Where to start ?

ladybelle

I am a newly single woman whose husband walked out last September leaving me in a total mess. I am likely to lose the house at some point, or if I manage to somehow hang onto it, if a Court makes him pay the mortgage I will lose my right to his Civil Service pension.

I have no pension of my own. I am 45. Is there any recommended scheme where I can save and have more money when I retire. I have no idea how any of these things work, and I have no money to be able to pay a financial advisor. I could only afford maybe £20 a month maximum. Is that going to make anything worthwhile in 20 years ?

I only work part time due to a disability, when I started work many years ago I was offered to join the pension but didnt as I didnt plan to be still working there at retirement age. However with my husband walking out, my whole life has turned upside down, so I could look into whether I could join still, but again I still cannot afford big contributions.

Any advice would be gratefully received.

EdInvestor

In the first instance I suggest you check out your status regarding the state pension and generally educate yourself about your entitlement in that area. You need to know that, so as to come to a view about the house, vs a share of his pension in the divorce negotiations..

https://www.thepensionservice.gov.uk.

If you have very little money to spare you would be better to open a cash ISA and get some emergency savings together right now, rather than lock it it into a pension where you can't get at it if you need it.

ladybelle

EdInvestor wrote: »

In the first instance I suggest you check out your status regarding the state pension and generally educate yourself about your entitlement in that area. You need to know that, so as to come to a view about the house, vs a share of his pension in the divorce negotiations..

www.thepensionservice.gov.uk.

If you have very little money to spare you would be better to open a cash ISA and get some emergency savings together right now, rather than lock it it into a pension where you can't get at it if you need it.

It wont let me do a check because I retire later than 2010 ?? I wont have much there though because I have never worked full time. I will have some HRP contributions and a few contributions, and when we divorce, I have been led to understand I can use my husband's contributions to make mine a full one, so I assume I would get a full state single person's pension .... but clearly that is not a lot to live on.
I have some money put aside now which is for my emergency essentials now. While I like the idea of having money to always be able to draw on I also wanted to try and have some income in as a pension, or is that what is too late now based on what my contribution would be ?

EdInvestor

Sounds like you will get a full basic state pension based on your husband's conts. So the next thing to check is if you can join the company pension - pay in as much as they will match, to get all the free money.

It's unlikely to be worth saving in a personal pension as the small amounts you could put it would probably end up just replacing pension credit benefits you would get anyway - or close to it.But with money from the employer there's a chance of a reasonable pension if you contribute for 20 years.

ladybelle

EdInvestor wrote: »

Sounds like you will get a full basic state pension based on your husband's conts. So the next thing to check is if you can join the company pension - pay in as much as they will match, to get all the free money.

It's unlikely to be worth saving in a personal pension as the small amounts you could put it would probably end up just replacing pension credit benefits you would get anyway - or close to it.But with money from the employer there's a chance of a reasonable pension if you contribute for 20 years.

Well what I did find out from the pension site to my horror is that it is actually 66 when I reach state retirement age !!! I didnt even want to work until 60 and now I have to work til 66 !!!! I never intended to stay where I am working as it is a horrid job really, 5 am starts in a local start. I dont know if I can face it for 21 years. How much do you put into pension schemes ? Is there a set amount or is it my choice ?

dunstonh

I didnt even want to work until 60 and now I have to work til 66

You dont have to work. That is a choice. Sometimes a choice that you have little control over. i.e. you need to pay the bills but if you save up enough money and can afford to retire early, then you can. It is then your choice whether you save or not.

5 am starts

ouch.

How much do you put into pension schemes ? Is there a set amount or is it my choice ?

its your choice. The more you put in, the more you get back.

As a very rough guide, if you want to have an income of £10,000 a year in 20 years time, then you need to be looking to build a pot of £200,000. if you invest at medium risk say and get 7% a year then the monthly amount you need to put aside is £391.85.

I fear that will be too much for you with you looking at £20pm. That would produce a pot of £12,760 which is an income of £638 a year. About £50pm.

It is probably unrealistic and not really suitable for you to be paying into a pension at £20pm. That said, you mention you have an occupational scheme and that may be beneficial. Its a shame you didnt join it all those years ago.

Have you sought legal advice on what you can get as settlement. Your solicitor may push for part of the pension and part of the house.

jamesd

It sounds as though it may be in your best interests to agree to sell the house and get a smaller/cheaper place. This will free up the capital value of the house and that can be used to either give you a lump sum now or to trade off for some of the civil service pension.

You should not agree to any splits or financial terms without discussing the financial implications very carefully - particularly if there is any significant lump sum involved, which should involve an IFA in the planning.

