Should I start a pension?

LHW99

Possiblyretired said:

I understand this bit - 
You can increase your entitlement by over £5/week each ( about £300/year for life) for each "missing" year or future year that you can buy (for about £900), up to retirement age. 

But not this bit - 
Buying all your missing/future years would cost (at most ) a one off £16000 and would "buy" £5k per year for life

How can both be correct?

£5 per week = (approx) £260 pa x 2 if you both buy a year = ~£520 pa

You are looking to buy quite a few years each, to get you to the max state pension. So multiply £260 by the total nos of years required / available for both of you, and that adds up to the ~£5k pa mentioned.

And SP is index linked / subject to triple lock, so you should earn the cost back in just a few years.

Possiblyretired

LHW99 said:

Possiblyretired said:

I understand this bit - 
You can increase your entitlement by over £5/week each ( about £300/year for life) for each "missing" year or future year that you can buy (for about £900), up to retirement age. 

But not this bit - 
Buying all your missing/future years would cost (at most ) a one off £16000 and would "buy" £5k per year for life

How can both be correct?

£5 per week = (approx) £260 pa x 2 if you both buy a year = ~£520 pa

You are looking to buy quite a few years each, to get you to the max state pension. So multiply £260 by the total nos of years required / available for both of you, and that adds up to the ~£5k pa mentioned.

And SP is index linked / subject to triple lock, so you should earn the cost back in just a few years.

Thanks. I did see that hmrc have a latest news and updates announcement of -

You can soon check if you can make voluntary National Insurance contributions, and pay using the online service

so will check it out when that's up and running ( it took many attempts and an age to get through on the phone last time ).

xylophone

so will check it out when that's up and running ( it took many attempts and an age to get through on the phone last time ).

Is there a reason why your husband has only 35 qualifying years and even if that is the case, why he has not qualified for a full NSP?

He was aged 63 (?) when you sold your business and you mention that he was never a member of a pension scheme, contracted out or otherwise.

You have checked his NI record on the State Pension Forecast?

£175 is the estimate at 5/4/23 shown on his latest State Pension Forecast?

Possiblyretired

xylophone said:

so will check it out when that's up and running ( it took many attempts and an age to get through on the phone last time ).

Is there a reason why your husband has only 35 qualifying years and even if that is the case, why he has not qualified for a full NSP?

He was aged 63 (?) when you sold your business and you mention that he was never a member of a pension scheme, contracted out or otherwise.

You have checked his NI record on the State Pension Forecast?

£175 is the estimate at 5/4/23 shown on his latest State Pension Forecast?

I got that wrong. He only has 30 full years, it is £174.73 showing as the estimate based on his National Insurance record up to 5 April 2023. 

Possiblyretired

Possiblyretired said:

eastcorkram said:

Just curious. If you're currently spending £35,000 a year, and not working, where does that come from? 

The £35000 figure is another one of my guesswork figures but based on very real average historical spending. I tend to over estimate spending to be on the safe side.
We sold the business last June and had 32000 in a current account, now about 20000. There is some interest earned in that account but quite low rate.

Sorry, that should have been -
sold the business in March. Previous tax year.

Marcon

Possiblyretired said:

We have no private pensions and know nothing about pensions.

Why not? The question isn't meant to be rude or accusatory, although I suspect it sounds both!

....and are you absolutely sure neither of you has ever built up any sort of private pension entitlement - did you ever work for someone else as an employee?

Possiblyretired

Marcon said:

Possiblyretired said:

We have no private pensions and know nothing about pensions.

Why not? The question isn't meant to be rude or accusatory, although I suspect it sounds both!

....and are you absolutely sure neither of you has ever built up any sort of private pension entitlement - did you ever work for someone else as an employee?

Not rude or accusatory at all. No excuse really. Didn't really plan to sell the business, it just sort of happened.
Apart from very early years we've both always been self employed or hustling in Europe. In business partnership for 12 years or so. 

xylophone

hustling in Europe.

Sounds slightly on the tabasco side as PG Wodehouse would have said....

Perhaps you should write a book about your experiences,,, a best seller would bring in the shekels!

It is certainly worth your while to check on making voluntary contributions so as to maximise state pension entitlement.

Are you both making full use of your ISA entitlement?

And a personal pension for each of you?

Possiblyretired

xylophone said:

hustling in Europe.

Sounds slightly on the tabasco side as PG Wodehouse would have said....

Perhaps you should write a book about your experiences,,, a best seller would bring in the shekels!

It is certainly worth your while to check on making voluntary contributions so as to maximise state pension entitlement.

Are you both making full use of your ISA entitlement?

And a personal pension for each of you?

Yep, less details the better! Mind you, a book is not a bad idea 
This is what I have learnt today and what I'll be cracking on with -

Open a personal pension or SIPP and contribute £2,880 to get £720/year in relief.

Each put £20,000 a year into ISAs.

Possibly make voluntarily make NI payments once online service is up and running, before year end I hope.
Make appointment with local ifa
Figure out what is considered reasonable % costs to having a pension (or sipp?)*

Figure out what on earth a sensible spread of investments means

* side thought, maybe we should look at putting the commercial property into a sipp? Do people do that?

[Deleted User]

Possiblyretired said:

* side thought, maybe we should look at putting the commercial property into a sipp? Do people do that?

Yes, commercial property into a SIPP can be an excellent idea, it might have been better to set it up while the business was still running, but that moment seems to have passed.
As previously mentioned, some professional advice from an accountant could potentially save you tens of thousands