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Is it worth Starting a Pension aged 54?

12 replies

54isanopendoor · 28/08/2022 15:44

I don't have a pension (I think?) as I've been a Carer for many years.
I am Separating. My STBexH will be giving me part of his pension.
I'll need to have a pension scheme to put it in, won't I?
(or can I receive it in cash? I don't know?)
If I DO need a pension where is best to start (the amount is around £60K)

OP posts:
Dougieowner · 28/08/2022 15:49

It is "never" too late to start a pension.
Speak to an IFA, explain your situation and they will advise on the best course of action.

Blueskythinking123 · 28/08/2022 15:59

You can't have it as cash. When I had part of my ex pension it sits separate to my actual pension. You do need advice, it doesn't pay the same as my actual pension i.e if I was to die it can't be drawn down by anyone else.

54isanopendoor · 28/08/2022 16:44

@Blueskythinking123 Ah, ok. I had wondered about a 'cash' option as STBexH is thinking of cashing in his pension soon (I think he can from next year so I supposed that it would apply to my portion too)
So, if it doesnt sit in an ordinary pension account & I cant leave it to anyone else, is it much good to me?

OP posts:
Margo34 · 28/08/2022 16:54

Yes it will be of use to you. It does sit in an ordinary pension account but it will be identified as from a pension sharing order or the like, so you will still be able to use it but there will be some limitations.

Speak to a financial advisor!

Mindymomo · 28/08/2022 17:30

You can get a state pension forecast either online or sent to you to see if you will be eligible for one. If you do it online it will tell you which years you’ve been in, and give you an option to pay any missed years to get a full state pension. I was employed and at 58 put into a NEST government pension, but unfortunately I was made redundant at nearly 60. I have continued paying in to this pension as the government puts money into it as well. The maximum I could put in was £3,000 per year (don’t know if this is still the amount). You can make a telephone appointment with The Pension Advisory Service, they can give you advice which would be best for you.

unsync · 28/08/2022 17:43

I have the same. I've opened a SIPP with Nutmeg and the money from ex's fund will go in there.

Also as PP, check your state pension contributions, until April next year you can make up missing years quite cheaply and it's definitely worth doing.

54isanopendoor · 28/08/2022 18:06

thank you all.
A phone appt with the Pension Advisory Service sounds good.
I am rural, disabled, & broke so the liklihood of an IFA appointment is low.
My NI contributions are uptodate except for about 4 years way back in 1990s.
Is this the same thing? (I was told I couldn't 'pay up' those years as too long ago)

OP posts:
Runaround50 · 28/08/2022 21:33

Speak to CAB.
They are knowledgeable and offer free impartial advice on such matters.

solarbirdscalm · 30/08/2022 23:44

Citizens Advice are very unlikely to be able to help - they mostly don't/can't afford to employ anyone actually qualified in law or as a financial adviser. They will direct you to the free government pension advice service.

Scrunchcake · 31/08/2022 00:05

Hope you don't mind but I've pm-ed you.

Testina · 31/08/2022 08:34

”STBexH is thinking of cashing in his pension soon (I think he can from next year so I supposed that it would apply to my portion too)”

That isn’t how a Pension Sharing Order works.

The £60K will be transferred into a pension that you set up - it will be then be entirely separate from his pension and what he does in terms of “cashing in” is completely irrelevant to what you can do.

So firstly - yes, you need set up your own pension to receive it into. Don’t stress yourself over choosing perfect options… you can change later. A simple personal pension from any of the providers will do - Aviva for example, you can just set up online.

Once the money is in - you control it, nothing to do with your XH any more. You will be subject to all the standard regulations and options.

You could draw down from it at age 55 yourself. (I don’t like the term “cashing in” as it suggests you take the lot!) If you do, you can take 25% of it tax free. Thereafter you’re taxed according to your personal tax code and taxable income. Note that if you do start drawing on it, you limit your own future pension contributions. I’m not going to go heavy on detail - just want to signal that you need to understand your options.

The comment about not being able to leave it to anyone else on death is incorrect if you are receiving a cash equivalent sum that will be paid into a Defined Contribution pension. In that case, it absolutely can be inherited - and in a tax advantaged way as it sits outside of your estate for tax purposes - though it doesn’t sound like you’d be breaking any inheritance tax limits anyway! Perhaps the poster who said they can’t leave it to anyone has been brought into a DB scheme. Don’t assume that’s your situation!

54isanopendoor · 31/08/2022 13:19

Thanks to everyone who has replied.
Thanks to @Scrunchcake for your PM.

@Testina - thank you this is all very helpful indeed !!!

I don't think I can draw down any as I am on Income Support (topping up Carers allowance). I also don't know if any pension transfered to me will affect that IS?
CAB might be able to help me there but it's always shut...

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