Very small pension late 30s

[Goldcat89]

Looking for some advice, and hopefully a bit of hope. I'm in my late 30s and only have a very small pension. I do have disposable income to start paying in - around £500 a month I think. Will this ever add up to anything? Is it worth doing a lump sum payment of £10k or so?

I work in short term contracts which is how I've ended up in this situation, plus COVID where I had to stop working for 2 years to focus on homeschooling.

How small?

The answer largely depends on your wider financial position, so a few more details would be helpful!

Do you have much debt? What's your income? Are you self employ, then, is this a private pension you pay into only yourself (i.e. no employer contributions)?

Generally, paying into a pension is a good, tax efficient thing to do, if you can live without the income now, but there's a lot of variables to consider.

I have about £10k in the moment. No debts aside our mortgage (around £1k a month).

I take home £1.1k a month, DH has around £4.5k after tax. He has a decent amount in his pension. I work as a teaching assistant, on 11 month contracts so am not sure if I get much in terms of my employer paying in. I'm planning on setting up a private pension.

Also, any advice on how to balance general savings (for DC) against putting into a pension?

What is your current pension scheme, do you know any details? Who is it with, if you are a teaching assistant, are you on the local government pension scheme, or is this a defined contribution scheme?

Yes! You can make a big difference with £500 pm

You and your DH should be planning as a team for pensions and DC savings. Is the £10K family savings and do you have anything else e.g. emergency fund?

In general, my advice would be that if you don’t save for your own retirement your DC will not thank you for making them worry about you in your impoverished old age! So definitely prioritise saving for your own future before you save for theirs, if you can’t afford to do both.

Agree with no squirrels..get your ball rolling firstly.
However,you can open up juniors ISA at least then it's there'to pay into when you can?

You could also set up a sipp for your DC, if it's something always there that would also encourage them to pay into it when start work and time Is massively on their side.

As a ta would it not be local government pension?

If you’re still in your late 30s you’re in time to open a lifetime ISA which can be used for either a pension or a house deposit. You can put in up to £4k a year until you’re 50 and the government tops it up by 25% so if you put in £4k you get an extra £1k. There’s a penalty for withdrawing it for any other reason. You may as well open one while you still can, you have to be under 40 to do so.

As others have suggested, you should be eligible for the local government scheme. If this is available to you then it is one of the best going so definitely check!

Is the 10k in a SIPP or an employer's scheme