100k pension pot at 42

[hlu2]

I've finally checked my pension pot and age 42 it's currently 100k. Putting into random calculators, it seems ok at current money but with inflation in 25 years time, it seems tiny. And yes I should have been keeping up with this more, but I didnt start working until I was 30 (postgrad degrees and two pregnancies) so have only had 12 years of working and saving and with two kids and a house - pensions just didnt seem all that relevant until now. How much does everyone else have around this age?

Reading this thread I'm reminded of how many women lose out on pension contributions if they take a career break eg to bring up children. It's a double financial whammy.

I don't have a problem with people who have a better pension than me (that's basically all of you). I think it's very useful to have anonymous discussions.

I have a pension pot of £0.
In an abusive marriage that has destroyed my earning potential and career opportunities.
Maybe via the divorce I'll get some pension, but maybe not (my OH is French and in France pensions are not seen as accumulated wealth but as state benefits you pay into - so not part of divorce settlements..luckily we're not in France but who knows). I'm resigned to living in poverty and working a job I don't really enjoy until I die. But that's better than living in an abusive marriage.

One reason I think it's important to have open, anonymous discussions is because we can direct our children, daughters especially to them too. We can learn from others' mistakes, others' situations and others' good decisions. Any area that is taboo/hidden is ripe for exploitation - like what occurs when nobody discusses salaries.

I don’t why people are accusing you of showing off, 100k is really not a lot for a pension pot. I have no idea what mine is as I work in the nhs so it’s a bit different, but I would up your contributions.

The point about open discussions benefitting future generations of women is an important one and not one I'd considered.

I can see it only getting more important as the state pension gets put under further pressure - I am not convinced it'll even be there for me when I get there.

@PipinwasAuntieMabelsdog why be so bitter? There are Other People in life who are better off than you. She’s not rolling in it, why can’t she come on here and ask. I’m in the same boat as you, years on a PhD and blew a lot on 2 IVF cycles. Pension is almost zero. Doesn’t mean other people can’t come on and get some advice on their situation.

That was silly to put 60k into your pension. You should have invested it in property so that it could be making you money now.

Anyway, I’ve got 8k and I’m 50 because I made the mistake of not involving a lawyer in my divorce.

That's shit loads when you're on £34k like I am.

£60k is a good salary but people are being really harsh on this thread. Women should be able to have open discussions about pension provision without being shot down by others.

I'm 41 and have £68k in my pot. Not enough…but I’m working on it.

Thank you to those who have tried to answer some of the questions. I think in my case it is general financial illiteracy and not knowing much about money. I still don't really understand what an ISA actually is and my savings are in a current account. That's why am trying to sort it out. I am currently paying around 10% - how much do most people pay?

My partner earns the same as me but I think his current pension is with USS though he has also only been paying into it for about 12 years. Don't think he has all that much in it.

We also havent started saving for our kids etc. So am just trying to sort things out. But we also have 400k mortgage and are scared of it going up once our interest rates go up. So yes trying to be a bit more literate when it comes to money.

I think pensions is a real ticking time bomb, the next generation of pensioners will have very different pensions compared to their parents, in terms of type of pension as well as size.

Under 50s need to be much more aware of this and, where possible, prioritise pension contributions to a much greater extent than is currently the norm. If they don’t, there needs to be acceptance of working until late 60s then living on a little more than £10kpa (at today’s prices).

The upcoming generation (with DC pots) also have to make pension choices, like taking tax free lump sums or not, working out how much to draw down, how often and when to start drawing. That sort of financial decision is going to be a real challenge.

OP you may find this article helpful re the amounts you need to save to provide varying levels of annuity https://www.telegraph.co.uk/financial-services/pensions-advice-service/what-is-a-good-pension-pot/?WT.mcid=tmgofffpscppccdsamoney&gclid=EAIaIQobChMIpJGG2sznAIVRrTtCh0r3QJ2EAAYAiAAEgLvRPDDBwE

You are right to ask, OP. I have more than that and am a bit older, and though I am able to make good contributions and my employer's contribution is also pretty good, it doesn't seem much income per annum to me when you put it into calculators and work out how much you'd need if you live into your 80s or belong.

It's not showing off but a valid question to ask on behalf of everyone. If people who are on a good salary don't have a great pension, how is anyone else supposed to manage when they retire?

I think when Gen X come to retirement and generations after (not that far away for the older end) a lot of people are going to be in poverty or have to carry on working until they die.

Is that what we want as a society?

Not necessarily- investing in property is very heavily taxed compared to pension contributions

Ignore those on a race to the bottom.

What percentage do you contribute each month? I do the max - 8% - and its a whooping amount but worth it as its employer matched. Can you increase your % amount?

Depends what you want in retirement really- they normally suggest about 2/3 of your gross salary should be equivalent to your retirement income if you want to keep the same standard of living. I believe this presumption is based on the fact you will have paid off a mortgage and not have additional lifestyle costs (I appreciate some may rent so it isn't a one size fits all).

For a ballpark figure, you want to contribute half your age as a % of salary into your pension when you start contributing. This takes into account any contributions your employer makes, so obviously the earlier you start, the lower the % as it remains static through your lifetime.

On a 60k salary with 3k contributions, it sounds like you are only contributing the statutory minimum of 5%. If your employer only contributes the minimum of 3%, I would recommend upping your contributions if you can afford it. If your employer actually matches up to a higher amount, I would say to max out what they would match to as ultimately it is free money.

As others mentioned, if you live with a partner and they earn less than 60k, pension contributions will also reduce your taxable pay for calculation of child benefit clawback, so can be really tax efficient in that sense.

WTAF? This is batshit.

This
What others have is irrelevant, why ask?
A £60 salary, ability to save £40k in 12 years and £60k inheritance are all unusual/ above average so I don't see why you are looking to compare with others...

Speak to a financial advisor.
The amount you need to put in will depend on what you want your retirement to look like and when you want to retire.
As a higher rate tax payer you should consider that every £60 of take home pay you divert to your pension will actually be £100 going into the pot as you'll get the pre-tax amount put into your pension.
Once we'd paid the mortgage off I started slamming money into mine.
My employer pays 8% and I put in 50% of my salary. This is particualry useful as it drops me down a tax bracket for the remainder of my earnings.

50 k in pension pot

60 k in stockand share pots

House 110 k equity paid off in 4 years then that money spilt between isa and pension

It's a good thing been able to tall about and to show your children in the future

@ArcticSkewer As I said I am poor with only £150k but I now put at least £20k a year in
I had absolutely no issue with the OP telling us how big her pension pot was, and in no way did I consider it a stealth boost.
However anybody who can spare £20k a year to put aside, should not be using the word poor in the same sentence.

Following with interest, as I'm 30 and just started putting money away for my pension.

Would a financial adviser be useful at our level? I thought it was mainly for those with large pots of money. In our case, we dont have much money and just have a massive mortgage

We are also trying to balance paying into a pension, paying off our 400k mortgage and having day to day savings. Pensions tend to slip below the radar hence am trying to get a bit better at figuring them out

I can't remember what I had at your age OP as I am somewhat older.

I think it is important to discuss this despite others trying to close your discussion down. If women talked more openly about pensions and investments maybe there wouldn't be as much pension poverty going forwards and a realisation that not prioritising pensions can be detrimental especially if they choose to give up work.

100% agree with this, great post.

And FGS some of the replies on here! Unbelievable. 😕