Is there any point in starting a pension?

[LonnyVonnyWilsonFrickett]

I'm 50, have been a freelance for 10 years. I'm doing OK, usually end up paying the higher rate of tax but only just. DH is well paid and has put a lot of effort and savings into his pension, I've focused on saving up cash to have a bit of a cushion for bad months, etc.

I've looked at setting up a pension before but have to admit I've been a bit bamboozled by it all. I've also thought the charges seem quite high, I'd only really be looking to put away £400 pm or so. I have a very small company pension from 10 years of employment before then, which I can't take out or do anything with.

So is there any point starting a pension now?

Oh should say we're homeowners but still paying off the mortgage.

If you tip into the higher rate of tax, paying into a pension can be VERY beneficial

and yes, it is never too late to save into a highly tax efficient package.

Are you sole trader or Ltd co ?

Depends if your DH's pension is enough for both of you and it has the option that if he passes it gets passed to you and then your children perhaps not, but if you are paying higher tax you get tax rebates for putting into a pension hence it's already effectively worth 40%/25% more already. Plus you might end up with enough to soften the blow between when you want to retire and drawing state pension.

It depends how much of an income you need/want when you retire! If you don't have a pension, or only have a small one, do you know how much you'll be getting each month? Will it be enough for, say, 20-35 years of retirement? Will you savings last that length of time?

There’s no “only” about £400 a month.
If you can afford to save £400, and you earn enough at 40% that could be £600 saved for your £400!

However, as you’re freelance you should get proper advice. But if you have your own company, you may make more money by having your company pay into your pension, rather than you doing it from income.

It could be beneficial, I don’t have a pension either I am 35 and plan on DH’s pension covering us.

Most definitely should pay into a pension.

Not just the tax relief now, but when taking the money out in say 15 years time you might not be taxed pn the income as you could well be a non-taxpayer in retirement. 40% in - 0% out....whats not to love.

Also charges. Can get a very decent pension for less than 0.5% pa. Look at Royal London for example.

Also pensions are very flexible. You dont now have to trade your pension "pot" for an annuity but go into drawdown & keep the funds active. If you die before age 75 your dependants /children can inherit the fund totally tax-free.

As for your old company scheme - are you sure you cant do anything with it ?? The only pensions nowadays that cant be transferred into your own scheme are public sector ones. What type of company scheme was it....final salary (db) or define contribution (dc) one ??

Thanks everyone - I'm a sole trader so it's 'my' money rather than company money iyswim.

The idea is to live off DH's pension plus my savings and income from a flat we have. And probably to not stop working tbh... My existing pension I definitely couldn't move before but I will look again.

Sorry if I missed any questions, looks like the consensus is it's worth it though.