Is anyone going to be living just on state pension when they retire?

[Shinyseas]

It looks like I will be. Never really earned enough to put money aside for a pension, married someone who was terrible with money and at the age of 51, have youngish DC so even though I’m earning better money now, I’ve got to get them through teenage years, then off to Uni. All feels too late to save anything decent. I’ll be early 60s before my youngest leaves home.

When I checked this week, my private pension is set to give me 1.5k a year 🙁

People do survive on the state pension I know - but it must be very very tight.

More like teach your children that the old saying in your 20s go party, travel and spend all your money isn't the right thing to do. There should be a balance and even after uni putting £20 a month into a private pension will over time comound into a significant amount.

It sounds to me like it should be an old fashioned "all hands on deck" with the family.

When I was young my parents divorced durning a long, hard recession. From a youngish age (12 for me) we were expected to work during school holidays, and hand the money in to the comunal pot. We were under no illusions that times were hard. With great creativity and ingenuity my mother gave us an "expensive" upbringing on a shoestring.

I have lived in many countries since, and notice that a lot of cultures do that. Indeed our own did in the past.

Get the kids on to it , and get really agressive about saving, . Sit downs once a week on what is coming in, what is going out, and what is needed for the future. Your children will get a very good education in money management (if you do not present n a catastrophic way). You are only in your 50s. It is not too late.

This website is very useful in recallibrating your relatonship to money. It is US based but nevertheless very worth while. He spends a lot of time pondering our relationship with money and takes the emotional bent out of it. It may inspire you!

www.mrmoneymustache.com

Theres a government website you can sign in to and just enter your national insurance number in.

1.5k is huge compared to my £300 a year, I was the same, single Mum not earning alot of money, so managed to pay the absolute bare minimum, absolutely shit. I wish this was something that had been talked about when I was younger

I can understand why people don’t pay in, when money is tight it can feel unimportant to put money aside for the future that is so desperately needed now. I’ve always had one so I’ve found it easier, I haven’t missed the money because I didn’t have it in the first place. If I had to lose what I pay into my pension fund now when I’d had that money every month I’d feel quite reluctant and would question whether I could afford it.

I’ve been very fortunate in that I was encouraged at 18 to take a company pension when working in financial services and now at 32, I have more in my pension fund that one of my parents who started there’s later in life.

it’s worth looking at how your employer contributes to your workplace pension and whether they match your contributions if you increase them. I recently increased mine by 1% because it meant my employers contribution increased quite significantly so meant I had more going in without needing to pay that much myself.

something in your pension fund is better than nothing and it may be worth looking at what risk category your pension fund is sitting in. Usually goes into lower risk investments the closer to retirement you get, but if younger you can put it in a higher risk investment because you have time to recoup any money lost, if it is lost. If you are concerned it may be worth seeking some advice from a pensions advisor who can guide you through it all and help.

DH and I are 37 and 39 years old so both of us have our pension age fixed at 68 at the moment. DH is off work at the moment due to Cauda Equina requiring one disk in his back to be removed and a second one shaved. His work have stopped his sick pay now as he’s only been in his current position since January and has only worked with this company since last summer. Thanks to covid I now have a zero hours contract in retail though I continue to look for a permanent job with guaranteed hours. We do worry what will happen when we reach pension age as if a state pension exists it may well be means tested by then. I have a company pension with about £47,000 in it at the moment but at the moment I can’t afford to continue to pay into it and DH is looking to combine his company pensions as he has three of them but none of them have a huge amount in them. I am wife number two and DH didn’t start saving till he met me aged 33.

I have been lucky,even though I didn’t understand much about pensions when I was younger I joined every scheme I was offered plus unknown to me I was entitled to an Army pension and now I am reaping the rewards,receiving £1,500 a month.

Check this out. www.nerdwallet.com/banking/calculator/compound-interest-calculator It is still worth putting your £100 a month in.

Over 10 years that will cost you £12000
But you will get tax relief (so £120 will be invested) And at a c5% compound interest will turn it into nearly 19K.....

Also, if you are getting your 1.5K pension from a defined contribution scheme, do no look at annuity rates - they are AWFUL at the moment. There are better investment/income options - even if it is just draw down.

