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?

Oops 😳 That was what I was trying to get at but got my terminology mixed up.

Starting a pension at 24, or earlier if possible, and paying £400-500 per month into it (personal and employer contributions) should yield a decent pension in retirement. It was a sound piece of advice my Dad gave me at 21.

But there are loads of 24 yr olds who don't have hundreds spare a month

Totally out of touch. We have paid off our mortgage, have no savings because we've never earned enough to save. DH retired, I'll be working til I'm 67. It's probably a Tory that's come up with that figure.

i moved into the public sector to get a better pension. It's much better than many private ones but annoyingly the scheme was far better historically.

He's 64 and retired with a 26K final salary pension (but we got 140K lump sum).

I'm 47, earn 77K and literally have just paid off our mortgage this weekend.

My current pension pot is about 40K but that £1500 per month is now going to be going into my pension for the next 20 years. By the time I retire my pension pot should be about 600K.

We're both ex working class (My mother was a school cleaner - Dad died 20 years ago but worked for BT). Hi parents were cleaners and labourers.

The current system does not only work for the super rich but also for people who graft and work hard.

It's not really the current system if your DH has already retired though is it? Things are very different for todays 20/30s yrs old.

Agree that the people with big pension pots haven’t stolen them despite what people here think. In most cases, they’ve made sacrifices to achieve them - older cars, no/modest holidays etc. They’ve saved for the proverbial rainy day.

The people I know with big pension pots just had excellent schemes eg final salary. These have really shrunk over the yrs.

Where I worked the final salary defined benefits scheme I am on was closed around a decade ago. The defined benefits scheme that replaced it is certainly decent but not as good, the sick pay for new employees is also not as good. So that organisation has a two tier system.

Yep, the scheme changed whilst I was at uni so not much I can do about it.

As a teacher in my forties I have lost count of the number of staffroom conversations I have had with 20-something colleagues who are considering opting out of the Teacher’s Pension scheme, or have already done so. After student loan repayments and pension contributions many simply can’t afford to live unless they are still at home with their parents. It is an absolute timebomb.

I know teachers who have done this & Im like it's an amazing scheme. However they are trying to save up to get on the ladder & reduce their rent costs & insecurities so I do get it.

had no where near that maybe 100k we didn't invest it took the lot as a lump sum paid tax but got it back the following year we are taking it out bank locking in a safe then no government or care home needs to know what we have

So if everyone does this who pays for care that is needed?

We definitely need to educate the younger generation on pension schemes. My new student placement asked me how to contact payroll because she opted out of the pension but they'd deducted it. I asked why opt out, she assumed if she left this job she would lose the money.....

I’m 47 and I’ve had some well paid years and some where I wasn’t working at all after having the kids. I’ve already earned full state pension and my main pension had about £70k in it. I’ve taken a riskier route than some would be comfortable with but I’ve moved it to a SIPP and invested into a company’s shares that I strongly believe will go up significantly over the next year and beyond, with the hope it will then be more than enough to comfortably retire in the future, it could go up 6 times it’s value or if things go really well then it could go up 17 times it’s value, although I would probably cash in before then! I’ve also got another work pension with 20% pa going into it, DH has large pensions as he is well paid (from a very working class back ground which just goes to show you don’t need family money to start you off etc). We will however inherit some money though eventually from parents houses and we will clear our mortgage by 62 and could easily downsize when the kids leave home if we wanted to. Hence me feeling happy taking the risk with my SIPP, not that I feel it poses any risk because of all the research I did!

@Loopyaboutmy2boys don't you need to have 35 yrs of NI contributions?

Actually if I were you the best option would be to put as much ad you can now into your pension in order to get the full power of compounding. You can slow down your mortgage payments in order to ensure it is paid off before retirement. Look at calculators to see how much pot if you invest now. Will be interesting to see the comparisons

I started paying NIC’s at 16, I need 2 more years after this tax year but I have a child that I am getting NIC credits for the next 6 years which means I could quit work tomorrow and still get a full state pension at 67

I, part time librarian and my exhusband, teacher, in our 20s, consulted a financial advisor, he said he couldn't give us any advice, as he didn't know how we were managing to live week to week, with mortgage, small child and running a car, and couldn't find any spare money to put into a pension.
50 years on, divorced, remarried then widowed, my mortgage is paid off, I get state pension and my local goverment pension of £85 per week after tax! There is no advice for people like us, we just have to manage the best we can, as I have always done. I do not consider myself deprived, because I haven't got a pension pot worth £500k, I have everything I need, as I don't need much beyond food, good company and time to enjoy it.
Make what provision you can, then don't worry, is the only advice needed and it doesn't take expert knowledge to give that.

