So now all I need to do is save up 300K--is this for real?

[Coffeetree]

An article from This Is Money showed up on my feed this morning. Basically someone with £290K in pension pots at 50 years old, asking whether they're on the right track for retirement. The rest of the article was various investment advice. Generally the advice was "You're nearly there."

I read these articles and I feel like someone is playing a joke on me. I usually feel very very privileged in that, at 52, I have a mortgage that I'll hopefully be able to pay off in 4 years, plus about £50K in pensions. No inheritances on the horizon. I've worked in charities my whole life, then became single about five years ago, hence not much saved.

So, after paying off my mortgage, I then need to buckle down and save up 300K? That's not going to happen. My plan is to keep working and then go part-time or contract when I reach retirement age.

Am I the only one who thinks these "retirement advice" articles are really out-of-touch?

Yes but £60k of that will have been contributed by the gvt tax rebate, a good proportion (maybe half) by the employer and the rest growth over 30 or 40 years.

You don’t have to pay in anywhere near £300k over 40 years to end up with £300k pension pot.

Some of the stuff on this thread is great, some is nonsense

For anyone wanting to learn about pensions and finances in general, I recommend Meaningful Money podcasts. Up to date information explained clearly, lots of resources signposted to.

Yes well said. That's really the crux of it!

Some excellent advice on this thread.

Yes, obviously most people don't understand it, why would they? I'm not sure this is the killer point you think it is.

But equally, people who don't understand pensions shouldn't really be using a Mumsnet thread started by someone about their specific issue to learn about it. So here is not the place for this pointless discussion.

People who don't understand pensions need to get themselves to one of the myriad websites written to explain it to them. I learned it before these websites even existed so I'm sure with the available advice on the internet most people can learn the basics.

The bottom line is that people don't need to know about funds, fees, indexes, not in the main higher rate tax relief...... they just need to put money away regularly, from an early age, with a decent provider and check their projections now and then.

People saying "this should be taught in schools" - IT IS!

@IhaveanewTVnow fully agree

The one single piece of advice everyone needs to know is start as early as possible, i.e. Immediately as soon as you start earning, and prioritise it above all else.

I don't agree that this stuff is taught well enough at schools. Auto enrollment was a big step in the right direction at least.

Budgeting and financial planning is woeful in schools, and needs absolutely hammering into everyone. It is possible to be a lower earner and retire outside of abject poverty, but requires a much higher level of education to support good financial decision making.

It's bloody hopeless for many though. And until something is sorted in the housing market, retirement savings is going to remain a huge issue.

Like a lot of non-government DB schemes, they found they had a shortfall in funds for what they would be having to pay out.

For this, blame Gordon Brown's first budget when the Dividend Tax Credit was withdrawn. At a stroke, many company pension funds' stability and affordability were trashed. Long-established industrial companies became unviable almost overnight, especially with M&A activity because the unattractive old tech legacy bits got stuck with the historic pension liabilities too. Because the tax change sounded innocuous and the effects weren't seen for six or seven years, only tax and pension people saw the huge scale of the raid. I think only the FT even reported it the next day.

I remember being told that the best rule of thumb was whatever age you are when you open your pension, halve it and that is the % figure of your salary you should be putting away each month/year. I was 22 when I opened mine and my employer offered a 10% contribution, so more or less the right amount. 20 years later I’m still with the same firm and though the amount going in to my pension took a hit for 8 years while I went part-time due to having kids, I’m now topping my contributions up via salary sacrifice so that the amount going in is equal to 10% of a full-time salary.

As far as I can see, the only disadvantage to paying a lot into your pension is if you die early and don’t see the benefit of that money, though your nominated person will.

I was looking at job adverts on LinkedIn the other day and saw that the House of Commons was recruiting for an Operations Manager with a 27% employer pension contribution 😱

@VanGoghsDog is this your nom du jour ThinkingGoblin? Apologies if not...

And incidentally, rudimentary financial skills are taught, very, very badly, in schools. My Y8s had to plan a holiday weekend away, budget for it, and relate it to the job they thought they would be doing when they were 19. Only three kids (10%) produced a workable weekend. The rest had wishlists.

I have no idea what this means.

@EffortlessDesmond I think what this means is that the poster is suggesting that you might be a new alias for another poster called TG, under a new name.

In that case @VanGoghsDog , ignore me and apologies. A ThinkingGoblin chased me around MN threads last week (how deranged does that sound?). Usernames.............sigh

The bottom line is that people don't need to know about funds, fees, indexes, not in the main higher rate tax relief...... they just need to put money away regularly, from an early age, with a decent provider and check their projections now and then.

This.

I would describe myself as a financial cretin. I'm no wizard. I don't understand most of this shit. But I always put a chunk of money aside for my future self as the first thing I do each month. Standing orders to savings, and to my pension.

Then once every so often (anywhere between 6m and two years), I tidy up those accounts and make sure everything is getting the best rate I can muster. Interest rates have been moving so fast recently and I've been planning my MAT leave, so I've done more fiddling recently. It doesn't take more than an evening.

As a result of this thread, I've tidied up and finalised my investment plan for the next year of maternity.

This is why women talking money and investments should never be shut down by the naysayers.

That is quite generous. I also work for the railways and my wife would get a 3rd of my pension (final salary) for the rest of her life if I die before her.

Oh right. Rude. I'm not.

When my dad died a few years ago I had to sort out mum's survivor pension. It didn't apply to her, but I saw a clause that said spouses with a 20+ year gap were not eligible for the survivor's pension.

Yanbu, the average pension pot at retirement is tiny.

But it also amazes me the number of women who decide it isn’t worth working - pension is one of the reasons that it really is worth it in the long term.

@MNHQ, there's clearly an appetite for sound unbiased financial advice for women. Understand you can't hire an editor to run it, although it would be valuable to thousands of women -- just look at today's responses. Would it be possible to list MONEY above relationships?

I thought that may have been the reason. Thanks for confirming it for me!
I do appreciate that at the age of 40 I have a Final Salary pension, they seemed to have ended for a lot of people long before I joined 18 years ago. That being said though, my company is still advertising final salary pension in the job adverts!

Apologies, I have bored on endlessly on this thread about the importance of pensions. But they are vital. We all get old, some of us with a partner, some solo, but we all need a roof, and food. AND, like it or not, the people who start sticking a few quid into the pension jamjar first will be retiring earlier and on better money than anyone who procrastinates.

I've been paying into pensions ever since my first job.

Each pension is a pittance and together, the forecasts are dire.

What is the fucking point??

Keep track of them all @Gingernaut . By the time you're 63, there will probably be some kind of system that calculates a median value and reconciles all the odd fragments of pensions most people have accumulated but lost.

@Gingernaut I combined all mine into a Nest pension. I lost a tiny amount but it’s been well worth it to take control.

I think I have read most (maybe all) of this thread and haven't seen any mention of the Pension Tracing Service. They did manage to find a couple of pensions for me (ones where I had contributed in the distant past to a company pension but have since lost the details). One of these has the effect of boosting my state pension quite significantly, for reasons I don't fully understand.....

What you MUST have is your NI number.

What they like you to have is your dates of employment and company names. But in fact they should not need these, because they have your NI number, right?

Worth contacting them if you have moved jobs and lost touch with previous pensions, though....

Boosting state pension may (a guess) means that the company had nompension scheme so you were paying full NI and eligible for a pension via the long defunct SERPS (See one of my posts above), but in truth I have no idea! It must have been a long time ago for this to apply!!