Is it too late to start a pension?

SacredStephan

If you don't already have a Govt Gateway login you should get one each ASAP. You will need a photocard driving licence or a valid passport to do this. It's then very easy to view and check your NI contribution record and your state pension forecast.

eskbanker

Dazed_and_C0nfused said:

GN_TDCI said:

sometime_soon said:

Currently just sitting in standard savings (£200k) which could go into the pension pot and we have isa’s additionally.  

There is an annual limit you can put into pensions. You can backdate, but I am unsure on the exacts on that. Bear in mind that money in a pension is not accessible in the same was an ISA is, so think about fluidity too.


Also, you mentioned holding off income to avoid higher tax brackets, but you can contribute to pensions to offset this. If you are reducing your income through pension contributions, can't you keep yourself in the lower tax brackets?

You can never backdate pension contributions.

Then op may be able to utilise carry forward of unused annual allowance from previous tax years but that only allows additional contributions in the current tax year.

In any case, carrying forward is only possible for those who were a member of a registered pension scheme during each of the tax years in question, but OP apparently wasn't:

sometime_soon said:

No pension at all currently

SVaz

If you are Sole Trader / partnership then you can both contribute UP TO £60k gross,
so £48000 net each
OR,  your whole taxable profits , if that is under £60k.
So say you both have profits of £30k then £24000 x 2 can go into your individual pensions and tax relief of 20% will be added taking it up to £30k x 2. 

Get a pension opened and decide about investments afterwards.  

Given we’re 2/3rds of the way through the tax year then you should have a decent idea of profits come April but be careful not to go overboard with your contributions until the end of March,  then you can fill your boots 😉

sometime_soon

Thanks all. Yes definitely self employed - Sole traders in a partnership but not Ltd etc. Have always remained a 20% tax payer and held off sales to stop going over the last few years . When you come through with absolutely nothing and it all finally works, you become very wary of ever putting money out of your reach but we realise it’s not the best solution now. 

SVaz

Then you can put as much as you possibly can into pensions and live off your substantial savings for a few years.
Have you thought about when you will retire?
How you invest should be dictated by your eventual plans - Annuities / Drawdown,
a mix of the two etc.
No good buying into a ‘Lifestrategy’ or Target retirement type fund if you don’t intend to use annuities for example. 

sometime_soon

Thanks guys. I think we had already reached the do it conclusion but just inherently hold back as it’s been a difficult journey! Had already looked at HL website for pensions as a complete novice so now to spend more evenings looking at all the terminology and types! 

MallyGirl

HL is one of the more expensive DIY SIPPs but it does charge on a percentage of funds held so it starts low in fees if you start low in contributions. Plenty on their website to read - as well as on here

xylophone

https://www.moneyhelper.org.uk/en/pensions-and-retirement/pensions-basics/pensions-for-self-employed-people

Examples

https://www.standardlife.co.uk/pensions/self-employed-pension?gad_source=1&gad_campaignid=20955888715&gbraid=0AAAAAoLz6O9NqruKLHpyG3DcKDUfTxPei&gclid=CjwKCAiAlfvIBhA6EiwAcErpyTq-kNcbBm9U5_eEtabv9RQGGDkTxHdqE65nUiKoOQdFdQ_nCvgA4xoC1fgQAvD_BwE

https://www.aviva.co.uk/retirement/aviva-pension/knowledge-centre/self-employed-pension/

https://www.legalandgeneral.com/retirement/pensions/guides/self-employed-pension/

https://www.hl.co.uk/accounts/partners/sipp?theSource=PCGSG&Override=1&adg=G+GD&gad_source=1&gad_campaignid=67301557&gbraid=0AAAAADwZS09IK0aREKFugELKC-4dQflOW&gclid=CjwKCAiAlfvIBhA6EiwAcErpyTGvuUv_B_w2QOYVzoCgRhFmD_Vzou99Iq-Lyfj9dpq0X-AOIlGDAhoC6DAQAvD_BwE


If advice required you might try https://adviserbook.co.uk/

Tick "confirmed independent" and other options required.

sometime_soon

Thankyou, yes I am mindful I now need to look at fees and types. Initially their name popped up more often along with Avivia I believe. But I was just looking for an option that as we are so inexperienced on these matters, that self choice options would be a barrier as opposed to “ready made” . 

Grumpy_chap

sometime_soon said:

Have always remained a 20% tax payer and held off sales to stop going over the last few years 

So, you did less work to avoid some of the work being taxed at 40%?
That is a bit short-sighted.
Plus, if you are able to take extra work, that money can be paid into your newly started pensions so you can gain the savings without even feeling the short term financial impact.