If you’re a sahm

[Relentlessness]

How do you pay into/sort a pension?

I had Dd lateish in life, due to infertility (40 years old when I had her)
I’m now a Sahm after working all my life, full time. I’ve had one year not working/contributing/paying into a pension and feel a bit uneasy about it. I know I had all my previous years, but I still sorry.
I’m probably going to sah until Dd goes to school at 5/6 ( we’re in another country, they start at that age)

What should I be doing pension wise, setting up my own and paying into it from our family money each month? Or will I be ok as I’ll be back paying into it in a few years.

*Worry, not sorry

I'd say it really depends on the pension facilities available in the country you are in, it is hard to advise without knowing the specifics. You might be accruing decent state pension contributions in line with your pre-maternity salary under that country rules, or there might be a sweet tax deduction for private self-invested pensions for parents - or none at all. Really, you need to talk to someone who knows the local specifics.

Are you in the U.K.?

I’m not in the U.K. and not paying any contributions in at the moment

I was advised to set up a standing order (that increased in line with inflation) into an ISA Stocks and Shares. Therefore the money was accessible if necessary. That was to try to offset the lack of company pension during that time.

The one thing I was told was to definitely NOT do nothing!

£ comes from joint account as me being at home benefits all of us and it's unfair for my future to be penalized because of that. Oh supporting these "pension contributions " was his part of supporting our family set up, whilst mine was becoming financially dependent on him and taking a future hit in terms of career pay and progression.

In the UK, you will be eligible for credits towards pension as long as you are in receipt of child benefit. So I wouldn't worry about that.

@Lancrelady80 I’m not in the U.K.

So you pay a set amount into an Isa each month? If I was in the U.K. I’d be fine about it, but I have literally nothing going anywhere for me at the moment and I don’t like it!

As I say, I do have all my previous years contributions but I still don’t want to do nothing.

I am a sahm, I have been for 8 years now. Every month we put money into an ISA in my sole name as a savings pot/pension for me if and when I ever need it. Obviously we hope this will go towards our joint life when we retire, but it could also be used solely for me if DH and I split. We pay in the same amount as goes into his pension.

Sorry that was a name change for another post where I didn’t want to be identified (still me 😅)

*Someone else’s post I was about to post on

You most definitely want to be doing something. Would be a private pension were you in the UK I guess. 5 years is a huge amount to loose. Go see an FA and do a bit of research.

@Whoopsies

I am a sahm, I have been for 8 years now. Every month we put money into an ISA in my sole name as a savings pot/pension for me if and when I ever need it. Obviously we hope this will go towards our joint life when we retire, but it could also be used solely for me if DH and I split. We pay in the same amount as goes into his pension.

You need to put it into a pension, not at ISA. An ISA won't give you the tax relief thar your husband will be getting on his contributions.

In an ISA all you’ll ever be able to do it drawdown. You need a pension to be able to give yourself an income.

I didn't have any pension at all when and before I was a sahm.
Now I have a pitiful work pension, 8 years I think until state pension qualifies? Then an sipp I set up.
I've not been able to pay regularly into it.
I can't worry about it, there is nothing I can do with my situation.

Masking, will that poster ever be able to to achieve an income though at this stage?
25% tax isn't it on withdrawal out of a sipp?

No charges on an isa?

I've got a more in my isa than my sipp.

You can get get an income from the an isa as well.

If you don't pay in for 5 or 6 years you're not just missing out on the contributions but all the growth you should have had on them in that time.

@Naughtynovembertree

Masking, will that poster ever be able to to achieve an income though at this stage? 25% tax isn't it on withdrawal out of a sipp?

No charges on an isa?

I've got a more in my isa than my sipp.

You can get get an income from the an isa as well.

I also pay more into my Isa and forgive my ignorance as I’m no pension expert but aren’t pensions taxed on withdrawal (which would surely offset some of the tax relief), and looking at historical rates of interest isas such as the S&P 500 have performed much better than pensions generally.

Or am I missing something and should be paying more into a pension?

@Sweetchocolatecandy an ISA or pension is just a different wrapper for your money. Money in either wrapper could potentially be invested in the same fund or shares. Though that depends on the selection the pension or ISA provider offers.

Anyone in the U.K. I highly recommend the Meaningful Money podcasts/videos/books

My husband has a limited company so I'm technically an "employee" of his business and so while I haven't properly worked in five years (I do actually do a bit of work for his company but it very very minimal) I've been paying taxes/pension contributions all along and it also means I don't have a gap on my cv. Win win.

@Naughtynovembertree yes ISA withdrawals are tax free, though you don’t get the tax back (+ growth) in the first place. But you can access ISAs more flexibly which may be important.

Tax from pensions depends on a lot of factors, including how much income you draw down or earn in that year - if not much you may not be taxed at all. There are also tax free lump sums you can take, but it gets vv complicated. There is a govt funded advice organisation you can go to for no cost advice around the ins and outs of accessing your pension.