No pension, no plan.

[kitkatcrunch]

I've been a SAHM mum, worked part-time, and I'm now self-employed. Post-lockdowns, I've been in a right mess financially, and whilst I'm keeping afloat, I'm not able to save anything really, but I'm trying to sort out my finances.

I don't have a pension, apart from one I paid into from a job pre-kids, which will net me about 50pence.

Can anyone point me in the direction of suggestions how to start preparing for the future on self-employed low income?

No advice sorry but I would like to read responses am in a similar situation.

How old are you?

Have you checked your state pension forecast?

I think a lot depends on how old you are. The. 'family' pot should pay into a pension fir you.
If not possible at least make sure your NI contributions are up to date.

Pensions seem to be the area of financial planning that it is hardest to get advice on.

• Check your state pension forecast and work out what you need to do to ensure you get the full number of years' contributions. Read up as much as you can on the government website about that
• Read up on what tax relief you get on pension contributions and work out how much you can/need to put aside each month
• Research various products and see which works best for your situation

Some basic rules of thumb are you need 50-70% of your working income in retirement and the percentage of your salary you save each year should be around half your age (so if you are thirty, you need to save 15% each year).

I think I would start by getting very good at budgeting, tracking all expenses, making sure you are keeping enough back to pay HMRC and any accountancy fees.

When you have more coming in than you are spending, then I would pay off any debts, before investing.

You may want to go through the first few of the Ramsey Baby Steps:
www.ramseysolutions.com/dave-ramsey-7-baby-steps
There is a podcast/YouTube show which can help to keep you motivated whilst going through the first 3 steps.

You may want to learn about investing, such as by listening to podcasts from UK financial planners:
Meaningful Money
In Her Financial Shoes
Money To The Masses
Informed Choice Radio

This scares the shit out of me. I have no pension and don’t earn enough to pay into one through work.

Sorry not helpful. But I’m following for some sort of advice!

Look into a LISA. If you are self-employed you could open a SIPP but if you have a low income then the platform fees may eat too large a portion of your investment to make it worthwhile!

thanks for the podcast recommendations @nannynick

I'm kind of glad I'm not the only one @EvilPea, @MyDcAreMarvel!

I'm 39

Thanks for podcasts, and advice so far. I didn't even know you could check a forecast!

Here it is OP www.gov.uk/check-state-pension

My work pension is worth £500 a year and I darent check my state one. There’s a real hidden issue with women who never earn enough to pay a private pension/ are single parents/ are propping up the bills with part time work/ are carers.

Have you got the details of your old one and a current value for it too? Are you absolutely sure there aren't any others?

There is a Government backed advice line you could try. No idea how helpful they are but it is free, impartial and for self-employed people www.moneyhelper.org.uk/en/pensions-and-retirement/pensions-basics/midlife-review-for-self-employed-people

@NewmummyJ

Look into a LISA. If you are self-employed you could open a SIPP but if you have a low income then the platform fees may eat too large a portion of your investment to make it worthwhile!

This is the problem with everything I’ve seen. When you can only put in £50 or so a month, no one seems to want to know.

I do a little research, shit myself and stop.

I’m a private renter, so just saving it, isn’t necessarily the best thing to do either as that could cause problems with any benefit I might claim later.

Sorry op I’m completely hijacking. You truly hit a nail into the giant sandpit I’ve been in

@EvilPea there are definitely some providers that will have low fees and minimum payments. E.g. for a Fidelity SIPP the minimum is £25 a month help.fidelity.co.uk/site/dealing-and-managing-cash/minimums-to-open-a-pension and the service fee is only 0.35% if you have a regular plan set up. Of course that's not going to set you up for a comfortable retirement by itself but getting started and comfortable with how it works is an important first step.

I don't think they or Vanguard offer LISAs though,

Get yourself a financial advisor.
I worried about my peanuts pension but didn't know what to do. Then, my DH died suddenly, (accident) and insurance payouts came with financial advice, so I interviewed several financial advisors, & chose one. That disaster made me realise how useful a financial advisor can be. He's saved me so much money and worry, and years later with pensions, (yes, plural) I can see the payoff compared to other widows.

Most important is to check your state pension entitlement - www.tax.service.gov.uk/check-your-state-pension

You need 30 years of national insurance contributions to qualify in full (you'll have built up some already). This is far more important than any private or workplace pension and you should have plenty of time to top up contributions if you haven't got enough.

If you're self-employed, pensionbee.com is good (nothing to flog here - I'm a financial journalist). Alternatively, nutmeg.com is pretty cheap and easy. Contribute what you can. Anything is better than nothing and it will really mount up over time - compound interest is magic.

Don't panic or be paralysed into indecision. Ignore the scary numbers. Just do something as soon as you can and you'll feel a million times better.

Good luck!

Thank you, honestly. I thought I was going to get slated for being daft and having my head in the sand for so long.
@EvilPea honestly, it's fine. Hijack away if it helps.

Some basic rules of thumb are you need 50-70% of your working income in retirement and the percentage of your salary you save each year should be around half your age (so if you are thirty, you need to save 15% each year).

The advice isn’t to always put away half your age, it’s to put in half the age you were when you started saving. So, if you start putting in 15% at age 30, you can continue to put in 15%. If you start at 40, you should always put in 20%.
Obviously this numbers aren’t achievable for plenty of people, but the advice isn’t that the % keeps going up even if you’ve been saving well.

@SickAndTiredAgain

Some basic rules of thumb are you need 50-70% of your working income in retirement and the percentage of your salary you save each year should be around half your age (so if you are thirty, you need to save 15% each year).

The advice isn’t to always put away half your age, it’s to put in half the age you were when you started saving. So, if you start putting in 15% at age 30, you can continue to put in 15%. If you start at 40, you should always put in 20%.
Obviously this numbers aren’t achievable for plenty of people, but the advice isn’t that the % keeps going up even if you’ve been saving well.

Yes that is correct, I worded it badly!

The percentage of your salary you save each year should be around half your age when you start

@Startofschool

Most important is to check your state pension entitlement - www.tax.service.gov.uk/check-your-state-pension

You need 30 years of national insurance contributions to qualify in full (you'll have built up some already). This is far more important than any private or workplace pension and you should have plenty of time to top up contributions if you haven't got enough.

If you're self-employed, pensionbee.com is good (nothing to flog here - I'm a financial journalist). Alternatively, nutmeg.com is pretty cheap and easy. Contribute what you can. Anything is better than nothing and it will really mount up over time - compound interest is magic.

Don't panic or be paralysed into indecision. Ignore the scary numbers. Just do something as soon as you can and you'll feel a million times better.

Good luck!

It’s 35 years of National Insurance contributions to get the full amount.

I’m on low pay and I’m worried about the NI threshold - won’t this mean although I keep more pay I’m not contributing to my pension?

Don’t forget that you get tax relief so just start a pension as you get essentially free money. No one will take out an annuity so look at it like a savings pot that you can access later in life. Of course there is a risk with pensions but start now and start small and don’t either like I did ! The other thing is they are pushing through a bill to increase state pension age for those of us in our 50s to 68 . I can only imagine the age you will need to be to complain !

Age to claim not complain

Also worth looking into what options there are for your DP/DH if you have one. If they are in full time employment, what does their employer give for additional payments? What's their pension pot looking like?

I'm in mid 40s and having ignored pension for far too long (just paying in minimum) I'm now taking a far more active role in it, as far as finances allow of course!