Is it worth starting a pension at 54?

[Positivelypatient]

Hi, looking for some opinions on whether I should bother to join my oganisation's pension scheme at the rather late age of 54.

For background its the LGPS but I am going to be going to part time in January.
Just re-joined my organisation after a year's gap (and I didnt join the scheme back then despite being with them 14 years... yes I know, big mistake but unfortunately I was a single parent for much of that time and just couldn't afford it).

Im not sure I will be staying with the organisation for more than 5 years but who knows? I might end up here til retirement and that will be another pension regret.

Im thinking it might be worth doing it just for the Death Benefit.

Has anyone else joined a pension scheme much later in life and did it turn out to be a good move?

I dont have any other pensions apart from a frozen final salary pension from the 90s (about 10 years worth)

I did at 52 because I was missing out on the employers contribution. I wasn’t staying at my job, but I’ve been here 6 years now, and missed out on all those contributions.

Provided you can afford the employee contributions I'd have thought it would be totally worthwhile. At 54 your State Pension age is presumably 67. Even if you don't stay in harness that long years in a defined benefit scheme like LGPS are worth far more than anything you can buy in the open market.

Is it final salary or defined contribution? (Sorry - I know nothing about LGPS in 2023.)

If final salary then - fuck yes! Join it! FS is ridiculously expensive for someone in their 50s (as not much time for the money to grow).

If dc then - yes (assuming it is a decent level of contribution from your employer) but without the swearing. With a decent level of contribution then that is still quite a bit of “free money”.

100% worth it. Why wouldn’t you? How will you fund your retirement if you don’t pay into a pension?

I’d pay extra in through APC’s or AVC’s to make up for all those lost years.

If it's LGPS I'm assuming it's defined benefit (pension based on career average salary). In which case I would join.

As far as I know its a CARE scheme (Career average (revalued earnings)

@LegendsBeyond why wouldn't I? because money? I won't be able to afford to contribute extra. I intend to downsize property later on and will have the proceeds of that to bolster my income. Also intend to continue self employed job beyond retirement age.

Yes with bells on it! LGPS pension is one of the best there is. It would be insane to miss out an opportunity like this. Put in as much as you possibly can.

Definitely. LGPS is one of the best.

God yes even if it only ends up paying enough to cover your council tax every year and try to contribute extra if you can.

Thank you everyone, I definately need to understand more about pensions, especially the LPGS one, as I said earlier, I've been on an endless cycle of working to pay a mortgage and feed and clothe 3 children for the last 14 years and only now can afford to actually contribute to a pension scheme.

Although in hindsight I obviously wish I had started when I was previously with the organisation. But £40 a month was a week's food shop or a bill paid.

The LGPS is an incredibly good pension and you would be foolish not to join it, at any age.

As a defined benefit pension - it's arbitrary how much you contribute, so you don't need to worry about "putting in as much as you can." Your contribution rate will be set by your FTE salary.

Agree with PP even a couple years in a defined benefit schemes is absolutely worth doing. You'll get far more out of it than you put in and if you dont currently have much of a pension, even an extra £50 a month when you're retired will make a difference

I think you should do it. 100%.

Yes I think it's worth it. The employers contributions are v good so doesn't make sense to miss out. Plus you also get the benefit of death in service/ill health retirement benefits.

You can also make extra contributions if you feel able to.

Thanks so much everyone, I will definately be enrolling in the pension scheme, so regret that i didnt do it back in 2009 when I joined the organisation.

I didnt realise that the LGPS was so good.

Not enrolling is effectively turning down free money. Why would you do such a thing?

@JesusMaryAndJosephAndTheWeeDon my age / previous financial situation making it impossible to contribute to a pension.

I started working for the nhs a year ago in my late 50d and am paying a pretty chunky pension each month but reckon I have about 8 years to go so it will be worth it even for a small ish amount

I'm in LGPS. I've been told over and over by DH's accountant (he used to run his own business) what a great scheme but is.

Do you have any other provision for your retirement? If not, and you're going to start a pension, then at the very least, join your employer's scheme and benefit from the employer contributions.

Even in a defined contribution scheme, as I'm in working for a charity, employer contributions are free money that's best used if it's there and you can afford to pay your contributions.

Definitely do - I did at same age and was surprised what I received retiring at age 60- wasn’t in a particularly well paid job

I would look at how much it is going to cost you, and what your projected return (annual pension) would be at your anticipated retirement date assuming you stay there till that point, and similar but for x years if you think that's how long you'll stay.

So assuming a 67 retirement age, what you the monthly pension be after;
5 years
10 years
Remaining 12/13 years.

Then look at all your potential retirement income, ie state pension etc.

Then consider how current retirement income + LPGS pension compares to current retirement income + pension credit (if current retirement income would entitle you to it).

I don't think its quite so simple as "it is always better" if you have a relatively short period to retirement and anticipate low retirement income, due to pension credit.

BUT there is no guarantee that current state support will be the same when you retire as it is now.

I didn’t join my pension scheme until my 50’s. I don’t see it as pension income as such (it will be a pittance as I joined so late), I look on it as a savings account where my employer doubles the contribution that I put in (so if I put 5% into my to pension, they add another 10%, so I’m ‘saving’ 15% of my salary a month.

My Lg pension is 50 per cent more than my private one for same length of service
Obviously each case is different and I cannot guarantee exactly the same scenario for you The only thing I would say that in either case it depends on your salary no good joining LG if paltry salary