Me! Don’t own property, privately rent. Will be on mercy of all and sundry when I’m too old to work (which will be never). Nothing to look forward to.

I just don't plan to live that long.

Dont understand why people are worried about putting their kids through Uni? I graduated just over 10 years ago but I barely cost my mum a penny. I lived at uni accommodation, got a student loan to pay for my course, worked part time and got a summer job abroad in the summer break. Are all the other parents paying for their children to go or something?

If you own your own home, could a lodger be an option to supplement your income? I know it comes with its own problems but it could also work the other way and it might be nice to have some company.

@Rhodora Empathise about Covid, was a shit show for us too. DH retraining in civil service, 30yrs work left there is still enough time to get a decent pension if you switch career.

If you can delay your retirement for a couple of years you will receive more. If you currently work full time you could reduce to part time - as long as you still pay NIC. for every 9 weeks you defer your state pension you get 1% more

My DM is 82 and only has her state pension. She doesn't drink, smoke or drive and is very comfortable financially, in fact, she says she's never been as well off in her life. I guess it's all down to how you manage your money.

Yep v similar position and there must be loads of us - who, like me, worked part-time in the dependent-children years, so no occupational pension. I did start a private pension, but with the hefty charges eating into the contributions it really doesn't amount to enough. Yet another disadvantage of being professionally compromised by having a caring role in our society: undervalued, underpaid, under-recognised. Time maybe to revolt!

Or what you’re used to.

This year it's £275 a week for a couple (if we've no mortgage we can definitely manage on that)

A lot more than families and young people get on benefits

(It's not a race to the bottom, all should be adequately compensated financially to live in this wealthy country)

To be honest, I never really see the benefit in having your own pension unless it's worth hundreds of thousands. My mam lives off state pension and it's far more than she needs. All she has to pay out is for food and bills, and is far better off than me working full time. I've got the basic pension that everyone had to start up a few years ago, and it won't be worth much at all by the end of it. I might be misunderstanding the whole thing as I'm not that clued up on economics, but I'd be happy enough with state pension as it stands.

This naive thought process is what lands ppl in trouble later on in life. The retirement age is increasing to 68 for those born after 1977 and they are more than likley to increase it again.

Knowing they are facing a potential disaster of not being able to fund state pensions, the likehood of receiving a decent amount is not very high. They could also introduce means testing as another way of making sure they can afford to give state pension.

Putting even that aside, what if not fortunate enough to even work up to 68yrs old. What if you have to retire early, what will you live on then? Esp if its for health reasons which will likely reduce your ability to work.

End of the day your rolling the dice if you cannot see the benefit of having your own pension. At least if you have your own and you need to retire early for whatever reason you have a personal pension to drawdown on early.

As for parents if they are smart enough and can afford to do so they should really consider saving from the moment their child is born even £10

But that is exactly why I am saying it must be non optional, from the start. No one say they can’t afford their tax or NI do they? Pension contributions for future generations should be money you never had.

That is a very good point. People are quick to point out that the state pensions in other European countries are higher than the UK.
But people must be paying for it somewhere via higher taxes, either direct or indirect. For at least the last 30 years the UK Government has pushed and encouraged private pensions.

The state pension is unsustainable, I'm in my mid 30s and I am not banking on receiving anything. I am putting money into a SIPP but I am also expecting to have to work longer.

If the cost of living keeps on rising and the triple lock rise continues to be suspended/is scraped then it could easily become impossible to live on the state pension alone. At least many people of current pension age own property and have the opportunity to downsize or release equity but those who are younger who haven't had the leg up in wealth building from cheap property are going to be screwed.

State pension is around £180 pw, so if you're not paying rent you'd be ok, or you would have been before the incredible energy cost rises. Pension credit is available, means tested. It's too late to worry about it now, just be as frugal as you can (says she, sat under a throw).

I think about this all the time. I cashed in my two small private pensions during the pandemic to keep me and ds going as my business was precarious. So I would have had £180 per month on top of the state pension. I am planning to give up driving when age 67 as the local bus and train looks likely to remain very good. I am 58 and continue to run my business until then. I will either continue in my business one day a week health permitting or find another alternative. There are only 8 years this November left .....