Pension for SAHM

[MrsAmaretto]

I’ve recently taken redundancy & need to sort out a private pension. Previously I was 15years in a Local Govt Pension. I don’t intend to actively look for a new job for 12months & then any work would be part time. I would join a company pension too. I’m 39. Before I took redundancy my plan was to pay AVCs instead of childcare vouchers, when my youngest started school in August 2018

I’ve made an appointment with a local IFA but is there anything I should be aware of/prepare in advance? Any questions I should ask? I’m totally in the dark about pensions - I joined the local govt one as it was easy!

Hey! I think you’ll be absolutely fine - don’t stress. Here’s a few things I’ve picked up along the way...

Ensure your IFA is truly independent / whole-of-market, so not biased in any way.

Ask your IFA to give you a pension review now: i.e. how much is your current pension worth, and what income would it give you in retirement.

Your IFA should also discuss your needs in retirement – i.e. how much income you’ll need. They’ll also take into account any savings / other assets, so you can work out the gap between your pension NOW and what you’ll need when you retire.

Then you and the IFA can work out how much you need to save up to deliver that. And so work out how much you need to save up each month, AND the kind of pension fund to go for (what kind of investments, level of risk etc).

My top tip is: don’t delay, as there isn’t much time left. Every month counts when you’re saving for a pension, and every contribution, no matter how small – as every pound gets a generous tax relief of 20% (which is the equivalent to earning 25% interest instantly).

I hope this helps you?

You know you don't need an IFA to start a private pension.

You can opt for diy and some providers will give you the easy route of ready made risk based funds.

I've just started to look at taking out a private pension - did you get any pointers for straight forward easy company's to use?

I think - but you can check - you only get tax relief on pension contributions up to 100% of your earnings so that might be a problem if you are not earning currently.

Thanks for your help - trying this get appointments with an IFA. I’d rather not do this myself - there is too much choice and I need the options narrowed.

Is it just for year until you’re with another pension? An IFA might not make sense as their fees will be too much of a chunk of the money you’re likely to set aside in that year.

Have you considered a Lifetime ISA? You can save up to 4k per tax year and you’ll get a 25% bonus from the government.

And next year, when you’re enrolled in a pension scheme again, you can either let that LISA be or top it up regardless of your pension contributions. The only thing is that it must be started before your 40th birthday.

@clarrylove , the government will top up your contributions even if you are outside tax, up to 3600.
I think I'd go for a lisa too, in this circumstance.