pw.

The earnings level is not a cap. Its just where the benefits get reduced/removed. You may need to decide if going through that point is better to improve lifetyle (by increased employment income minus benefits) or stick with the lower level under the benefit cap.

Ultimately, the only solution for getting more is to pay in more. Being able to afford that comes back down to how much you earn in a job and how much you are willing to give up in benefits to get that extra. There are no magic beans for a solution.

Also, do remember the state pension. If you both qualify, you may well find you are not far off what you are earning already. So, you may not need a big personal pension.

Silvertabby

pepper77 wrote: »

Make sure you both have 30 years NI contributions (or more) by the time you want to retire.
That gives you a joint income of £155 each free of any income tax. Your home is paid for, how much do you fancy over that £155?

35 years now.

bostonerimus

Your projection may well be lower than you'll actually get because the same current low interest rates that give very large pension CETVs will give low income projections. You also have time to save. So take all the money you were paying in mortgage and invest it in either a pension plan or your ISAs.

[Deleted User]

Hi,

just me being nosy now, you don't need to answer, but,

is this a 'what he will get when' figure?,

how much was he paying in and for how long?,

does it still have years to run?.

Blusoop

pepper77 wrote: »

Make sure you both have 30 years NI contributions (or more) by the time you want to retire.
That gives you a joint income of £155 each free of any income tax. Your home is paid for, how much do you fancy over that £155?

Thanks for that. My DH probably had his 30 yrs already. I estimate I probably have 10 years NI so far but if I can get working again soon I still have 20 yrs work ahead of me.

Having the house paid for is a relief but you've got to have the money to run it and maintain it, pay for food, and be able to still enjoy our lives after retirement.

Thank you for the advice...I think it was just a bit of a shock and I needed someone to say it isn't as bad as I feel it is right now!

[Deleted User]

Hi,

you might be able to make voluntary NI contributions to increase your pension.

Look.

Blusoop

Unfortuntly, if you pay in peanuts, you get back peanuts./QUOTE]

Yes I agree. I don't understand pensions or mortgages etc. Seriously think schools should be teaching GCSE kids home care lessons...how to look after themselves and their finances.

The only people who tend to advise you on pensions are the people who sell them...and let's face it they make money out of selling them, i think this is what scared my DH off investing.

Blusoop

bostonerimus

Your projection may well be lower than you'll actually get because the same current low interest rates that give very large pension CETVs will give low income projections. You also have time to save. So take all the money you were paying in mortgage and invest it in either a pension plan or your ISAs./QUOTE]

Which would be best add to pension plan or put it in an ISA?

Maybe when I sort out my employment I should plough a good whack of the money into my pension which I probably only paid into for 2 yrs. And start making payments from my DHs wages into an ISA?

Dox

[Deleted User] wrote:

Hi,

you might be able to make voluntary NI contributions to increase your pension.

Look.

May not be necessary - you should automatically get NI credits if you are receiving Carer's Allowance. See https://www.gov.uk/national-insurance-credits/eligibility