I'm 50, self employed with no pension - ideas please?

[elsanandanna]

It's as the title says.
I am a childminder so my income can vary.
I didn't think I would childmind after my own children started school but here I am 15 years later. I have no idea how time went so quickly.

I have only £3000 in savings. It seems impossible that I got to this age and didn't give it a thought.

I have paid off the mortgage but won't be able to downsize in the future as I'm already in the smallest house ever. And live where property is cheap. No inheritance in the future. No rich husband.

I need to think about myself and quickly.

ISAs pay only about 1%

What should I think about?
Thanks

Sorry I can't be of any help but my partner is 29 self employed and doesn't have a pension so looking for advice also!

Write a budget of expenses so you know how much spare cash you have per week. Tricky I know if your income varies but you need a base

Think about whether you want to get a job eg TA or stay self employed. Think about what you could do to earn extra income eg babysitting in the evenings
Get together an emergency fund of cash purely to find emergencies
Sorry can’t really help on investments but try the money pages on here which may give you some guidance

And well done for thinking about it.

Thanks.

I earn more money as a childminder than a TA would. I make quite a good living as I work hard and work long hours.

I have got enough income to start saving more every month now the mortgage is paid off, it's just a case of where I should put the money.

I'm not in the UK, but a quick google turned this up, which discusses your options:

www.moneyadviceservice.org.uk/en/articles/pensions-for-the-self-employed

Cash ISA may be 1% but a Stocks & Shares ISA invested in a mutual fund may return around 8% average - it's a rollercoaster so you have to be investing for the long term.

You can have a pension, it could be a SIPP or other type. You can have within that tax wrapper various funds.

There’s a thing called a SIPP (self-invested personal pension) which is basically a pot that you pay into as often as you want, and for every £100 you put in it the government adds £25. You can read more about them here: www.moneysavingexpert.com/savings/cheap-sipps/

I’ve got one with Hargreaves Lansdown. When I started I knew nothing at all about pensions and investments so I just chose one of their ready-made portfolios and put in a fixed amount each month. It’s been growing into a nice sum especially with the extra 25% which beats any ISA. There are lots of other providers of course.

The money is locked in until you reach 55 (soon to go up to 57) but after that you can take it out when you want. You don’t have to wait until you reach state pension age.

Have you been paying your NI whilst you have been childminding?

Yes, paid NI contributions.
So I should have a state pension at 67.
I don't live an extravagant life now but I don't want to be professionally frugal as a pensioner.
I'd like an easy retirement.

You are completely right - you need to start thinking about yourself. You say you are 50 and want to retire at 67. That gives you 17 years before you start taking out of your pension pot, and 50yrs before you (potentially) live to 100, so time for any investment to grow via interest and compounding.

Like you said, just start saving, and quickly.

My advice would be - open a SIPP, invest in some funds, save for the long term.

There are loads of articles out at the moment talking about pensions. These ones might be of interest - overarching theme is to just start saving!:

www.fool.co.uk/investing/2019/08/12/how-you-can-double-your-state-pension-for-the-price-of-a-cup-of-coffee-a-day/?source=uhpsithla0000002&lidx=5

www.theguardian.com/money/2019/sep/28/uk-pensions-saving-retirement

www.hl.co.uk/news/articles/the-hidden-danger-facing-cash-isa-savers-and-how-to-fix-it

The SIPP sound like a good plan because the government will top up £75 per month to £100 per month. I have my Teachers Pension for when I get to 60 and state old aged pension but now I pay into a Stakeholder Pension as I am currently a self employed Foster Carer. I pay in £400 per month so government pays in £100 for me so £500 in total. You have still got 17 years left so make the most of it by paying in all you can. When you are old you will not want to be cold and not to be able to afford fuel to heat your home. Sadly we can't rely of government to look after us so we have to be pro active. Anyone who does not have a pension should get one even if they can only afford to put in a few pounds each month to make the government top it up.

SIPP pension seems like a good place to start.

With a 17 year time horizon you should consider putting some of the money in stocks. Your timeline is actually longer than 17 years as you'll be drawing on the money for many years longer.

Is a SIPP better than a Stakeholder?

