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?

Nice! My friend just had a baby, I will advise her about this!

My mother is in her early 80s and spends an average of about 600 - 650 a month in London (zone 5), in a 3 bed semi, alone (our former family home).

She owns the house outright, does some basic maintenance on it. She had to renew the heating system which was a big outlay, so you would want a savings buffer (50k?) for at least these things.

She has a free bus pass so does not use a car. She shops in her local ALDI and lives pretty well.

She managed all of this on a state pension and even saves money every month. So, no, I don't think 300k is necessary IF the state pension system continues to function. Probably then ideal to have paid off your house and have 50-100k savings if you can manage it.

Many unknowns there: inflation, interest rates, the overall financial system.

I would say just save as much as you reasonably can.

No, but I think you are reading advice pitched at people in the <30 age bracket and taking it personally.

My only pension plan is death, and I'm not joking. After clawing my way up the career ladder later in life, renting for 30 years and not marrying for money, I'm stuffed.

Yes, you're absolutely right.

What happened? Did you not get anything from the FSCS?

@PineConeOrDogPoo that ship has probably sailed now due to her age, but your mum would have an even nicer retiement if she doansized and relased the value of her house.

That is probably something more people will have to do as a retirement option in future.

I joined a workplace pension at the first possible opportunity 20 years ago, and I’ve paid in slightly above the minimum % in both jobs. I still only have a 50k pot.

Both companies I’ve worked for have had 600+ people, in those companies only around 10 will pay in more than the standard contribution (4% employers, 4% employee) so I don’t think my pot is especially low. Unless they all have private pension pots but I doubt that. Lots have opted out altogether.

For me I’ve decided that around the age of 80 my cost of living will be minimal. I doubt I will be going on holidays abroad and I probably won’t have fancy meals or cars. So the state pension will probably do. However the period from retirement to 80 I will need a decent income. I want to travel, I want to eat out. I will need a new car in that period etc etc. So the period of 67 to 80 is 13 years. Say I need £25k a year after tax (remember you may have state pension on top of the £25k) then that’s £25 * 13 years. So £325k is required for that period. Obviously someone may have a house, could they downsize and release some money into the £325k pot? If you want to help the kids with a lump sum then you need to add that to the £520k. Obviously this takes no account of the impact of inflation so £25k now will not be worth £25k in 13 years but you could allow for that. But what this does is give you a plan as to what you need in pension, savings, equity in your house etc. But it is simplistic before anyone jumps on me. But it has made me realise that I don’t need to budget to have lots of money when I’m in my 80s.

I've been paying into pension pot my whole.working life. I looked at my future projections recently and it hardly seems worth it!

My plan is to continue to work part time once I've retired and not live to a ripe old age 🤷🏻‍♀️

I think the bigger point is that until recently not everyone started paying into a pension from an early age, hence auto enrolment was brought in. I still have a number of friends (mostly female 😔) who have little or no pension provision and are relying on their husband’s pension to fund their retirement. This is risky.

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.

I have a CS pension of nearly 20 years, I have about £40k in it. I retire shortly. Who the fuck has that kind of money in their pension? Certainly not anyone I know. If you started saving as soon as you started work (back in the 70s there weren't private pension schemes for the average person) and had a bloody good job maybe.

Pisses me off.

Which provider do you use for children’s pensions?

Yes, five years ago my retirement plan involved sharing my husband's pension and living in the mortgage-free marital home. Oops.

Op, will you downsize at some point? Me and DH are only in our thirties, and still have a long way to go on our mortgage, but our plan is to pay it off (one day!) And once the kids have flown the nest and got themselves settled, we will downsize from our four bed to a lot smaller two bed, and free up a lot of cash that way. Our house is currently worth about 400k, obviously with house price fluctuations, I can't predict what it will be worth in 30 years time, but I do hope that at some point we can sell, and buy small, and free up at least 50% of the value of our current house. That will make up a huge chunk of our pension. DH earns well, saves hard, and has a good pension scheme at work that he overpays into. I work part time (but as many hours as I can!), while bringing up the children, and don't really have spare money to save. In the current climate, I doubt many families are managing to pay in enough money to make those sorts of figures realistic. Some are barely getting by each month.

stop perpetuating oppression for younger women & girls.