Is your pension working for you?

Realistically you'll need much more than £50k. You need to seek some advice on how you can grow it as much as possible in the next 15years. Once you pay off your mortgage then you can add that to pot and make sure it's being properly invested.

But the advice you read was in response to someone who wrote in with £290k.

If you want specific advice because you have £50k, I'd think you'd need to write in and ask the question.

Unless I'm missing something here??

The 35 years of contributions only applies to people that starred paying after the changes in 2016. For anyone in their 40s already it wouldn't apply.

Sorry if it's already been posted, I did have a look and couldn't see it. might be worth a watch. DH and I organised our pensions a few years ago. Wishing we had done so earlier, I set up junior SIPP's for our children with Hargreaves Lansdown. I only pay in £20 a month each, which gets topped up. But it's more about having one open and general financial education for them.

Correct, and so if it wasn’t for the fact I had 3 years where I was contracted out I would have already achieved the required number of years by 5/4/23, but as it is I technically need this year and 2 more years but I have it covered regardless by credits for having a child under 12. If I won the lottery I could retire tomorrow and would have a full state pension regardless 😁

There are opportunities, in any market, but a person needs to be on the lookout for them. I posted many pages back about how we did our SIPP (commercial property investment, ie landlord, not residential). Twenty years on, it pays the SIPP (not us, because we are separate legal entities) over £40k pa and we are not drawing down any income. It paid off the 10-year commercial mortgage in eight years, so every penny of rent, apart from any repairs and the fees we have to pay, is building up as cash: now interest rates are positive, there's several £000 earning interest, tax free. Our DC is a member and while it will be 40+ years before taking a pension from the fund is an option for them, and they will have to look after the admin in the meantime, there will be a sensible fund for their retirement when needed. Because it's a trust, it's not part of our estate when we die. But HMRC is eyeing up ways to tax it.

As a very small business, a SIPP is a good way to structure a pension if you are paying rent for your business premises. Buy a property that works for you, rent it to your business and the rent payment goes into your pension fund. You can develop it further if you want to expand, increase your rent if your profit allows, and you are paying into your pension every month. And the SIPP can make other investments too. It could buy shares, or more property, and develop a second or third building to let out, using commercial finance. When you want to retire, you can take 25% of the pot as a tax free withdrawal up to £268k per person over retirement age.... once. Our little building is worth a modest sum as bricks and mortar (it would cost more to rebuild it) but the income stream is something a bigger enterprise would pay for.

On the other side of the equation, we personally bought a tiny plot cheaply a few years ago because it was the last one and we knew the vendor. Its value has increased, so now we are considering selling it to our SIPP at its increased value (from us to us) before we develop it via the SIPP. I still think it's beneath CGT limits given the years we've owned it, but it's also delaying taking money from the pension for another year.

I'm astonished that people think they need so much money when they are retired. You will get almost £900 per month from the state pension, and people will either have paid of a mortgage and therefore have no mortgage, or if they have rented all of their lives, they will then be eligible for housing benefit. Add on energy payments and council tax benefit.....Once I've paid my rent I spend less then £1000 a month now!

Was the subject a parent? A solo parent? A woman?

Calculate the % more men have been earning, calculate cost of childcare…voila £290k pot!!

@EffortlessDesmond Our commercial property purchase was our best ever investment, and now our company isn't occupying the premises, our tenant makes a decent contribution each year into our SSAS. Thank God we listened to our accountant. Makes up from the shite returns on our IFA advised investments over the past six years!

Everyone's expectations though of retirement and life are different. I am retired and go on several long haul holidays a year. Food and the day to day costs amount to more than 1000 per month without all the rest. If people are happy to accept a certain life standard then fine but plan if you want more.