What sort of amount is your current lump sum savings? Thousands? Ten thousand? Fifty thousand? This will help to get some idea of how it should be managed - whether investing instead of using savings accounts like cash ISAs is helpful or not.

You should find out what the work pension plan offers, particularly for matching contributions. You do not need to work at a place until retirement to get its pension. If you leave before then you might be able to take early retirement depending on the company scheme terms but if not, the pension pot remains there growing with inflation until you are allowed to retire under the scheme rules, then you get the pension. It's commonplace to have several different work pensions accumulated from different jobs. So regardless of how long you plan to work there, if they offer to match contributions you should try to pay whatever it takes to get the most they will match.

ladybelle

dunstonh wrote: »

You dont have to work. That is a choice. Sometimes a choice that you have little control over. i.e. you need to pay the bills but if you save up enough money and can afford to retire early, then you can. It is then your choice whether you save or not.



ouch.



its your choice. The more you put in, the more you get back.

As a very rough guide, if you want to have an income of £10,000 a year in 20 years time, then you need to be looking to build a pot of £200,000. if you invest at medium risk say and get 7% a year then the monthly amount you need to put aside is £391.85.

I fear that will be too much for you with you looking at £20pm. That would produce a pot of £12,760 which is an income of £638 a year. About £50pm.

It is probably unrealistic and not really suitable for you to be paying into a pension at £20pm. That said, you mention you have an occupational scheme and that may be beneficial. Its a shame you didnt join it all those years ago.

Have you sought legal advice on what you can get as settlement. Your solicitor may push for part of the pension and part of the house.

Firstly, I will have to work as my husband has just left me so I will have no way of having any income or paying the bills unless I continue to work. I only ever worked part time a few hours a week as he was on a good salary and has an excellent civil service pension. There was never a need for me to join the pension scheme working so few hours and I was happily married and assumed would be forever and would live on his pension.
His pension *may* equate to equity in the house, but we have a big mortgage with over 20 years left to run and most Court's would order it sold. I dont want it sold, I cant work full time due to disability, and cant afford to pay the mortgage or rent privately. I am hoping to come to some amicable agreement whereby he will agree to continue paying the mortgage and he keeps the pension. That's all in the future, but for now, I am assuming I will lose any income past retirement hence my question.
I dont even live off an income of £10,000 now, so am not expecting to live off that in the future, I am just hoping to be able to survive.

ladybelle

jamesd wrote: »

It sounds as though it may be in your best interests to agree to sell the house and get a smaller/cheaper place. This will free up the capital value of the house and that can be used to either give you a lump sum now or to trade off for some of the civil service pension.

You should not agree to any splits or financial terms without discussing the financial implications very carefully - particularly if there is any significant lump sum involved, which should involve an IFA in the planning.

What sort of amount is your current lump sum savings? Thousands? Ten thousand? Fifty thousand? This will help to get some idea of how it should be managed - whether investing instead of using savings accounts like cash ISAs is helpful or not.

You should find out what the work pension plan offers, particularly for matching contributions. You do not need to work at a place until retirement to get its pension. If you leave before then you might be able to take early retirement depending on the company scheme terms but if not, the pension pot remains there growing with inflation until you are allowed to retire under the scheme rules, then you get the pension. It's commonplace to have several different work pensions accumulated from different jobs. So regardless of how long you plan to work there, if they offer to match contributions you should try to pay whatever it takes to get the most they will match.

I cant possibly sell the house as I could never afford any mortgage or private rental on my own income. I have a disability and unable to work full time or travel far unaccompanied. If we sold the house I would end up with £35,000 and that's all - that wouldnt buy me anything, or provide enough of any money to do anything with. I only earn £450 a month.
My little bit of money is only £1500 and that is my emergency money for anything essential, I dont really want to tie that up anywhere in case I need it.

dunstonh

There was never a need for me to join the pension scheme working so few hours and I was happily married and assumed would be forever and would live on his pension.

Unfortunately, that was a bad decision. All that free money has been wasted.

I dont even live off an income of £10,000 now, so am not expecting to live off that in the future, I am just hoping to be able to survive.

But £20pm is only going to give you £50pm so that level of contribution is no good either and you cannot afford more.

I sympathise with your situation but I fear that unless your husband agrees to pay the mortgage and you keep the property at the end there is little hope of you not being forced to move. If you do get that, then equity release may be required in retirement to help you live. So, there are some longer term solutions.

You should make sure your solicitor is aware of your situation. Do you have children? if you do then you should be able to demand quite a lot. If you dont, then it will be harder for you to make such high demands.

tanith

ladybelle I have been reading your thread with sympathy.. did you and your husband not have any 'joint' savings that you could claim a share of? also have you looked at benefits that you may be eligible for because of your disability? just some thoughts... I will keep reading all the good advice you are getting here...