I had no family connections, was first to go to university, worked while at uni to be able to pay for anything, got a hard and fairly boring but well paid career. Every penny in my pension has gone through my payslip, same with my mortgage.

also not a landlord fwiw

it doesn’t help anyone to pretend it can’t be done. It can. It’s important that young women understand that pensions can’t be an afterthought, certainly not for after the mortgage is paid- it needs time to compound. They need to be paying in as much as possible as early as possible - the message that it’s all pointless and only for the lucky few doesn’t help anyone.

stopping buying a coffee a day is bollocks when it comes to home ownership but actually if this was applied to pensions from the day someone starts work with an employer matching then it’d actually amount to something meaningful. (I’m not suggesting everyone is wasting £3 a day on coffee, just trying to illustrate the little/often/early point)

Agreed many would have done this but she already had enough and didnt need to.

What I've noticed is that she happily lives a pretty frugal lifestyle and never complains about money. There is pleasure in living this simple life for her, still using her hand mower which is 50 years old and shops a lot in charity shops. Of course living in London I think you also benefit passively from some of the wealthier people around in this way (not so in less wealthy areas).

She is lucky in that she has had no serious health issues. She has NHS hearing aids! In winter she happily wears thermal vests and jumpers inside to keep the heating bills reasonable.

She was widowed early and didn't feel up to selling the house after that. She also loves gardening and is very attached to her decor and the furniture (!) and couldn't bear the idea of leaving.

I doubt she is the only person quietly living this way and not needing to go on cruises or join golf clubs etc. She has everything and needs to buy nothing except food and utilites really.

I have no idea how big my pot is, my annual statement (and the online calculator my provider has with which I can adjust my retirement age and lump sum etc) just tells me how much I will get a year when I retire at 62 in 22 years time! It is a final salary pension if that makes a difference (IE is pot size important for me to know)?

I just left a job that had only 3% employer contributions for one that has 8% (regardless of what you put in yourself). That is going to make a huge difference to my pot if i can stay here a few years. I am in my early 40s but thinking ahead and being tactical. I also opted in to salary sacrifice which is a little more beneficial and bumps it up more.

When you finish your mortgage (which is another achievement) then you can top up and there are many benefits as it is tax free and employer may match your additional contributions so the pot may grow quicker then you think. I'd also add to savings incase you have to retire earlier then your pensionable age so you have a safety net. And a pot for maintain your property in your retirement.

But also comparison is the thief of joy. Just do what you can. Dont have a miserable existence whilst ploughing everything into your pension-what if you are on ill health by then or even worse. Still live your life now and have the odd holiday etc. you never know what is around the corner.

You have to be careful.A modest pension from the ten pounds may only pay enough to bar the future pensioner from means tested benefits. You could pay for years just to save the government money. A minefield

How did this happen,how awful for u

It depends what sort of retirement you want. You’ll have paid off your mortgage soon which is great, then presumably you’ll have at least another 10 years working in your current job where you could put the amount you were paying for your mortgage into your pension account. That would build up a reasonable amount over 10+ years. If you’ve got enough NI credits you’ll also get state pension.

I totally hear you @Coffeetree

Pensions is one of those societal problems that is laid at the individual's door but is actually very hard for many to put in place an individual solution.

If you do ABCDEFG correctly at the right time or if you have a wealthy background or if you have some good luck you're fine.

But if you have a lowish income, caring responsibilities, get divorced, suffer ill health, have a piece of misfortune or were simply never sent the memo, it is incredibly hard, or often impossible, to do the required ABCDEFG.

There is very little good advice and it is rarely discussed until 40+. Plus anytime you ask a question the answer is you should have already done sections ABCD.

The whole discourse needs an overhaul, moving on from 'what have I not done' to 'what can I do to make progress'.

I’m lucky enough to be in the Teacher Pension Scheme and it blows my mind when I talk to young colleagues who have opted out of the scheme. Some people really don’t seem to appreciate the value of it at all.

Like others have said, I think this kind of advice is really aimed at people like that in their 20s and 30s, as it’s what you do in your 20s and 30s that really makes a difference if you want to be comfortable later in life. It’s not at all certain that the state pension will function as it does now by the time they retire. Obviously at 52 you can’t go back and change things now, but someone who is 25 now could make a significant difference to their retirement if they start now and follow that advice.

I'm planning to downsize in retirement so hopefully that'll help. Seen too many asset rich, cash poor people who are struggling to want that.