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.

Pensions are tedious and boring but if you spend an afternoon today working out what you may get. Your OAP you will definitely thank you!

I did this the other month and realised because I was part time for so long, my private pension needs bolstering. The state pension won't solely help me live my retirement as I want. I've overhauled my budget and am now paying more into my private one.

One eye on living for now, one eye on paying off the mortgage and the other on my pension and two more in the back of my head for my DCs

@Cocomarine
my salary is low as an admin, and therefore probably similar to the OP current salary, which is low and I’m presuming he can’t have highly sought after skills or he would be earning more pay, but I could be wrong.

I am presuming the OP would therefore join the civil service at an admin type salary as he would lack the skills and experience to go in as a departmental head or very senior officer, and would be contributing to a pension which would be low and proportionate to his salary, as I have done.

I therefore presumed I was making a reasonable comparison in case he chose to leave a job he is happy in to pursue a civil service career which he may not want based on a misunderstanding about a pension. Which incidentally has changed since a pp took his pension. We have to work longer pay in more and get less back.

Hope that clarifies why I made the comparison.

Most pension schemes, public sector or private have shifted to paying more, for longer, to get less back.

So in that respect, you can’t say the LGPS isn’t very good - as compared to other schemes now (rather than compared to what it was) is is still good.

If your salary is low, then getting less than a £1000 a month after 30 years contribution (were they all full time, by the way?) also isn’t necessarily bad. Proportionate to what you pay in, it may be very good!

Yes, £650 a month (as an example) is nothing compared to a senior manager getting £2K. But if you’ve always earned £1K a month, then a guaranteed index linked £650 a month that you no longer have to work to earn is actually very good!

Obviously I’m making up numbers here, but you can’t say a low pension is bad, when you’ve been paying contributions as a % of a low salary.

A good comparison is to look at how much you’d have to save yourself to either buy an annuity for the same amount of monthly pension, or how much you’d have to have invested to draw down that amount every month. I can tell you - on those measures, the contribution for LGPS still wins hands down!

If you worked full time NMW in the civil service. You get about £18000 pa pay now.
You gain 1/54 your salary per year worked under CARE. So 333.333 per annum.
Over 20 years this is 6666. Added to your state pension you are looking at almost £16000. Which is pretty good in comparison to £18000, for doing nothing.

Most calculators say plan to have 2 thirds your working income on retirement, as often outgoings also decrease.

Some very useful information here. Thanks everyone. I think I will end up helping to pay his missing NI contributions.

For those who have wondered, DH is skilled at what he does but he is in the Arts. When he finished his studies, the way the industry worked meant he did a lot of work for free or was paid very poorly but accepted so he could get the experience.

Make sure child benefit has been claimed or you can't get these credits. If the parents are affected by High Income Child Benefit Tax Charge, they need to claim but opt out of receiving money, otherwise there is no NI credit to transfer.

OP if your husband took time off work to look after your child(ren) then you should absolutely share your pension with him!

Oh sorry zombie thread. But my point still stands