Mid 40s and no pension

[Bedknobbroomsticks]

My DH is in his mid 40s and only has a group personal plan through his employer. He only joined and started paying in a couple of years ago so there isn't much in the pot. He's also low income so it isn't going to increase quickly.

I'd always assumed he had earned enough to have qualifying NI contributions to get a full state pension. We've checked and he's missing too many years such that he won't get a full state pension and it's too £££ to make up the NI payments.

At this point, is it still worth putting money aside into a SSIP? I've been saying into a pension since my 20s after seeing both my parents struggle with a low pension in their retirement. Mine won't be enough to cover us both and, being totally honest, I don't see why I should. I also want us both to enjoy our retirement together.

My question is, is it still worth paying into a SSIP now or onto his existing group personal pension plan? I am guessing the answer is yes but wondering if there are alternative ways to ensure a liveable income when he's old?

Thanks in advance.

Better late than never. Still worth it and would also be worth it to make up the missing years ,for state pension, of course depends upon find names but worth it.

he's missing too many years such that he won't get a full state pension

You need 35 qualifying years by retirement- if he’s mid 40s he’s got another 20 to go. Has he really not been working enough over the previous 25 odd years to get 15?

If he’s low-paid I assume there’s just not much money around for extra contributions but yes, extra will make a difference. The employer plan - do they match up to a certain level? If so more in there would be beat. What can he afford to save - and can you afford to either take more of the day to day bills to allow him to contribute more to his pension or save more yourself? If you want to be together in retirement then there’s really not much sense in not thinking of yourselves as a team. If you’re married any pension pots are marital assets anyway if you divorce.

At mid 40s he's still got another 20 years of paying NI. He only needs 35 years NI contributions to get the full state pension. How many years is he missing? It can't be that many, is it really too expensive to make up the contributions? How does that compare with putting a similar amount in to a pension?

The income threshold for qualifying years for state pension (LEL) is pretty low - currently £120 per week.
Unusual for a working man in his 40s to be missing so many - was he doing a lot of cash in hand work?
How many qualifying years has he actually got?

As @NoSquirrels says, he’s got some years to go, too.

There is a limited time to buy missed years. If he really isn’t going to make it to 35 years, then it’s likely that the buy back will be a better investment that a SIPP (not SSIP) because state pension is very good value.

When it comes to increasing personal pension payments - are you a 40% tax rate payer? If so, you’ll make more from upping your contributions than his.

You need your DH to do anything possibly to get his full state pension. That’s the first and best use of money. I also can’t understanding why he’s missing so many. Does he have at least 15 qualifying years? Get this sorted then anything else is a bonus. This would terrify me.

Also, are you homeowners and will you be mortgage free by then? There are things you can do now that will make things easier when you retire. Living off less now to pay into a pension will also mean you need less to maintain standard of living.

As others have said, the first step is buying back those missing years if he’s really not going to make 35 by the time he retires (but you should check). It may seem expensive, but that’s because it provides a guaranteed income.

www.which.co.uk/money/pensions-and-retirement/state-pension/can-i-top-up-my-state-pension-an0q09p37nsj#headline_2

All the info he needs, explained clearly, here.

You can buy back up to the last 6 years.

Can I remind you that the new tax year starts on Tue, so if he wants to buy to for 2014/15 he needs to do it by Mon?!

This link to do that via bank transfer:

www.tax.service.gov.uk/pay/choose-a-way-to-pay?traceId=03590576

Any children? I believe if you received family allowance this give you credits towards state pension.

Has he done a forecast on the gov website?

@Cantwaittomoveon it’s called Child Benefit not Family Allowance. Since 1981 😉
Sorry - I’m not being mean, just for anyone reading it’s important to search the right terms if they want more info.

You’re right that you get credits towards qualifying years if you claim Child Benefit for a child under 12 years old.

It’s quite unusual for a father to be the claimant though - and you can’t retrospectively transfer the credit.

[quote Cocomarine]@Cantwaittomoveon it’s called Child Benefit not Family Allowance. Since 1981 😉
Sorry - I’m not being mean, just for anyone reading it’s important to search the right terms if they want more info.

You’re right that you get credits towards qualifying years if you claim Child Benefit for a child under 12 years old.

It’s quite unusual for a father to be the claimant though - and you can’t retrospectively transfer the credit.[/quote]
Sorry meant Family Allowance’

Hi, thanks for all the advice. We will look into buying back some years.

He's missed some years because he isn't from this country. When he came, he spent some years studying so wasn't working. Then was in low income jobs post studies then took time off to provide childcare when our eldest was born. Only (and I'm embarrassed to admit this) we didn't apply for child benefit as I was over the income limit but we didn't realise the benefit of registering to protect state pension but not claiming. So that's 9 years missed there. We feel so daft as I can't believe we didn't know this.

Was he earning in a country that has a reciprocal agreement for qualifying years with the UK?

@Bedknobbroomsticks

Hi, thanks for all the advice. We will look into buying back some years.

He's missed some years because he isn't from this country. When he came, he spent some years studying so wasn't working. Then was in low income jobs post studies then took time off to provide childcare when our eldest was born. Only (and I'm embarrassed to admit this) we didn't apply for child benefit as I was over the income limit but we didn't realise the benefit of registering to protect state pension but not claiming. So that's 9 years missed there. We feel so daft as I can't believe we didn't know this.

It might be worth checking this through again. The Child benefit tax charge only came in in 2013 and you had to be earning over £60k to not benefit from it at all.

If you are still a high earner, it would be best for you to pay more into your pension so you benefit from the 40% tax relief.

Hi all, this is a great thread. I’ve just checked my contributions and they say I can’t improve my forecast any further despite my state pension being quite low. Does anyone know why this is & how I can buy back? There didn’t appear to be an option for that.

Sorry for the high jack OP

Well done for checking! Were you able to see your statement? It should say which years are qualifying and which aren’t. I think it’s only the last 6 years you can buy back. Were these all qualifying years for you? If so, it may be that you can’t buy anything back.

Why do you think your forecast is low? It’s not impossible to fall through the cracks but between chid benefit, a relatively low pay requirement and cover provided by benefits, most people should manage to get their 25 qualifying years.

*aarrggghhh bad typo! 35 qualifying years needed.

It says the estimate is based on NI calculations 2020.

It’s quite low for lots of reasons (less than 12k a year) I am 35, so another 32 years before I retire but I like to be financially responsible. I have investments but never looked near my state pension before.

@Mixitupalot this link will take you to the phone numbers you need.

You can actually make the payment online, but you need an 18 digit account number which is specific to the tax year you’re buying, so you do need to speak to them.

They should also be able to help you - and redirect you - to understanding why your forecast can’t be increased. You need to understand that before buying years.

www.gov.uk/future-pension-centre

@Mixitupalot

It says the estimate is based on NI calculations 2020.

It’s quite low for lots of reasons (less than 12k a year) I am 35, so another 32 years before I retire but I like to be financially responsible. I have investments but never looked near my state pension before.

I don’t understand this? Are you saying the state pension forecast is quite low at less than £12K pa? Because full state pension is nowhere near £12K, more like £9K.

And if you’re referring to your earnings, £12K pa is way more than enough to get a full qualifying year.

@Cocomarine says above that ‘The income threshold for qualifying years for state pension (LEL) is pretty low - currently £120 per week.’, so your low income shouldn’t be a problem there. It’s worth investigating now incase there are steps you can take. How many qualifying years do you have?

^ahhh - the woman herself! 😄

@MeanMrMustardSeed what can I say, I’m really interested in pension planning 🤣

what a wild BH Friday night!