Why some clients start their pension late on in life

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How to start a pension if you've left it late

Why some clients start their pension late on in life

Ms H, 51, started back in the workplace two years ago once her children had reached secondary school age. 

She had not been in employment since before her first child was born, and had not been making any pension savings of her own during that time, although she always tried to put money aside for a rainy day.

Now she is back working part-time for a local church, and has been auto-enrolled into their workplace pension scheme.

However, given her salary and the fact she works only two days a week, her own pension contribution is about £5 a month, doubled by the employer to a total pension saving of £15 a month.

When asked whether she thinks this will be enough to retire on, she replied: "No. I guess it will be beans on toast for the future every day."

Her husband will have a generous civil service pension, and unless the government makes any drastic changes, she expects the state pension to kick in once she reaches 67, but she is concerned about her personal financial future.

This has been compounded by the fact that many years ago, she used to work for Tarmac, part of Carillion, which went bust in January this year, and took people's pensions down with it, and her civil service pension, which she paid into before her children were born, seems to have been eroded to almost nothing.

Ms H says: "I got this strange letter saying that Carillion have got my pension now. Plus, I worked for the civil service for several years and then I was made redundant.

"It should have been frozen but I've been told it's worth about £90 [a year] and I know it should be more than that because I paid a lot into the civil service pension.

"But I don't know where to go, who to look for, whatever, so it's all very confusing."

Changes in circumstances

Ms H is typical of many second-jobbers: tiny bits of frozen or deferred pensions lingering from their single or pre-children days, long years without making any form of pension saving whatsoever, and then auto-enrolled into a low-contribution workplace scheme much later on in life. 

They have made some form of saving, but not much, and they do realise the importance of making the most of their savings potential.

Not all later savers, however, are second jobbers or returning later on in life to the workforce; some will have had to start work for the first time, for example after divorce or the death of the main breadwinner. 

Many of these people might be low-skilled, on entry-level salaries, and the need to save into a pension for their later life has to be balanced against meeting their daily living expenses as a newly single person.