Pension worry…help

No it’s not. Minimum wage is close to £24k a year.

Agree. It seems to be unique to Mumsnet that nobody should ever post about financial matters unless they are on the breadline. It is quite pathetic that a site aimed mainly at women, who often have less financial stability and freedom than men should tolerate this. Petty jealousy from people who think just because they dont have something nobody else should be allowed to talk about it.

As I said, that figure includes my state pension. I currently save £2500 per month.

Absolute rubbish. Most people dont just have the state pension. The figure for pensioners relying solely on State Pension is less than 20% of all pensioners. Most therefore have more than state pension.

thats an extraordinary growth in 17 years! For 77k you’d need a pot of just under two million pounds. Assuming an optimistic growth rate of 8% up until 67 that’s £4K per month contributions. Well done! That’s genuinely impressive!

I concede it’s a headline grabbing number, but the principle of invest passively and over as long a term as you can stands.

It’s a fair point, inflation would probably reduce that growth by a percentage point or two overall but you’d still be left with a very healthy pot.

Edited to add I have no idea how I quoted myself! That was meant for @Toooldtopretend

What do you suggest as an alternative then? Stay in the default fund or even (God forbid) cash and end up with a much, much lower amount that will still be subject to exactly the same inflation? And anyway £6m is still going to be a very decent wedge, even in 65 years' time.

OP I really wouldn't bother with financial advisers or podcasts. Just find out what investment options are available with your works pension. If there's a global equity tracker/passive fund then switch into that. Then don't give it another moment's thought, other than to stick in as much as you reasonably can when you can, until retirement. You've got plenty of time, you'll be fine.

You are doing your best and not putting your head in the sand OP. Just keep putting in as much of your bonus as you can. I'm retired early and I have never regretted putting in money when I was younger. The best advice my dear Dad gave me was to open a pension account the day I started work and keep putting what you can in it. It gives it chance to compound over time.

I’m just sceptical of a year on year 10% return, but yes, compounding is incred Now, just like the growth in the final 10 years that f a pension.

It seems like an impressive sum, but I wonder a) how much annual pension that would buy, and b) what effect would inflation have had meanwhile?

@Lifeasafish2 look up DWP online Pension Tracing Service. Very easy to use.

What utter bullshit. There's always someone worse off than everybody and OP has a genuine and sensible concern about her pension. I wish useless, unhelpful thread police like you would piss right off.

How’s your husband’s pension? That’s what I’m banking on 😭 because I’m 40 and mine is around £28k. I pay in 3% and employer pays in 5% – I can’t afford more right now. AND I’m mortgaged til 74.

Welp.

What don’t you agree with in this? If you put the numbers into a compound calculator you can see it for yourself.

Here you go, I’ve done it for you.

If you look at stock market growth over the last 50 years it has averaged between 10-12%. Yes some years it is much lower or indeed higher (volatility) but the point of investing is to do it over the long term which evens the bumps out.

You have a few years, so you can make good progress. Pay what you can into your pension. Try to make extra mortgage payments to pay your mortgage down sooner, even £100 extra a month helps. Try to live below your means (sounds obvious I know, and not always easy, but every little helps). Best wishes for a comfortable retirement

I'm 47 and have about £150k in my pot plus a small pension from when I worked in the public sector so not great.

I've always paid in, even when I've been a SAHM and skint, even its just a small amount and tbh that's all anyone can do. I currently pay 10% and my employer 10% which I know is excellent and thanks to the advice on here I'll put any % payrise in there and aim for half my bonus too.

OP you're doing the best you can and are educating yourself - that's better than a lot of people.

You are luckier than I am. I was never in a job that offered a pension (mainly I was shifted from job to job by the agencies than help me find a full time perm job) and only now at 44, got joined into one for a part time job. My only hope is that I may inherit one day (but not guaranteed), and I hope to put that into a pension. I think the only way I manage to limit my worry, is to just put what I can in and hope once the children are grown, I can free up some money to put in then too.

Crikey 😮 we are literally just talking at home about me trying to increase my pension- due to our personal circumstances I need to try and put more in

Hmmmmm

You can get a good insight by using a chatgtp type tool. Just type in how much you currently have in your pension and how much you expect to contribute (including employer contributions) per month and when you want to retire and it will tell you your expected pot. You can then change the percentages to see the differences. Compounding makes a huge impact - that’s why it’s important to pay in regularly from an early age.

if you can afford to lock away the money, it’s better in a pension than an isa due to the tax relief especially if you are a higher rate tax payer.

get some good financial advice. I’ve only recently started paying more for managed pension investment but the costs are more than offset by the increased returns.

most of all, ignore all the people on this site who make out like you are ridiculous for worrying and that you have plenty. If you can afford to plan for a wealthier retirement, why wouldn’t you?

Depending og your job there shoukd be pension advice available. In theory in 20 years you wont have s mottgage to pay or childcare etc and that frees up a lot og money. There is state pension at 67 and dont forget the equity in your home. You may downsize. Also you retire snd get a fun job for pocket money

Hope it is useful! The thing that totally blew me away was one of their examples of how compounding works:

If you were in the lucky position to be able to put £10k into a pension (invested in a basic Global Index Tracker so nothing perceived as high risk) as soon as a baby was born and never pay another penny in, the steady year on year growth means that by the time that baby reaches standard retirement age the pension pot would be worth £6,000,000!

Im aiming for at least a £400k pension pot by the time I retire.
I started seriously investing at age 41 post divorce.
Started with 5% matched by employer at 5%
Each time I got a pay increase I increased my contribution by 1%
Im now paying in 10% and my employer 6%
Im hoping that, plus being mortgage free, will be enough for a medium level retirement.

I think you are doing the right things and you are lucky to get 10% from your employer.

It is very dependent what type of scheme you are in and what is the expected annual payout? How far out is that from your annual expenses? The general rule on riterment is 25 x your expected annual expenses = 4% drawdown. So if you expect to spend £20k per year in retirement you need to £500k broadly speaking. If you take early retirement you can take some as a lump sum but this will further decrease your annual drawdown amount. However, if it’s a defined benefit scheme (like nhs, teacher pension etc) you’ll be provided with a fixed amount that never runs out, however old you get.
is your projection based on never putting anything more in, or continuing to contribute at the rate you are? If you still deduce you need more in pension, or want to actively work towards retiring earlier - you need to contribute more. How far can you reduce your outgoings now so that you can spare a bit more money. The most important thing you can do is lower your life expenses, annd in turn you will reduce the anmount you need in retirement. Instead of putting this in pension, you might consider a S&S ISA in index funds. Even if you contributed £100 per month to this for 25 years at average 7% return, you’ll have an extra £70k tax free. Personally I chose to add bonuses to my isa rather than pension as 1) it is technically accessible if I ever want to draw out, pension is not (although I would need to sell shares to obtain cash) 2) most pension schemes are very conservative as they are designed to cover everyone at the start to the end of career, this means that the actual compounding value can be very low if you look into it. Finally you can also look at what you pension is actually invested in, you can chose to change to moderate or higher risk investments until you reach your 50s, then revert back to a more conservative fund.
pension bee and money box will provide you a small amount of free advice on this sort of thing.