Too old for a pension?

[pensionnightmare]

Firstly, no judgement please. My life hasn't panned out the way I planned in my younger days.

In my 20's, full time employment with a decent employer who had a non contributory pension - approx 5 years worth.

Then had a two year break with an employer who didn't have a pension - this was before it was made a legal requirement.

Late 20's, early 30's - back with a large employer and a pension - approx 5 years worth with me contributing and the company.

Those two pensions are sill there - both frozen as such but will give me something on top of the normal state pension. First one doesn't' have a value as such, will just give me roughly £30 a month, second one there's about £25k in there.

Then had a career break - then got pregnant. DH at the time earned minimum wage and we were on tax credits for ages. Could barely afford to live, definitely couldn't afford to put money aside into a pension.

Fast forward to now. I'm 45 and finally earning money - not a great deal but probably enough to put say £200 a month aside into a pension.

However, I'm being told that's pointless at my age and if I can't afford to put at least £600+ into a pension, I'm wasting my time and money.

I'm starting to massively panic to be honest. My 20's and 30's have just zoomed past and because I wasn't in a 'normal' job whilst pregnant and subsequently bringing up babies/toddlers, I haven't kept up that pension part.

I have full state pension according to my online record - as in, I can't get anymore, I have the full allocation.

What should I do? Start adding £200 a month to one of my existing pensions, or just start saving? £200 a month for 20 years is only £48k . I will be mortgage free when retired I might add and DH has a regular work pension (nothing amazing but just a Standard one where you pay in and your employer does too)

Why are pensions so bloody complicated?!

It's not too late, at all. It's a tax efficient way of saving.

Look into income drawdown, an alternative to buying an annuity.

Lots of advice here! I would also do this exercise with your husband and look at his pension forecast too. What % he is contributing, what % is his employer, is this via salary sacrifice (tax free), what’s his income projection at retirement, can this be increased? Obviously anything can happen in the next 20 years but ideally if all goes to plan your retirement income will be joint to share bills etc :)

Also, make sure that you have both filled out your expression of wish forms (not sure if that’s the exact name) with each pension provider so if something happens to the other person you are entitled to the pension pot, I don’t think you automatically inherit this just because you are married.

It's not just you. You might not be getting employer contributions but you are getting money from the taxman.

What are your NI contributions like?

Sorry, one more thing, Martin Lewis did a 90 minute pensions special which might be worth watching for advice

https://www.itv.com/watch/the-martin-lewis-money-show-live/2a1827/2a1827a0139

Definitely worth paying in. You have 20 years to go.

Also look at your DH affairs. Will he get full state pension too? How much is he paying into his work pension etc? Is it worth him increasing his contributions?

Also don’t forget to make sure you are both named as the beneficiary of the other ones pension and check the conditions on it. If one of you dies then you can often inherit the pension, sometimes tax free.

That’s not the case. those who are eligible for new flat rate state pension but have paid serps in past pre 2016, may not have to pay 35 years NI contributions for the new state pension. This is because the system basically calculates it so you do not end up worse off under the new flat rate pension and the previous pension only required 30 years.

it is complicated tho and each person should check their pension forecast.

Lifestyling into bonds and cash is still relevant if you DO want to buy an annuity though, and also there may be lifestyling options tailored to drawdown too .... something to look into when considering investment strategy.

I only started working in the NHS at age 42 after retraining and will have 25 yrs of pension assuming I retire at 67 state pension age.

Obv my employer contributes too which is a massive boost but I am forecast to receive £4000 pa ( on top of full state pension). Won’t keep me in luxury but deffo worth it to have a bit extra over and above state pension. Remember pension savings get tax relief. My pension contributions are deducted before tax but I believe private pension providers reinvest the 20% tax relief back into your pension pot. I would seek independent advice and get something set up asap if I was in your position. Also as dc become financially independent you can increase your payments.

The employer's contribution is irrelevant for the NHS pension

When you say you are "forecast to receive £4000 pa", do you mean that's what you've calculated for the 25 years, or what is currently showing on your TRS?

I started my private pension at 46 and I’m predicted to get out per month roughly what I put in. If you could get £200 a month back at 68 then that would make a huge difference to you. That plus your old work pension would be more than the equivalent of an entire extra state pension.