Pension one

[Nograssisgreener]

Hi, iam interested in starting a private pension fund and would like answers as I genuinely need help .

Iam in my late 30’s is it to late to do this?

Is there a limit to pay in each month ?

When do I stop paying it and when do I start getting the payments?

If I die before the pensionable age will my family be able to get this money ?

Which companies can you recommend I contact ?

Will I still get my state pension when the time comes even if I set up a private pension ?

Do you advise both state And private pension if I got the money ?

Thanks

Are you self employed? I ask because most employers have to automatically enroll you into a pension these days in the UK.

Are you an employee?

Ok so first of all if you are an employee then it will be worth checking out your workplace pension as your employer will likely contribute into your pension which is free money for you. If you are already doing this or are self employed or a SAHM
then you can open a SIPP.

No, of course your thirties is not too late!
You can pay in up to 40k per year. There is a lifetime cap of just over 1 million In total, this includes growth.

You can pay in until whenever you want, the longer the better. And usually you take your pension income after 55 but the loner you leave it the more you’ll get per year.

You would complete a form saying who you want your pension to be left to. If you die before pensionable age then the money goes to that nominated person/people. The good thing is that pensions are outside inheritance tax.

I would suggest you do some research in to pensions.

This podcast series is a good starting place: meaningfulmoney.tv/season-11-pensions-masterclass/

There are limits for what you can pay in based on your current income and there is a Lifetime limit.

It is often financially better being in your workplace pension scheme at least paying in enough to that to get employer contribution.

So knowing about your income source is going to be helpful to answer your questions:
Annual salary < £40,000? >£50,000?
Workplace pension - is there one, is it salary sacrifice, what is employer contribution, what is minimum your contribution, do you have a selection of fund choices or is it very limited in fund choice?
If you do not have a workplace pension, why? Are you self employed and if so are you s Ltd company or sole trader, or something else?

Is there a limit to pay in each month ?
There is an annual limit which is £40,000 or your income if lower. There is also a lifetime limit.

When do I stop paying it and when do I start getting the payments?
A SIPP would currently start paying out from age 55 but you may not want to have anything then, you may still be working and still contributing to it. The minimum age is due to increase to 57 in 2028 and to keep increasing from then on and is expected to be 10 years before state pension age. So in your case at least age 57 and possibly older.

If I die before the pensionable age will my family be able to get this money ?
You nominate a beneficiary. As a defined contribution scheme it will the pass to your beneficiary.

Which companies can you recommend I contact ?
Personally I have a SIPP with Vanguard. This is NOT a recommendation... there are different types of pension and a SIPP may not be suitable for you. There are also many providers... Interactive Investor is lower cost for a SIPP once the amount in it gets over a certain value.

Monevator has articles and comparison tables, so good place to start your research: monevator.com/find-the-best-online-broker/

Will I still get my state pension when the time comes even if I set up a private pension ?
Yes, subject to your NI contributions.

Do you advise both state And private pension if I got the money ?
Yes but there are other options to consider, including Lifetime ISA and Stocks & Shares ISA. Having a combination of everything may suit you... personal finance is very personal.

Make sure you are in the right place to start...

• consumer debt free (no debts other than a mortgage)
• at least 3 months of expenses emergency fund and during this pandemic I would increase that to 6 months or even higher.
• contributing to a workplace pension to get the employer contribution.

You can open a LISA pension until you are 40 and pay into it until you are 50. You can only pay in £4K a year but if you do the government give £1k into as well

You need to speak to an IFA. My husband is one if you wish to drop me a pm