No pension at 40

[Its2early]

As the title says, I'm 40 and don't have a pension. I've worked for 24 years, 4 of which were part-time when I was a student and 5 as self-employed. I had a 2 year break after having my DC and then took on a part-time, employed role which I've been doing for almost a year now. 3 months into this job I was auto enrolled into their pension scheme to which I contribute a tiny amount due to give my low hours and earnings. The pension calculator shows that by retirement age, I'll have £15k in the pot. I think I contribute 3% which the company matches. It's the bare minimum.

My DC are both below school age so I have no intention of ever returning to full-time work. DH earns a good salary and has a very healthy pension. Should I start contributing more to mine or would I be wiser to look into other investments?

You would be wise to plan for the worst and hope for the best. The worst is a scenario in which you find yourself financially alone from tomorrow. The best is that a long happy marriage which is financially secure lasts until the day you die.

For women I actually don’t think there is a grey area with this and all women should be encouraged to secure themselves financial independence from the day they turn 18.

If you don’t want to ever work full time again then you have to make sure that you have never work full time again money. And that this is not dependent on anyone else. For the majority of people this is secured via employment.

If you don’t want to work full time then how an earth can u expect to have a good pension

If your dh's pension has a spousal element you will get a small spousal pension not the whole thing. My dh gets less than 50% of my old final salary pension if I die. The smaller defined contribution pension I have will go to him.

Paying 5% with employer contributions of 10% (depending on his salary) might not add up to a decent pension on its own. I pay 6% and my work tops it up to 25%.

You need to stop making assumptions and start proper planning. If you don't understand pensions start researching and/or speak to an advisor.

To be honest this is DH's position. Full state pension, no private pension. I get a much bigger tax advantage than him when paying into any pension and I figure he'll either inherit mine if I die or he'll get half if we divorce.

Hopefully we'll be together in retirement in which case the total amount (2 x state pension plus my pension) will support us very comfortably.

DH earns a good salary and has a very healthy pension.

I would start by finding out exactly what the projections are here vs. your expectations and consulting a good financial planner. Him contributing 5% and employer 10% isn't that good - but, of course, that depends on his salary.

I never returned to work FT either - which was a financial decision taken with DH and a large part of that was that his pension was sufficient to top up mine. Mine is fairly good for someone who has worked part-time for the last 22 years (only 6 years FT) as it is a teachers' pension but I would definitely have returned back FT for the pension if I wasn't sure that DH has enough to cover us both.

DH had various employers so I can't remember all the contribution percentages (the ones I do remember were 8/8%, 10/10% and 9.8/21.6%) on low six figure salaries (£110-£165K/yr range excluding bonus, as no pension contributions on that) for the last 25 years (started contributing to a pension though at 18, which was 12 years more but on lower salaries). All in a SIPP now (so 100% inheritable) and he has stopped paying into a his pension (self employed now/has saved enough) but does top up my SIPP.

"I have no pension’ and ‘I don’t intend to work full time because I don’t want to"

Fair enough! You shouldn't feel pressured to work full-time just to pay into a pension that you may never see. The downside is that you might not have much to live on in retirement but that might be OK with you if you're happy with a simple life.

Thanks for all the advice! As is clear, I'm clueless when it comes to financial planning. Money has never been a focus for us as we've always earned well and lived comfortably. However, the good old days of 2 F/T salaries and no dependents are gone now and I'm aware that, being 40 with 2 young DC, it's important to have a plan in place for the future. I will definitely look to speak with a financial advisor.

You shouldn't need to top up NI if you have children. Child benefit gives you a credit each year until the youngest is 12. Even if your husbands income is above the threshold you can still claim and just not be paid the child benefit money.
Your salary also sounds like it should be in the lower earnings limit sonwill.give you a year.
What you get from your husbands pension if he was to die would very much depend on the type of pension and what ge decides to do when it is time to take his pension. There are no guarantees and even if you are a beneficiary it may not be for the amount.

Sorry, I meant I topped up my contributions when I was a student working part-time and I paid voluntary NI when I was self employed. My eldest is 4 so not paid NI since during that time. That's true re DH's pension, it didn't occur to me that he could/would nominate someone else but you never know. I don't know anything about his pension at all, I've never asked, but I will now.

You are in a vulnerable position and seem clueless (I don’t meant to be rude) as to why.

you might not want to work full time but you might need to. Do you intend to work until 68…you will need to as you currently have no provision. £11,500 a year at state pension age with all life’s bills isn’t very much!

you need to make serious investment to resolve this if you intend to retire on any more than the very basic

Yup, my DH would get half of my pension (which is actually a pretty generous scheme) if I pre-decease him, but only because I have named him beneficiary. He would get nothing if I had named another beneficiary and I could theoretically do that at any time.

If I cashed it in and bought an annuity, he'd get nothing.

It's not about him nominating someone else so much as the type of pension. You need to find out if it is defined benefit or defined contribution to start with. If defined benefit the pension scheme will have rules about how much is paid as a survivors pension, but it won't be the full amount, usually half or less.
If defined contribution it will depend non whether he chooses drawdown or purchases and annuity. If he purchass an annuity then he has to decide whether to take a larger amount per month with no spouse pension on his death or a smalled amount with spousal provision, again this is unlikely to be more than half.
You need to determine all of these things and even then not working full time and building your own pension is leaving you in a very vulnerable position.

How can you say your DH has a healthy pension fund when you have no idea what it is and how it’s performing to date and presumably haven’t seen any of the projections of what it could deliver in retirement ?

You really do need to address all of this and your own pension.