Pension worry…help

OP I'm sorry there has been some hijacking of your thread by people who seem to want to rant about something else; but there has also been a lot of useful and constructive advice on here, so at least you can separate the wheat from the chaff 😉

https://www.gov.uk/find-pension-contact-details
This might help you to start tracing them

There’s some great advice on here, and you’ll be ok OP because you are thinking about it now.

We are headed for a real shitshow though, where public sector workers with DB pensions will be rolling in it, those who have been investing in their pension for decades will be ok, and those who have been just getting by in their working will be impoverished in their retired years.

I’m in the middle category- have been really abstemious while we work so that we can build up a decent pension pot. It’s really hard to feel that we have ‘enough’ put by in a pension, even though we have a lot as it was a priority even in first jobs. The cost of living shooting up makes you feel like you can’t trust the money to hold out.

£25K a year is extremely generous. You know the State Pension is only around £12K (about £1K a month) which is what most people have.

Look at what your pension is invested in and see if that is the best one for you.
There should be a selection of portfolios your pension provider offers and you should be able to pick between them. Typically they invest in something that earns them a bit more but not necessarily the best one for you so look at all the options.

If you have multiple pensions lying around from old workplaces, open a SIPP account (pension that you manage) and get them all transferred into that. Here you can pick what to invest in. You will need to do your research or get professional advice but something like an index tracker should be simple enough. (For example FTSE 500 ).

The only rager person on the thread is you. No trace of it from the OP. What chip do you have on your shoulder because it’s clearly weighing you down.

Not sure if anyone has mentioned this but I would highly recommend speaking to a financial advisor. I only found out recently that you should put your pensions into the highest risk you are comfortable with - yes even at 40. You still have 25 years of work and your pot could grow significantly more. As you move closer to retirement age, you reduce the risk. But at the moment things will go up ultimately in 20+ years. A financial advisor for pensions is worth their weight in gold seriously!

I find this site useful. https://www.retirementlivingstandards.org.uk/

You have quite a while to go to boost it so I wouldn't be too concerned at this point just keep putting bonuses in and examining it every year with your statements.

As you hope to career progress and salary look at changing the 5% this especially helps with if you fall into the higher rate tax as actually what it costs is way less with the 40% tax relief.

Any pay rises I get I increase my pension contributions by that amount as I am already budgeted to the salary I was on a few years ago so I don't notice it. Its an easy way to boost.

Almost guaranteed there will be no state pension at some point in the future, except for those with nothing else to live on..

In other words it will be means tested and only those with absolutely no other income will get the full amount. No one with a couple of decades to retirement should expect to receive it.

You can go on Pension Bee and use their calculators. Ultimately though you’re going to need to start socking away a substantial amount of money each month into your pension. I recommend getting advice from a pensions advisor. Someone who is trained, understands pensions and the options open to you. This is a regulated form of financial advice and the best option.

I personally wouldn’t be worried.
You tend to find as you get older you get more disposable income and also earn more. When you do start boosting pension then.
ive know people start a pension at 50.
I think you’ll be fine.

Agree. OP, MN is not the best place to post about things like this.

Try the MoneySavingExpert forums, generally really helpful bunch on there.

Check what your pension is invested in. The default funds are typically not great in terms of returns. You should be able to choose your own fund. The Meaningul Money podcast is worth a listen. You need to make the money you have work harder.

But broadly if you're not going to retire for 20 plus years and aren't going to freak out about it moving up and down, then a passive global equity tracker is often a good choice. The key is not to look at the value too often as it can be unnerving with market movements, but over a long period it typically gives very good returns. E.g. lots of people were freaking out with the Trump tarrifs as they hit their pension values, but they've generally more than recovered since.

"First world problems" are valid problems. No need to jeer at them.

Everyone at every age should be looking at how to finance their old age needs and wants. You can't recapture the value of time when it comes to investing.

It's all relative to your outgoings and what income you've become accustomed to. You say it was at 25k pa when you last checked. That would comfortably do me with no mortgage to pay. There are expenses that come with work that may be reduced when retired too such as travel costs. If you have DC or a large house, downsizing when you retire could bring in some extra money to add to the pot. You still have 27 years, I wouldn't be worried in your position.

You’re honestly doing a lot right already 👏
Regular contributions, solid employer input, income rising, all great foundations. At 40, there’s still loads of time to make a big difference.

Even small increases to contributions or reviewing where your pension’s invested can have a huge long-term impact. Try not to panic about the headline number, it’s the overall plan that matters most.

You’re on the right track, sometimes it just takes a bit of clarity to turn the worry into confidence 💪

Open a stocks and shares ISA with a low fee platform such as Vanguard or Interactive Investor. Save what extra you can each month and try to build up the fund.
Watch "The Rebel Finance School" on You Tube for more information about the strategy.

Check out rebel finance school- this has been instrumental in me understanding pensions and my finances, what I can do to increase any savings, make changes to my existing small pension for the better and focus on what I want to achieve in retirement- I also have a small pot and started late as I just didn't get it- but really want to make sure I add what I can now whilst I can! Good look OP, never too late to make positive changes.

Totally understandable and a huge failing of our education system. Few people understand the true cost of defined benefit schemes that rise with inflation (never mind the triple lock).

As OP says she expects to have £250 k at retirement and modeled drawing a State Pension–sized income - approx £12 k/year. Sounds like a lot!

At the end of 30 years, based on that drawdown, that pot would be empty.

And... what will 12k buy in 27 years... if inflation is 2.5% per annum (and it's been much higher than that) then the state pension will have risen to 30k by the time OP is of age.

Her 250k pot will only be adding a third of what is considered just enough to live... She'll be another person talking about how she's worked all her life, saved and only has a small private pension on top of state (if it even exists) and can't really live.

It's a ticking time bomb. People keep imagining today's money will be enough tmrw. It won't.

I have a tiny pension pot,and at 59 there's little chance of it growing much! What I did was pay off my mortgage as soon as I could then downsize to free up capital for a rental property. The rental property is basically my pension. There are plenty of ways to bump your income.

Pensions generally grow with inflation if invested well though?

The tricky thing atm is you can't rely on stock market growth. Inflation is eating it away.

You need to just stash away as much as possible, its the only way really. Look at what savings you can make in day to day life to get as much saved as you can.