Where to start...

Flawedflamingo

Hello, I wonder if anyone can spare the time to read this and give me some advice please?

I am a 52 year old woman and have spent the majority of the last 23 years caring for my family. I have worked throughout but for myself (Avon type selling) and part time as a TA in a school for 3/4 years. I have 2 very small work pensions from before my children and another that I paid into whilst working at school. For the last few years I have been establishing and running a business around my family and earn under £10,000. I have been paying my national insurance each year. I am married, my husband has a pension and we have paid off our mortgage. We have 2 children, both at University who we are helping financially.

I am not currently paying into a pension and feel very worried about this. I won't have a lot to put in each month but do have some savings that I could put in and would like to start making regular payments. I am completely overwhelmed by the different pensions and don't know who to ask for independent advice. I also realise that I am very late to start but hope that starting now will be of some benefit.

If anyone can give my any guidance I would be grateful

Thank you

MallyGirl

if you are happy to raid the savings then you can contribute up to your earned income gross to a pension and get tax relief even if you haven't paid income tax on it. That is likely to be worth doing. Also you should check your state pension forecast to see if there are gaps you could fill.

Albermarle

When you were working at the school, did you pay into a pension linked with the employer, or into a personal one you set up your self?

Also do you know the details/values of the two other small work pensions?

It maybe you can just start contributing to one of these if they are suitable. Or if you start a new pension ( not as scary as you think) it could be a good idea to transfer these older ones into the new one. Depending on the details.

Flawedflamingo

Thank you @MallyGirl I am happy to use my savings but am unsure what my 'earned income gross is'. Would that mean starting a new pension?

I don't think there are any gaps in my national insurance contributions, is that what you mean?

Thank you for your time

Albermarle

https://forums.moneysavingexpert.com/discussion/comment/81972239#Comment_81972239

The state pension is a separate issue.

If you earn £10K that is your gross earned income. If you opened a new pension, you could add £8K to it and £2K tax relief would be added to it ( the fact that you are not paying tax is not relevant) .

The source of the £8K is also irrelevant- the fact you are earning £10K means you can add it from savings if you want, and get tax relief.

Flawedflamingo

Thank you @Albermarle It is a local government pension I have from school and yes I do have the details of the other pensions. Did you mean what are the details or do I know them? To be honest I didn't know it could be an option to start contributing to an existing pension. How would I know if they were suitable?

Thank you

Marcon

https://forums.moneysavingexpert.com/discussion/comment/81972252#Comment_81972252

If these are old 'occupational' schemes (which in broad terms means they were only available to employees of a particular employer or group of employers), then it's highly unlikely you can contribute to them once you've left the employment concerned. You certainly can't contribute to the LGPS once you've left.

Have a look at https://www.moneyhelper.org.uk/en/pensions-and-retirement/pensions-basics and do some basic reading, in small chunks and with a wet towel round your head and favourite tipple to hand. Don't try to read everything in one go or you'll simply increase your own sense of utter confusion and bewilderment - it's a lot to take in.

Flawedflamingo

Thank you @Marcon I'll take a look at that.

MallyGirl

https://forums.moneysavingexpert.com/discussion/comment/81972239#Comment_81972239

yes I was referring to checking whether you could increase your state pension by filling empty/incomplete years. This is separate from your question about starting to contribute to a new pension but is related if you don't have sufficient savings to do both. The return on investment with buying extra years to increase your pension is very good.

Earned income for a self employed person is usually profit (as opposed to turnover if you have costs for doing business). Pension contributions are always thought of as gross which includes the tax relief that will be added. @Albermarle has already covered the calculation for that based on you earning £10k so you would just adjust to your actual figure. You have lost the option to contribute pension for previous tax years but you can do this moving forward.

Brie

I also suggest that you gather in all the info on your situation currently and put it all on a spreadsheet. Something that you can add to as you learn more.

So your old employer schemes - employer name, administrators contact details, your reference number, what type of scheme (defined benefit or defined contribution- hopefully all DB!). Add also how much they say your scheme is worth or how much they would currently pay you annually. Then add in the state pension too. I found doing this very reassuring to know how much I had actually built up over the years but also where I might need to plug in some holes.

And don't forget it doesn't need to be your savings that go into your new pension when you get it. Your husband can (should) make some money available to ensure your financial well being after your years of dealing with all the family care.

LHW99

For the last few years I have been establishing and running a business around my family and earn under £10,000.

Does this mean that you are no longer working for a school, but are only self-employed now in your own business? If so, it is not the gross turnover, but your profits before tax that count for pension contributions.

Wilst your pension situation appears low (and can always be improved, even at 52), have you considered the overall household income when you and your husband are both retired? It is good if you have enough pension in your own right to use your personal allowance, but at least as important IMO is working out what each of you would have to live on after one passes.

If you are earning less than your personal allowance, could you pass some over to your husband, which could free some of his income, perhaps allowing him to make payments into a pension for you (or giving you a small amount for you to pay in?). https://www.moneysavingexpert.com/family/marriage-tax-allowance/