How much do you have in your pension at late 30s?

[oneflewoverthe]

I'm 39 and I just checked my pension. I have just under 19k in total. Pitiful! How does it compare to others of a similar age? I'm sure I will regret asking this question as most will be much higher. Tempted to get a lower paid public sector job just for the pension. Currently on 40k. I've upped additional payments of £300 per month and my work pays in the minimum amount required by the government.

What the hell is your husband thinking? Non of that makes sense at all. What does he spend his money on??

@Mia85 No idea, he's not great with money, he doesn't like talking to me about it either. He has to retire at 55 (18 years) from his current workplace, so it keeps me awake some nights wondering what his plan is?

How do I make the 3600 per year?

The next job I go to I plan on making maximum contributions to make up my 5 years out.

@ginoohginoginelli I have no idea. He shuts me down whenever I ask. Some people can not be helped and he is one of them.

I started claiming Child benefit to ensure I don't miss out on my NI contributions, he is currently attempting to get me to stop so he doesn't have to declare it. Not a chance I'll stop claiming as I'll be supporting both of us on my own pension at this rate

@CherryGarcia23 that sounds very worrying and you're completely right to keep claiming the NI (you can register without claiming the money but it sounds as it would be a good idea to keep some income even if it's small). The pension payment that I mentioned for non-earners is explained briefly here https://www.gov.uk/tax-on-your-private-pension/pension-tax-relief#:~:text=You%20still%20automatically%20get%20tax,20%25%20(relief%20at%20source) (under if you do not pay income tax). It's not a huge amount but if you pay in up to £2880 to a pension, e.g. a SIPP, you can still get 20% tax relief. It's free money and keeps you in the habit of contributing to the pension so it's a good idea if you can.

If your husband has to retire at 55 does that mean he is in the police or similar? That's even more bizarre if so, he's paying loads of tax and avoiding one of the best schemes available.

if you contributed the same money into any other defined contribution pension, you wouldn’t get anywhere near what you are going to get in the defined benefit pension. It’s incredibly good.

Im 39 with £150k
Pay in £2k pcm (tax/ employer pay £800)

This has been true over the last decade and a half due to historically low interest rates- you’d have to pay way more in £ to buy the same annual income as a fixed income annuity. Now that interest rates have gone up, I’m not sure what the kind of difference is but it won’t be as much.

what a defined contribution pension gives you is a lot more flexibility- you can draw it down earlier (usually 10 years earlier than state pension and lots of DB schemes), you can decide how much to take out (ie if you don’t need it you can leave it in to grow and minimise your tax burden) plus it has lots of benefits from an inheritance tax perspective as it falls outside of your estate and doesn’t contribute to your IHT. It can also be passed on to any beneficiaries upon your death which a DB pension can not except to your spouse at a much reduced rate. They don’t even have to pay inheritance tax on it if you die before 75 if I recall correctly.
it also means you aren’t tied into your employer for fear of losing out on this gold plated pension when in fact you may be forgoing income maximising opportunities now by not moving job

but they do require more financial understanding and commitment to putting the same contribution in - which is why it’s such a shame when people don’t avail of their employer match and opt out of them. I don’t think they are inherently worse, they just aren’t
understood and utilised well enough, unfortunately

I'm not sure it's worth fretting about, OP.

We are a low wage economy propped up by in-work benefits. There's also a growing number of the economically inactive and a shrinkage of net contributors to the tax regime.

What's going to happen, realistically, to people if they get to retirement age and they have no pension pot?

With so many people dependent on the State what is a government to do? See them destitute or raid the pots of those that have diligently paid in their whole lives? My fear is the latter.

At some point in the future - 15 years, 25 years I dunno - there may well be some sort of reset, and you will look back on your 45 years slaving away at the corporate coalface and you will think, well wasn't that all a waste of time.

A lot can happen. The age for drawing a state pension will rise into the 70s for OP, same for me and I've no intention of working past 60. Going travelling.

The state pension is also peanuts, not something to aspire to live off. Forget decent holidays.

