Pension

[wackojacko1234]

Is it too late / or worthwhile to start a pension in mid/late 30's ?? Appreciate this would be a later stage within career to start but with savings built up elsewhere in isa's not all so bad ...

[sidicks]

wackojacko1234 said:

Is it too late / or worthwhile to start a pension in mid/late 30's ?? Appreciate this would be a later stage within career to start but with savings built up elsewhere in isa's not all so bad ...

It's never too late and realistically you still have 20+ years for investment.

[red_slr]

Lots of variables, but generally speaking its never too late.

Make sure you understand the rules though, age at which you can withdraw and various fees etc being the 2 key items.

Also worth noting that you can pay upto 3 years worth of pension allowance in at once if you have not put anything into a pension in that time, should that be an option.

[PurpleMoonlight]

Nope, never too late. I only started last year at age 55.

My theory, £40,000 x 10 in, £40,000 x 10 out. If I am still alive at 75 I will worry about finances then.

[JulianPH]

Not in the slightest. Most people don't focus on this until there forties or fifties.

You will do well to start now.

[bad company]

Start now, earlier the better. I got to retire at 56 because I had always paid into a pension, I also sold a business.

Speak to GingeR - a Phr and seemingly well respected financial advisor.

[PurpleTurtle]

red_slr said:

Also worth noting that you can pay upto 3 years worth of pension allowance in at once if you have not put anything into a pension in that time, should that be an option.

Provided that the pension was in force during those three tax years, then you can make use of unused allowances in previous years, the 'carry forward' rules.

http://www.hmrc.gov.uk/tools/annualallowancelimit/

i.e. you can't just start one today, and claim the last three years' worth of allowance.

But, if you started one today and put £10k per tax year into it, in three years time you could (if coming into the money to do it), use that 90k (3 x 30k) of unused allowance to pay into it.

[red_slr]

PurpleTurtle said:

red_slr said:

Also worth noting that you can pay upto 3 years worth of pension allowance in at once if you have not put anything into a pension in that time, should that be an option.

Provided that the pension was in force during those three tax years, then you can make use of unused allowances in previous years, the 'carry forward' rules.

http://www.hmrc.gov.uk/tools/annualallowancelimit/

i.e. you can't just start one today, and claim the last three years' worth of allowance.

But, if you started one today and put £10k per tax year into it, in three years time you could (if coming into the money to do it), use that 90k (3 x 30k) of unused allowance to pay into it.

Never knew that. Was also just reading you have to have had the income to offset it, didn't know that either.

[PurpleTurtle]

PurpleMoonlight said:

Nope, never too late. I only started last year at age 55.

My theory, £40,000 x 10 in, £40,000 x 10 out. If I am still alive at 75 I will worry about finances then.

Same here, I started at 40 and am doing £20k pa in, over (hopefully) 20 years.

I see this as the only remaining financial benefit of in-IR35 IT contracting at the moment.

Tax free lump sum drawn down of 25% at 55 is also a big incentive for me. Assuming no growth my 'pot' will be worth £300k by then so £75k to spend on cars and motorbikes give my current 2yo a decent leg-up in life is the aim.

My fund is fairly well spread, is currently giving me better than expected growth. Am just very nervous that whoever is Chancellor in 15yrs time will change the rules completely. I'd like these things to be set in stone now.