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?

I think an important point here is that most people contribute to their pensions while paying a mortgage. It’s great that you’ll be mortgage-free at 56, but many people are not and choose to spread their income across serving a mortgage and servicing a pension over longer time periods.

Help your DC through uni, yes. But no, you don't HAVE to help them with a deposit for a house. If they go to uni and get good jobs they can save and pay their own deposit.

Google ‚SIPPs‘. We’ve just found out about them and are about to set them up for our kids.

it also pisses me off when people say state pension rises just now are too high…country can’t afford the rises

State pensions are just over £10k. That is not enough to live on, especially if you live on your own. Which funnily enough impacts women more as well as the gender pension gap in first place. The sums don’t add up. Many pensioners are on pension credit to top up this amount , and then still living in poverty day to day . And the vast majority of those are women.

yep, theroereticslly some could downsize to smaller homes- have you ever looked at price of bungalows or retirement type accommodation? It is overpriced simply becuase there’s not enough. Builders don’t want to build bungalows - they can get two 4 bed houses on same land space . Older people are often trapped into oversized, badly heated and increasingly poorly maintained homes.

pensions data around the world shows other models are available- it is successive governments who have no will and sit in pockets of uk financial institutions
https://www.blacktowerfm.com/best-countries-for-pensions-in-the-world/
Note that despite uk wealth ranking in the world, we don’t make it into this list at all
And we’re way down bottom of this one
https://www.weforum.org/agenda/2018/02/average-pension-country-wise/

afaik, parental contribution to offspring Uni costs is mostly calculated based on parental gross income & # of other dependents. Your wealth & debts don't come into it, or maybe very little.

An advantage of paying into pensions over long term is that it being an investment, the risk of rises/falls/expensive buy/cheap buy all gets averaged out.

Yes, all sorts of different outcomes are possible. I had to unlearn some of my parents frugality, because quite frankly it's bonkers. Especially counter-productive frugality such as driving around five shops to find the best prices.

One thing that annoys me is the focus on the SE as a model, and single living as a model that we all ought to be following or be able to follow. Like you can't succeed unless you go to London.

I graduated into a recession and moved further north to a cheap area. I earned 15k, but saved £200/month from it right off the bat. I moved to another part of the country with a great wage to cost of living ratio and didn't spend everything as my salary amped up. If I hadn't been living with my husband, I'd have chosen a house share. Of my best friends from school, the one with the worst financial difficulties is the one with the swanky flat in London and the top-rate salary. The wealthiest lives in Newcastle, since graduation.

Some people on MN talk like these sorts of choices are incredibly imposing. They aren't. I had a whale of a time.

There's no one right path, but I really hate people claiming that options don't exist. It must be so demotivating to hear that.

@JesusMaryAndJosephAndTheWeeDon
If you start at 18 or 21 pretty small contributions will get you to £300k.

I have a pubic sector pension so I'm doing alright, but the chap I'm dating has paid into a company pension since the age of 22. He's now 52 and only got about £60k in his pot. He's worked consistently and never been out if work. In all that time there's maybe a total of 12 months he hasn't paid in due to changing jobs a couple of times and workplaces not getting him signed up immediately. I can't see 60k suddenly becoming 300k in the 15 years before his (hopefully) retirement.

A 300k pension pot is just pie in the sky for a very large chunk of the population. I'm not talking about poor or hard up people, I'm talking about the very very squeezed middle.

https://www.thetimes.co.uk/money-mentor/article/pension-pot-amount-average-uk-how-much/

I'm not super rich by any means, nor is my DH. 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.

Plan B would be to take your half-sized pot and retire to, say, Bali!

I am mid-40s, I have £90k left to pay on a mortgage and £25k in a pension. I'm screwed but as I'll have to work until I am 70 to pay off the mortgage I am less worried about the pension. Lots of equity in the house, I'll downsize and then probably pop my clogs.

Again, I know the figures!

The earlier advice about focusing on both pensions and mortgage overpayment. I'm going to reconsider my current strategy of throwing all spare income at the mortgage.

Well done!

I also think have always been very conscious that my parents both died before they reached retirement age.

I just can't visualise retirement as I've never seen it, if that makes sense.

These decisions would be so much easier if we knew how long we were going to live!

Benefits for older people especially single people are much less generous than for people with children.

And thanks to the kind people saying not to panic. I'm really not panicked, I actually feel very fortunate to have what I have.

This may be stating the obvious @Coffeetree but do you work in a profession where your company has a pension scheme and are you part of it?
Sounds as if you and your employer has never considered a pension scheme.

£50K now by the time you are ready for the state pension (currently around £10K pa for the full amount) will be worth very little given inflation.
Even topping up the state pension with your own savings is not going to be much.

There are various figures out there, but one I saw recently was that £12Kpa is needed for a basic lifestyle (my very elderly mum has that amount), £23K is a moderate lifestyle and £35K is needed for something more comfortable.

My advice is you see a financial advisor.
I am semi retired and comfortably off, but am still putting some income/ savings into a private pension where the government adds 20% pa. This can go on until the age of 75.

Obviously many people manage very well on just a State pension and aren't house owners.

Absolutely this! People are obsessed with being mortgage free at the cost of all else. My route was to focus on building a deposit and then once I had a property ramp up pension payments rather than overpaying the mortgage. Much better use of money.

I am fortunate in that at 58 I am retired and have a pension pot of £650,000. I worked my socks off to get to this position. Single parent, 1 holiday a year, being frugal and not wasting money on eating out and drinking excessively. When I was in my 30's I saw a financial advisor and that gave me the incentive to achieve an early retirement goal. Starting to save for a pension early is essential if possible. I do think that 20 yr olds, trying to save for a mortgage or paying ridiculously high rents, repaying student loans etc will really struggle compared to my generation. I have children late 20's who both save in a pension, I have drummed it into them to be financially aware. My parents are in their 90's living a comfortable lifestyle on approx £30k a year, cruise 2 0r 3 times a year, heating on when they need it and eat well.

Priorities are different now, expensive mobile phones, nice cars, sky, Netflix, Disney tv etc, Unbelievably high costs of eating out and a social evening with drinks are all things which we did not have to spend on when we were early 20's. Picnics, flask of coffee instead of costa, caravan holiday in uk etc. Quality and standards of life have increased the financial needs of future retirees and reduced the availability of funds to pay into a pension.

My advice would be to speak to an independent financial advisor and make a plan. Stick to it, dont waste money and hopefully you can retire with a half decent pension.

What happens to people like me who have never been able to work (autism and health issues)? We have no pension saved.

I really don't think so.

The full state pension is just over £200 a week.

How is that 'manging well'?

That £200 has to pay for fuel, transport, clothes, food, council tax, water rates, and we've not even included entertainment of a day out anywhere.

And if they are not home owners and paying rent, they will have even less disposable income a week.

A state pension and benefits.

Agree with this. We won’t be mortgage free until 62 because we are putting as much as possible into our pensions.

Op it's not too late to put quite a bit more away.
Having said that I think a lot of these pension examples are propaganda to stop people retiring early and keep them in the workforce. If workers are fearful of not having enough then they will continue slogging away for another year or so of their lives which helps the economy.
Remember the fuss last year about getting the early retired over 50's back to work?
We've just early retired mid 50's and we worked out what we would need to live on, then savings for holidays, days out, meals, clothes and all the other extras.
Find your number not some arbitrary number.

Incidently since we retired we've been on holiday of some sort every month, have joined the NT, bought new touring motorcycles etc. We've spent less than we thought so far but are planning a few big trips next year and beyond. If we just wanted a week in Spain every year we could manage on very little.