Starting pension at 55

Flossthedog

I'm 55 and have no pension worth mentioning waiting for me - a couple of hundreds of pounds per annum.

Is it worth starting to put money into a pension now? Or will I simply lose out on benefits like help with council tax, dental charges etc with the small pension I'm likely to get.

I couldn't put much into a pension anyway - I still have a mortgage with 10 years left on it and teenagers still in school.

Floss

swiss69

It depends on your circumstances. Are you married or single? Does your spouse have pensions if you have one.

I would start by requesting your state pension forecast from the Pensions Dept. You can obtain this by ringing 0845 3000168 and answering a few questions. They will then send you a forecast of likely state pension.

You could qualify for pension credit at retirement but without knowing your details its difficulet to make judgement. If you would qualify then it is unlikely to be of any great benefit doing a pension.

dunstonh

You could find your state pensions take you over the pension credit qualification in which case relying on that could be a disaster for your finances. Facts are important here. Especially knowing what your state pension provision will be.

newcastlebelle

cant get a forecast til the end of the year til systems are updated....I tried last week
am in a similar situation, but slightly younger. will watch this topic with interest

TRUSt_NO_1_2

Is this a wind up ?

Look what is happening to the world.

Keep your assets as accessible as possible...under no circumstances would I consider a pension,especially at 55 !!!!

My opinion.

jamesd

How much do you want to live on in retirement? Say it's 15,000 or more and you're getting more than 20,000 take-home now. Pension investing at 55 can easily be a good idea in that case. Making more, perhaps paying higher rate tax? Even more incentive to use a pension.

Want to live on under 10,000 a year? Making 1,000 or less now take-home? Then you probably need to see the numbers to decide.

In the middle? Depends on what you want to live on, how much money you have after critical essentials and how committed you are to achieving the goal.

One really nice thing about pension investing after 55 is that the 25% tax-free lump sum means that between 25% and 50% of the after tax contributions you make are not locked up at all because you can get them back via the 25% tax-free lump sum whenever you like. Assuming you're using a personal pension, SIPP or similar. Different story for those under 50/55 who have to wait for that age before they can get any of it.

Flossthedog

I finally got a State Pension forecast from the DWP. That's after they sent me forms for some random bloke regarding Child Support, and I wrote and said, no, I want a pension forecast and a nice man phoned and said, "Sorry about that, phone us in September and we'll be able to send you something." *sigh*

Anyroad up, my total weekly State Pension estimated up to 5 April 2016 is £128.89 per week.

In the last illustration I got from Phoenix, my pension from them (illustration only, caveat, caveat, caveat, caveat, caveat) will be £1,255 per annum.

Incidentally, I get £15,000 per annum take home pay, and it's unlikely to go up - if anywhere, it'll be going down. I am married, and my husband earns a bit more than me. However, he's nine years younger than me, so I won't be relying on whatever pension he gets - and his company pension has been converted from a final salary scheme to a money purchase scheme. Also, as I mentioned, there's the fairly large mortgage with ten years left to run and the kids still at school.

So, is it worth me even thinking about putting money in a pension scheme?

EdInvestor

You are well over pension credit level, but under the 10k old age tax allowance so it is worth making extra savings in a pension.But whether they should be in a pension right now, or in an ISA or used to reduce the mortgage is another question.

What interest rate are you paying on your mortgage?

Also, please give more details of the Phoenix pension
Current value
Transfer value
Fund(s) it is invested in
Any guarantees attached (guaranteed investment return,guaranteed annuity rate?if so, details of these).

It may be that it would be worth transferring your existing pension to a plan where it will perform better, meanwhile using any spare money to overpay your mortgage while interest rates are high.

Then later, if (when) interest rates come down, you could switch the extra money from reducing the mortgage into the new better quality pension.

Do you have a cash emergency fund?

jamesd

We need to know more about your husband's situation because it's best in general to evenly balance pension income for a couple because you'll each individually get about 10,000 of income a year tax free. So usually it's best to arrange for state pensions and private/work pensions to reach that for both partners as the first step.

At the moment it looks as though it is worthwhile making pension contributions in your name because it seems that the income would be free of tax, while you'd be getting tax relief to boost the money that you pay in.

shallishanti

Hi. this is my first post, so please be gentle with me:D .
I am a single woman of 52, on just above the minimum wage, paying a minimum pension. I am expecting to receive a total of around £10,000,paid either as a lump sum, or so much per mnth.
I really struggle to pay my pension each month, and could do without the outlay to be honest.
Someone in work has said that I should freeze my pension now, as what little I will receive as a pension, will hinder me fro getting any help from the Government. So really I am struggling now, just to penalise myself when I retire.
Can anyone please advise on that small snippet of info?
Many Thanks in advance.

dunstonh

Hi. this is my first post, so please be gentle with me:D .

When starting a new subject you should start a new thread and not post your questions on somoene elses. Otherwise you get multiple conversations going on in one thread. That makes it hard to follow. Also its not fair on the OP (original poster) as your subject may swamp their questions.

Someone in work has said that I should freeze my pension now, as what little I will receive as a pension, will hinder me fro getting any help from the Government. So really I am struggling now, just to penalise myself when I retire.
Can anyone please advise on that small snippet of info?

Does this person know how much your pension is going to pay?

Pension credit will top up your pension income to £124.05pw. That is £6450 a year. If your earnings are over that then it gets reduced but not on a 1:1 basis. So, small pension contributions can still be beneficial. It really depends on how close you are to that £6450 figure from the state pensions and your personal arrangements.