NEST top up? Low income

Cazzledazzle · 17 June 2019 at 3:58PM

I am looking at my future pension situation which is very low due to taking a long time out looking after my three children and then becoming a single parent.

I am 47 now. I will get the state pension of £8797 p.a.
I will also get two small teacher pensions of just under £4000 p.a. These are due to me working as a teacher for 6 years and a pension sharing agreement with my ex husband after the divorce.

I am therefore due a small pension of around £16000 including the state pension. I am obviously keen to boost this in anyway I can.

I work part time on minimum wage.

My current employer is using the NEST pension scheme. I am thinking of topping this up through direct debit from my bank account of a £100 a month, but have seen some bad reviews of NEST in the past. Is it worth me doing this? Should I go elsewhere? What options are there for pension accruement for low income people such as myself?

Marcon · 17 June 2019 at 4:42PM

You'll always see bad reviews - people are far quicker to criticise than they are to praise.

NEST was set up in the expectation most of its members would be low income individuals. You could investigate a stakeholder pension scheme if you want some investment choice, but it's hard to see why you would want to do so when you already have savings with NEST - it would be two pensions to keep track of rather than just one.

MallyGirl · 17 June 2019 at 4:45PM

NEST do charge 1.8% of every contribution as a fee - there may be cheaper ways of building up a pot.

Albermarle · 17 June 2019 at 4:59PM

NEST do charge 1.8% of every contribution as a fee - there may be cheaper ways of building up a pot.

Yes but their ongoing annual charge is low, so over a period of years it will even out the initial charge .

bank account of a £100 a month,

Putting the £100 in is the most important point and perhaps do not worry too much about whether it is Nest or not .

crv1963 · 18 June 2019 at 9:27AM

My wife is in her employer NEST scheme, we save £200pm into a SIPP with the intent of adding ad hoc payments to the SIPP as we can, the plan is then to transfer the NEST monies into the SIPP on retirement.

The SIPP will then be drawn down at an annual rate equal to her forecast SP, plus a drawn down on another DC pension she has to give her an annual income just below the point of paying income tax. The SIPP will be exhausted just as her SP starts payment, so she will continue with an annual income just below the point of paying income tax.

So it may be useful to identify different pots for different stages of retirement as we have?

Cazzledazzle · 18 June 2019 at 4:36PM

Do you mind me asking why you aren't just paying into the NEST? Which SIPP did you chose and why? I've been looking at all the different SIPPs and it is hard for me to work out which one is better than the other and they seem to be aimed at people who have a lot of money to invest.

Marcon · 18 June 2019 at 6:26PM

Cazzledazzle wrote: »

Do you mind me asking why you aren't just paying into the NEST? Which SIPP did you chose and why? I've been looking at all the different SIPPs and it is hard for me to work out which one is better than the other and they seem to be aimed at people who have a lot of money to invest.

SIPPs are a lot cheaper than they used to be, but if you have only modest amounts to invest and aren't keen on having to take regular investment decisions, they aren't the one size fits all solution many people would try to have you believe.

justme111 · 18 June 2019 at 6:51PM

Is it 4k each pension? So you will have 16 k ? By how much do you want to increase it and what is it " small" compared to ? Do you realise it is twice as much as majority of people receive, ie state pension only ? What do you spend now after deducting children expenses , taxes , mortgage if you pay it ?

Cazzledazzle · 18 June 2019 at 7:29PM

It is 4k for two teacher pensions and then the 8k for the state pension, so 16k in total. i have paid off my mortgage

Kentish_Dave · 18 June 2019 at 8:47PM

You have 20+ years to deal with this, so alongside looking at the investment side you should also be looking at what you can do to increase your income. Two decades is enough time to join a profession and rise far up the ranks, or train as a plumber, spend a decade perfecting the trade, and saving, and then opening your own company and having others do the work for you.

You can do private tuition, set up your own school, start an import-export business, learn a language and work as a translator, the choices are nearly endless.

crv1963 · 19 June 2019 at 4:10AM

Cazzledazzle wrote: »

Do you mind me asking why you aren't just paying into the NEST? Which SIPP did you chose and why? I've been looking at all the different SIPPs and it is hard for me to work out which one is better than the other and they seem to be aimed at people who have a lot of money to invest.

We chose not to add to the NEST as we wanted to create a separate pot that we could monitor and wanted to use VLS60 fund. We chose HL as the provider for low but not the lowest cost, liked the easy to use website.

NEST top up? Low income

Comments

Categories

Get our FREE Weekly email full of deals & guides - and it’s spam-free