Should I (can I?) start paying into a pension if I'm on benefits?

michaels

Taking a step back, the reason for saving for a pension is that you want to make what you receive now and and what you will get post retirement more equal. For most retirement will see a loss of employment income to be replaced by the state pension that will be lower. Thus they put aside some of what they earn now to use then to keep income in the two periods more equal.

In your current situation will you income reduce at retirement age? If not there is little point living on less now so you can have more then.

justme111

You said it clearer than I did, michaels.
I would go even further and question logic of pension provision for low earners with mortgage and children. When they are retired and have no NI and tax payments, no mortgage and children independent they may find they have more disposable income from SP than they had when they were working so pension provision for them has little sense as well.

jamesd

justme111 wrote: »

they may find they have more disposable income from SP than they had when they were working so pension provision for them has little sense as well.

More income from a couple of state pensions but work and personal pensions still buy the freedom to retire earlier and do better in situations like inability to work when relatively close to state pension age. Freedom to choose can have a lot of value.

skater_kat

on esa you can do permitted work under 16 hours per week. as long as your earnings are under the threshold (not sure on current figure - its approx £120 or so per week after tax and HALF your pension contributions).
means tested benefits disregard HALF of all pension contriutions. so:

your earnings £140 per week
pay into pension £40 per week
total income for benefits purposes = £120

simplified version, but you see how it works. if you find a sympathetic employer, or you do self emplloyed work, it could be useful.

check rules on the benefits board but permitted work used to be 52 weeks on ESA WRAG.

HTH