Are you ever too old to start a pension?

OAP362

I am 62. Is it too late to start my own personal pension?  What are your thoughts on cheaper robot-administrated SIPPs?

Marcon

OAP362 said:

I am 62. Is it too late to start my own personal pension?  

Of course not. You can make tax-relievable contributions until age 75. Even if you aren't earning/paying tax you can pay in £2,880 and get a tax top added by the pension provider, giving you £3,600 in your 'pot'.

OAP362 said:

What are your thoughts on cheaper robot-administrated SIPPs?

A robo SIPP is surely a contradiction in terms. Why not have a non-SIPP personal pension, or a stakeholder pension?

tacpot12

There is an age when it is not sensible to start a pension, and that age is usually that point at which you have no excess income to contribute to a penion (and no prospect of gaining an inheritance - not that the current rules allow substantial one-off contributions to pensions).

Albermarle

OAP362 said:

I am 62. Is it too late to start my own personal pension?  What are your thoughts on cheaper robot-administrated SIPPs?

Robo providers are not cheap, but they do point you in the right direction if you have no idea what to do.

Roger175

No, at 62 you are certainly not too old to start a pension and I would suggest a SIPP might just fit the bill perfectly.

My wife took early retirement in summer 2022 aged 58. Then before 05 April 2023, we opened a SIPP and put in the maximum we could (based on he relevant earnings for the year 22/23), then in April 23, we bunged in another £2,880 (by then she had no relevant earnings). 25% tax relief was then added to the whole amount and because we wanted zero risk, we simply put the money into a Short Term Money Market investment which payed just short of 5%. My wife has now just started drawing a small DB pension at age 60 and because she had the opportunity in this tax year to draw the SIPP tax free, we have recently cashed it in (using the small pots rule, but this wasn't strictly necessary). This resulted in a totally tax free withdrawal, but having made 25% on the tax relief and a steady 5% on the investment - thank you very much HMRC

xylophone

I am 62. Is it too late to start my own personal pension?

Have you checked your state pension forecast?

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

What exactly does it say at "estimate to 5/4/23"?

Are you already in receipt of a pension?

If so, what kind?

Are you still in receipt of "relevant earnings"?

https://www.gov.uk/hmrc-internal-manuals/pensions-tax-manual/ptm044100

Are you currently contributing to a pension?

dunstonh

Are you ever too old to start a pension?

Yes.  Age 75 onwards.

I am 62. Is it too late to start my own personal pension? 

No.  you still have another 13 years of tax efficiency to utilise on contributions and a lifetime of tax efficiency (no CGT or dividend tax and outside of your estate).

What are your thoughts on cheaper robot-administrated SIPPs?

a) I don't believe there are any Robo SIPPs as that would be a contradiction.  SIPPs have around 30,000 different investment options.   A robo typically has 5-15 and has virtually no SIPP functionality.  They are closer to PPP than SIPP
b) What makes you think they are cheaper?   Cheaper than SJP perhaps but many are more expensive than using an IFA on an ongoing basis.

They are fine for lazy investors with small amounts but in most cases they will not be the most optimal.

atush

not before age 75. 

my OH didnt start his until age 40.  he just retired at 66 with well over a million in pensions,