I'd need someone to manage it for me. I'm clueless. Which is obviously why I have no pension.

As I understand it, SIPPs used to be more expensive than stakeholder pensions and in the past the obvious choice for you would have been a stakeholder pension. But SIPPs have come down a lot in price and the boundaries have blurred so the differences are now pretty minimal. There’s an article with more detail here: inews.co.uk/inews-lifestyle/money/the-difference-between-stakeholder-pensions-and-sipps-514835

Honestly, a SIPP isn’t that scary. You can choose a ready-made package of investments called a fund, or better still choose a few funds, and all your money just goes straight into those and the extra 25% is added automatically a few weeks later. You don’t have to manage the funds - that’s all done by the fund managers. You have to pay fees but they’re tiny compared to the extra 25% you’re getting and it’s all taken out of your account without you having to do anything.

Some people become really expert at it all and do lots of research to find the very best investments with the cheapest fees, but you don’t have to do that. Their pensions might grow a bit faster than yours. But sometimes it’s better to make a decision rather than worrying about making the best decision, and as long as you’re doing something reasonably sensible then you’ll be doing fine.

I found this page good for holding your hand and helping you to choose some funds:
www.hl.co.uk/pensions/sipp/investment-ideas-for-your-sipp/master-portfolios. It asks you about your attitude to risk and how much money you want to add each month, then suggests a combination of funds. From there it’s pretty straightforward to set up a SIPP so money goes automatically from your bank account each month and into the funds that you have chosen. You can do it manually if you want to keep it more flexible.

Completely agree - it’s better to make A decision rather than worrying about making the best decision.

I think a lot of people are frozen-in-headlights by the thought of pensions being daunting and something that needs professional advice. They don't. Yes, a professional financial advisor MIGHT make you more profit. But honestly, just saving some money (esp if in a SIPP where you get tax back from govt) will help you be financially more secure when you retire in the future vs doing nothing. So it's better to just do it!

Plus, let's not forget, even the "experts" get it wrong (HL and Woodford.....)

I still wish we all empowered ourselves - if we had financial groups like we have book groups or chat about make up and skin care recommendations, we would all be better off.

Please just:

• open a SIPP account
• start investing

Loveacuppa, you are so right

I am frozen in the headlights. After 10yrs of sahm, I went back to work 3 years ago (free lance, part time). I have built up no NI (as have only lived in the YK 14yrs, and not worked for 10 of those)

No pension!

At 47 I need to get started pronto

Am worried I’d choose a pension fund that goes bust, and lose my money how likely is that?

Better start some research now!

Re: your worries about them going bust
Read section 11 of this link (the one ScarletAnenome shared) "are sipps safe":
www.moneysavingexpert.com/savings/cheap-sipps/
It explains that if they went bust, your investments would be covered (up to £85k) under the financial compensation scheme.

At 45 yo I got myself a financial advisor who helped me through all this. There were a lot of questions but ultimately we decided that my best option was a pension scheme. I pay in £150 a month and it is slow progress but I feel more confident about retirement now.

www.fool.co.uk/investing/2019/09/29/how-to-save-and-invest-for-retirement-without-the-pain/

ChickenyChick if you were a SAHM and claiming child benefit for children under 12 then your NI was paid for you so you might have a lot more pension than you thought

Scottish Widows are going to send me information about a stakeholder pension.

I'm going to contact Hargreaves Landsdown next.

I figured that if I pay in, for example, £100, then the government tops it up by £20.
So as long as it doesn't go down by more than £20 I'm ok. I haven't lost any real money.

This is probably too simple.

ScarletAnemone, if only...

DH is very principled left wing and refused to claim child benefit, as we did not need it to survive

We don't have pensions and in our 50's but started saving years ago.
Eventually we bought 2 very cheap shells of houses and did them up, they are now let and this will be our pension and then in the kids names before either of us are in care homes.

You should have taken the cb it's nothing to do with your husband.

I wish had done more financial planning years ago.
One minute I was 30 and now I'm 50.
I suspect some sort of time warp.

If anyone is reading this thread, please act now!

I wish I had invested in property too. My income isn't enough on its own or I'm too old to get a meaningful mortgage now to cover buy to let.