In addition, there will have to be a decrease (and there will be) in benefits spent as its now more than the nhs annual budget. But again the amounts will (and should) come down - benefits should be capped at less than minimum wage to encourage earning unless you're health prevents you from doing so.

But that's by the by, if you want a reasonable retirement you need to plan ahead and pay for it yourself, take some responsibility, and a pension is the best way to do it. It almost becomes addictive logging on to check how much it's grown.
Whilst OPs pot is small, it's not too late. Regular contributions for 20-25yrs will go a long way, particularly if her company match it, and OP will end up in a good position.
Pensions are also exempt from inheritance tax so a great gift to leave if you haven't used it all. It's also very tax efficient and benefits from compound growth which provides a lot of additional free money. And the you take 25% tax free. Shove that in ISAs and you get more interest.

Astounds me that people are not more financially literate. Invest for your future. Good for you OP that you are focused on this now. Put in as much as you can, your future self will thank you.

I had about 35k at age 38. Now I'm 44 and I have 105k. Partly increased contributions but also good investment returns.

I had £0. Now £110k at 47 and working hard on it

@5thCommandment yeah defo will get pushed to 70, then 72 etc. Is the state pension bad? Maybe on its own, but if you are a couple and have your own private pension the extra bunce is alright. Dare I suggest it will eventually become means tested? "Ah Mr/Mrs 5th, we see here you have a private pension pot worth £500k, unfortunately that doesn't qualify you for a state one. Good luck in your retirement, Yours faithfully HM Treasury"

Well everybody on this page had 0 at the start. Whatever they have now.

what is more pertinent is how old you were when the 0 started increasing.

Yeah I agree with this. The U.K. state pension will probably be means tested in a decade or so - the country Is skint.

It's currently 11,500/yr so a grand a month ish, very little really, albeit went up massively in the last year due to the triple lock / also likely to be scrapped.

The ops question was 'what did you have in your pension in your late 30s?' so I assume @motherofawhirlwind was answering that question

Oh yeah, good point. . I guess I just got distracted by some people mentioning other random ages.

Mines a DB scheme so I'm not sure what the nominal pot is.

I've started a pension for DS though - it's got about £6k in it I think and he'll start adding to it as soon as he gets a proper job.

I have DB pension too (mainly). If you multiply the current predicted pension (ie what you would get when you retire if you quit tomorrow) by 20 that should give you a good idea of your "pot"

Eg. I would currently get 10k (if I quit tomorrow) giving an approx pot of £200k . I think it does normally give an indication on our annual paperwork too.

I felt like shit when I was the first person on this thread to admit I'd got almost nothing in my pension pot. Having returned a few days later I'm learning so much about this whole thing. Both my parents were lifelong benefits claimants so I have zero advice or understanding of all of this stuff. It's really helpful to follow along with all the points people have raised. For example, I had no idea about the concept of defined benefit pensions.

Yes, sorry - at 39 (well until I was 40 and a month, technically!) I had zero 😀

This was how the government would work out the value of it for tax purposes - to decide if you had to pay a tax charge as were above the lifetime allowance. I don’t believe it has much tangible purpose otherwise and now the Tory’s seem to have abolished this I don’t know if the number has much purpose

That is until the Labour Party get in and inevitably bring it back that is!

that’s in reply to @AnneElliotts comment

My ex-H is a financial advisor.

At 40 I have £160k in a private pension. His financial sense and retirement plan was probably the best thing about being married to him!

I also currently have 12 years of LGPS contributions.

I have just over £80k and my husband has about £110k. I’ve always paid in since I was 21 but only put in 5% (my employer puts in 8%). I have no idea what we need or how on/off track we are

Just under £5k at 65! I'm self employed and never earnt enough to put towards a pension plus my DH worked in financial services, for a short while, so never trusted anyone to advice us correctly.
Both my DS are horrified we'll have to rely on the state but it's too late now!

I've got £0 at 33.

PT self-employed for the past 10 years due to a health condition. Hopefully going back to work full time next year and can start my pot.