If you’re 40s/50s with no pension...

[ginandbearit71]

Can I ask, what’s your plan?

I’ve never earned enough to put into a pension - and it can’t just me me! Apart from slowly withering away on the state pension, what do other people do?

I own my own house but still have a relatively large mortgage on it

Some folk cant help themselves can they?

I think downsizing, moving to cheaper areas

I'm 46 and my private pension provision is pitiful. Three years ago, we sold up in the SE and moved to the NE, so we're almost mortgage free. It was a massive upheaval with 3 DC's, but absolutely the right decision for us financially. Yes, we lost our entire support network, but our quality of life has improved beyond recognition - and we've got financial security.

Being able to move to a cheaper area is what I’m relying on. The idea being to release some cash from the house I’m currently in. Beggars can’t be choosers but having a small lump sum isn’t the same as having an annual income. Interest rates might still be pitiful, so it’s basically eating up precious savings year by year. Also, leaving all your friends and network behind when you’re getting on a bit doesn’t sound great.

I’m 49 and the options seem so limited. Even if I could afford a pension with highish payments, it seems far too late.

I expect to work as long as I can, probably 70+

We bought property as it has increased more than a private pension would, and I don't trust them anyway.

I think a property crash could well be the result of the current crisis with the amount of people who'll be made redundant or put on very reduced hours. The stock market has already crashed 30% - no reason to think the property market will escape the carnage. This time, unlike 2008, the govt may not be able to prop it up.

Im very lucky as I have a small private pension. My DH will only get a state pension. I've just retired as I'm older than he is and we will both get our state pension at almost the same time. We downsized 3 years ago, when I was still working full time, and have done the new house up to a standard that means it won't need anything substantial doing to it in our lifetime, save installing a stair lift 🤣. We are also mortgage free.
We shall have enough to live on when both fully retired, but not to fund cruises or a holiday home in Spain.

User149 When the markets crash people invest elsewhere eg property, art, wine etc. There won't be a property crash as demand is outstripping supply in so many places, and so many foreign investors. Everyone said there would be a Brexit crash but after the election the opposite has happened and the market is very buoyant. It may slow somewhat because of the virus but there won't be a crash.

I have certainly experienced property crashes - I always seem to have the worst time in the UK of anyone for these kinds of things but it all seems to be fairly okay at present regarding property after the recent drops in prices in London although I expect anyone relying on airbnb currently has seen a massive drop in income due to the virus.

Just wondering how a thread aimed at people with no pension, ended up being side-tracked by posters who have pensions, mortgage-free houses, buy to let properties or holiday homes?

I'm sure reading about other people's financial preparedness will be a huge comfort to those who may have clicked on here in the hope of some good advice, or a bit of dark humour about never being able to afford to retire...

I have no pension - my income was very precarious through my 20s an 30s and until recently.

I have my own businesses which don't make me a huge amount of money but enough at last to save a bit, and some of my consultancy work is stuff I can do, and do well, until I drop dead. So I hope to get by that way, and potentially let out rooms if/when the children eventually leave home. I recognise I am a lot more fortunate than many in some regards.

I cashed in my private pension (no employer contribution ever) at 55 to give about a third to HMRC and rest to the children for housing.

With respect, that decision was ill-advised. Will your children have to help support you in the future as a result?

I'm somewhat relieved I didn't chuck a load of ££ into pensions, given the fact the stock market has nose-dived. I do have a couple of sums that at last quote would give £1k each per year but that would barely pay the phone bill by then I imagine.

Luckily paid mortgage off and can downsize to leave sufficient funds to cobble together a lifestyle of sorts, but I expect to work till I die - my life expectancy based on female line in my family will allow me 1 year of retirement on government pension (have paid full contributions) .

I'm somewhat relieved I didn't chuck a load of ££ into pensions, given the fact the stock market has nose-dived.

Markets are cyclical and recover. When you are nearing retirement the usual advice is to switch your fund into government bonds, which are more stable than equities. Don’t let ups and downs in the stock market put you off investing in a pension.

