Pension - help?!

[huggybear]

I need help if possible please, as I know nothing about pensions.

I've been paying into my pension since I turned 22. My husband however has not until he was automatically enrolled last year, the amount he pays is pathetic so we are really looking at trying to get a grip on this.

The info suggests he would get a lump sum at 65, not a yearly income which I don't understand at all. If anyone could advise what we should do that would be great. If he moves to a different pension scheme does that mean he loses the employer contribution? He is 29, we have no idea how much he should be paying in, currently he only pays £70 odd.

If anyone can advise please do! I've tried reading up on it but I'm afraid I don't understand any of it and he's not much better.

I think you are in the overwhelming majority of the population in not really understanding your pension / pension options.

I don't know if This helps ?

That makes me feel a little better... Am starting to panic. Thank you for the link but they only seem to help if you are over 50.

A pension is just a pot of savings with special tax rules. Some of the money paid in gets an extra boost from personal tax relief, some of the money in auto-enrolment has to also be paid in by the employer.

The pot builds up over time until you choose to take benefits out of it. This might be in the form of lump sums, or as a regular withdrawal each month, or you can use the pot to buy an annuity which is a product that will pay a guaranteed income for the rest of your life.

Because annuity rates are rubbish at the moment, and not many people are taking them up because they can make regular withdrawals directly from the pot instead, it makes more sense for pension providers to just illustrate what the capital value of the pot might be at your chosen retirement age (based on various contribution and growth assumptions). You can then use that information to get an estimate of what it might generate as an income in retirement (or ask a financial adviser to help with this), identify any shortfall and think about how to remedy this if needs be. Think about how much you'd need to live on in retirement - both the absolute bare minimum to cover essential bills and then a higher amount that would be realistic but make life more comfortable. Those are your targets.

If he moves employer your husband can either leave that pot where it is or he can move it into his new employer's pension scheme for ease of admin. If he can afford to increase his monthly contributions then it is worth considering, as they will have a much longer time to grow than the same amount put in when he's older.

He’s only 29. He doesn’t need to panic, but now is the time to gather advice and get things sorted. So it’s good he’s starting to look at this.

Money saving expert have a good basic guide to look at-
www.moneysavingexpert.com/savings/discount-pensions/