No pension at (nearly) 50

f0xh0les

Hi all, looking for advice please.

I am 50 this year and need to think  about  a pension.  Due to the nature of my work (agency)  before having kids, I never qualified for a  work based pension.  I have plenty of time to qualify for the state pension (whatever it looks like in 17ish  years), as I am only 8 years short.

I am currently working very part time, and earned sub £5k last year, but it is a start, and it will improve now the kids are older and I can work more hours. 

I am married - he gets  my +10% tax free allowance,  he earns just over £60k

So, my question is:   what is the best kind of pension for me to be paying in to and how much should I look to be paying in?

I know I need to get a wriggle on and make a decision before 5th April to get this financial year's 'free money top up' but I would really like a little advice before jumping in to it

Thanks in advance

FH

Marcon

f0xh0les said:

Hi all, looking for advice please.

I am 50 this year and need to think  about  a pension.  Due to the nature of my work (agency)  before having kids, I never qualified for a  work based pension.  I have plenty of time to qualify for the state pension (whatever it looks like in 17ish  years), as I am only 8 years short.

I am currently working very part time, and earned sub £5k last year, but it is a start, and it will improve now the kids are older and I can work more hours. 

I am married - he gets  my +10% tax free allowance,  he earns just over £60k

So, my question is:   what is the best kind of pension for me to be paying in to and how much should I look to be paying in?

I know I need to get a wriggle on and make a decision before 5th April to get this financial year's 'free money top up' but I would really like a little advice before jumping in to it

Thanks in advance

FH

You don't just need to make a decision - you need to ensure the payment has been made to the provider by this Friday.

See https://www.moneysavingexpert.com/savings/cheap-sipps/ for a possible starter.

How much to contribute? How much can you afford? You are limited to tax-relievable gross pension contributions of £3,600; or your earnings of £5K if those are in the current tax year. You would pay in 80% (ie £2,880; or  £4K, being 80% of your gross earnings) and the pension provider will add basic rate tax relief, even if you haven't paid tax in the first place.

Your earnings are too low to require your employer (the agency) to auto-enrol you, but you can ask to join their pension scheme. If you do, they must enrol you and pay contributions if you pay your share - but I wouldn't count on that happening by the end of this week!

Have you actually checked your state pension forecast? https://www.gov.uk/check-state-pension

MX5huggy

How are your finances organised with your husband? Because it’s better if he makes pension contributions to his own pension (could be a separate pension, ear marked for you, but in his name) because he receives 40% tax relief on pension contributions. 

We do everything joint, except where not allowed, any decisions are based on what’s best for the whole of us. 

f0xh0les

Our finances are pretty much separate, he has a good pension, I stayed at home for 18 years and  4 kids and cared for an elderly relative.
I paid off the mortgage last year with an inheritance, maxed out my PBs (for fun)  and my ISA allowance (for an illusion of sensibility) and realistically I could still shunt £250/£500 a month in pension contributions plus whatever else comes my way. 
Got an email from my current employer at Christmas offering me the chance to join their pension scheme as I got paid around £2k in one month last September which meant they were obliged to offer it, I said yes but honestly it will probably come to nothing as I wouldn't earn enough with them ( it is seasonal work) but it was free.  But if I ever do earn above the threshold with them, it is there and set up now.  I think that is how it works. 
And yes, the 8 years of NI contributions outstanding was confirmed by the govt hotline. 

xylophone

it is there and set up now.

Can you make the maximum personal  tax relievable contribution to this pension by Friday?

Marcon

f0xh0les said:

realistically I could still shunt £250/£500 a month in pension contributions plus whatever else comes my way. 

Only if you have enough earned income to support contributions at that level, or you don't get tax relief.

f0xh0les said:

Got an email from my current employer at Christmas offering me the chance to join their pension scheme as I got paid around £2k in one month last September which meant they were obliged to offer it, I said yes but honestly it will probably come to nothing as I wouldn't earn enough with them ( it is seasonal work) but it was free.  But if I ever do earn above the threshold with them, it is there and set up now.  I think that is how it works. 

So why not use it? Time isn't exactly on your side to contribute in the current tax year!

xylophone

Gross relevant earnings in this tax year?

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

Did you make any contribution to the workplace scheme?



Do you have on line access?

Which scheme is it?

dunstonh

Our finances are pretty much separate

The consequence of that is that you need to accept inefficiencies and sub-optimal outcomes.    Have you and your husband discussed the pros and cons of this?

f0xh0les

xylophone said:

it is there and set up now.

Can you make the maximum personal  tax relievable contribution to this pension by Friday?

No, it is a small family firm, the accounts person works one day a week, plus it is the school holidays so she probably won't be there, and it only sees to be fundable through payroll.

It is the Creative Pension Trust.

f0xh0les

dunstonh said:

Our finances are pretty much separate

The consequence of that is that you need to accept inefficiencies and sub-optimal outcomes.    Have you and your husband discussed the pros and cons of this?

Yes, I feel that should he get kicked in the head by a horse, or have a mid-life nervous breakdown and trade me in for a blonder model, then I will keep my £85k in my bank account, and sue him for half his pension.  Well, it is my emergency plan.  He agreed it was wise. Sub-optimal, but wise.

LHW99

f0xh0les said:

dunstonh said:

Our finances are pretty much separate

The consequence of that is that you need to accept inefficiencies and sub-optimal outcomes.    Have you and your husband discussed the pros and cons of this?

Yes, I feel that should he get kicked in the head by a horse, or have a mid-life nervous breakdown and trade me in for a blonder model, then I will keep my £85k in my bank account, and sue him for half his pension.  Well, it is my emergency plan.  He agreed it was wise. Sub-optimal, but wise.

Better to think about what happens if either of you doesn't make old bones.

Work out what each ofyou would have to live on in that case - if he has been the first to go, you won't be able to sue him, and if (because there was no planning) he used all his DC money for a single-life level annuity (because it pays the most) all that would die with him.

Apart from anything else, working together on pensions means ensuring you use both your personal allowances effectively when you retire.