OP you said that your plan was to overpay the mortgage. I can see why you would think that is a good plan, but you’d be better putting some money into a pension. Tax relief at your highest rate then the money can grow over ten years.

My post was to illustrate that for a lot of people even paying into a pension is not enough for a reasonable lifestyle.
If over the years if you have any spare money, it can be invested. If a person can say overpay their mortgage, save a little, pay into a private pension. Even £10 a month in each helps, especially if done early enough.
Most can choose to do something rather than just collective moaning.
Read up about finances, look at your potential, make a plan. Lots of possibilities. If you're 40 you've got 27 years! That's a long time to do nothing.

We're mid 40s with a big mortgage and no decent pensions so beginning to worry a bit about what will happen when we retire. I have about £3k a year from my teachers pension before I had the kids, DH has about the same after years and years of a rubbish work pension. Unlikely to inherit as parents have conditions that mean care homes are likely. However, we are hoping to clear the mortgage before we're 55 so hopefully down the line we can downsize to free up some money. If we had either a big mortgage or no decent pensions it would be less of a worry. That said, we are incredibly lucky to have a mortgage to pay off and a home that we'll own as I know a few people renting privately who are incredibly concerned about what will happen when they retire.

My post was to illustrate that for a lot of people even paying into a pension is not enough for a reasonable lifestyle.

Even £10 a month in each helps, especially if done early enough.

You are contradicting yourself. On the one hand you’re saying, ‘save into a pension like me and you won’t be able to afford a reasonable lifestyle’ and on the other, ‘saving £10 a month into a pension helps’.

£10 a month into a pension will help, yes, especially whilst shares are on a 40% off sale as they are at the moment! But telling people that they cannot expect a reasonable lifestyle if they save into a pension like you, with your second home and buy to let house, really isn’t helpful.

We’re all living longer and so we’ll need to work longer for a comfortable retirement. The amount of comfort can be increased by contributing to a pension. It is never too late.

Doesn't some of this depend on what you mean by 'reasonable lifestyle' and comfortable retirement'? For some it might mean enough to pay the rent and bills and have a bit left over to buy presents for the grandchildren. For others it might mean the ability to go abroad three times a year, own a second home and spend lavishly on the family.

I'll settle for being solvent, never mind 'comfortable'. But simply being solvent is more than a lot of people are going to be able to manage. Not having the stress of worrying about bills is a 'comfortable lifestyle' for me.

Iamthewombat
Yes carry on arguing if you want. I cba.

I'm making it simple:
Do as many things as you can/want to over as long a period as possible.
Doing nothing (if you have a chance to) and yet whining isn't going to help you retire.

A bit touchy because you’ve been called out for (1) boasting and (2) attempting to explain away the boasting with an excuse that makes zero sense, are you?

" Iamthewombat Mon 16-Mar-20 12:17:22
"I cashed in my private pension (no employer contribution ever) at 55 to give about a third to HMRC and rest to the children for housing."
With respect, that decision was ill-advised. Will your children have to help support you in the future as a result?"

Iamthe, I am very special case. I agree that for most people that is ill advised. I am a high earner and annuity rates are poor. Most of the children or will pay 40% tax+ so even if the pension were left to them on my death they would pay at their highest rate to access it. I also just wanted to help them with property now not lave them money when they are over 60 (there are only 22 years between my daughter and me).

Obviously I hugely helped the state with loads of tax so to that extent may be I was putting the state's needs and those of the poor before my own. But leaving aside the altruism of such a decision I will pay high rate tax on my earned income (self employed) until I die just as my father just about did - he paid 40% tax on his pension income in payment and died after drawing it for 4 years. Secondly I don't trust the state on pensions so just wanted to get the cash out whilst there was still a 25% tax free lump sum - that could easily be abolished later.

Thirdly if my brain goes (the only way I would stop work) my house is worth a fair bit so that could be sold to keep me.

Fourthly average age for women in my family over last 100 years is 66 and my mother made it to 75 only so I very much doubt I will have a long period when I can't work and need more than the state pension.