To think that a lot of people don't seem to understand that part-time work = much smaller pension?

[AHedgehogCanNeverBeBuggered]

I work with a lot of women in their 50s, several of whom have expressed their shock/disgust at how little occupational pension they'll be receiving when they retire, even proportionally compared to FT workers. They have all had DC then remained PT even after the DC became teenagers and eventually left for uni. I didn't want to say anything to them when they were complaining to me how hard done by they are, but surely it's basic maths to know that the more you invest (and the earlier) the more it grows and therefore the greater the pension? How can they now claim to be so surprised and hard done by?

If older people are suddenly shocked by their pension it’s provably due to the drop in the annuity market.
When I started my private pension (late as I was civil service through my 20s) a fund at retirement of 50-100k would buy an annuity you could manage to live on. Now that amount barely buys anything in annuity.
My current fund only translates to about £3k/year pension!

Why won't there be a state pension? Can someone explain I'm really confused and worried about this as I've got no other pension after being sahm/working pt in different jobs. I'm working pt now with no spare money to put into a pension, so will I just have nothing at all when I'm old? Just be left to die with no house/food etc? I don't understand!

Surely annuity rates would never exceed 10% though?

I was told at law school (15 years ago now ) to assume there will be no state pension by the time I reach retirement age. It is just going to become increasingly unsustainable to pay a pension to an aging population. The reality might be that there is a pension but that it doesn’t kick in until we are much older.

No government would get away with withdrawing the state pension, it’s totally unreasonable to demand people pay for something they won’t benefit from. They have of course moved it further away and I’m sure will continue to do so. We are all going to need to pay more for things (retirement, NHS) in the future. I do worry that so many jobs can’t be done in old age. Also that these jobs often ruin people physically and mentally, then instead of giving some comfort in retirement will throw them onto the scrap heap. I know so many probably in their sixties upwards who are in poor health from crap jobs and pay and who wouldn’t be able to contribute much to a workplace. Some jobs are a young persons game and society needs to have a real plan for how older people an be supported to keep working.

There will be a state pension. It just won’t be worth all that much in real terms. And they keep raising the age at which you can start claiming.

baby there will be something but possibly means tested so you only get it if you literally have no other means of support

They were discussing state pensions in Radio 4 Money Box recently and all the "experts" were confident there would be a state pension in the long term future

I think there are many women (and men) who don't take thier pensions seriously.

I know lots of people who are self employed and have never even paid voluntary NI.

I know my producers are going to be quite bad as aSAHM. - but it's something I have accepted.

"I have a vague memory of that. Certainly when I returned part time after my first, I would have been excluded from the pension scheme had I worked fewer than 16 hours, "

Until auto-enrolment, there were plenty of full time jobs that didn't have an occupational pension. It was a benefit in 'good jobs' and not something everybody got, especially if they worked for a small organisation.

Some people just don’t understand financial matters and hope for the best.

Why can women not see that they need to start to be more assertive when it comes to things like looking after children, pay, pensions etc. If a woman is in a relationship/marriage and the couple have children then surely she should be looking to protect herself for the future. A simple switch in expectation by a large number of women would have a massive impact and completely change the way we work. Men are not going to give up their cosy life styles. Don't get me wrong having to work for 50 odd years to provide is a stress however if women put their foot down told their partners that everything needs to be shared when they have children then things will change. For example - expectation that having a child will impact a mans ability to work - they should share pickup/drop off school days etc. Whilst women choose to give up work to look after their family and put themselves at the bottom of the pile they will stay at the bottom of the pile.

If women did this they would protect themselves from the impact of relationship breakup and financial issues in retirements. Women put themselves in this vulnerable position because they allow it to happen. BTW I am not talking about anyone who has a disabled/sick child or partner, that is completely different and they need and deserve the all support they can get. There are too many people looking to the state to fund lifestyle and not taking responsibility for themselves.

@timeisgettingon I do totally appreciate where you are coming from, but to play devil's advocate... Why should it be the responsibility of women to force the issue? Why can't men step up by themselves and take equal caring responsibility for their children and parents?

[raising of pension age for women]. Anyone who says they didn't know is either a complete eejit or an ostrich

This is far from the complete truth. The original decision to raise ages was well publicised. Subsequent increases by creep for women, including changes which were far too late for women to address have been slipped in with far less information. In particular low income women in temporary and insecure employment were missed in a lot of the targeted info sent via employers.

In particular the group of women born in the mid 50s had several incremental changes to their pension age without much notification or the lead time to address it.

Either way, its not that simple for women to revert to full time when the kids are older. It assumes full time is available and most women in this situation are still the primary household carer/managers including growing amounts of elder care.

To the posters outraged that I'm 'rubbing it in' or having a go - I'm really not, I'm just amazed that SOME people (in my limited experience) appear surprised that having worked PT for years their pension is proportionately much smaller than someone who has worked FT. I'd have thought people would understand the basic maths, but a few PP have made a valid point that people weren't encouraged to think about their pension many years ago (unlike millenials who've had it shoved down their throats since school) so perhaps it genuinely hadn't occurred to my colleagues that they'd be in this situation.

I'm not sure what the age of my DC has to do with being surprised at a lack of planning and basic maths but DS is 6.5 months. DH and I are both going to work 9 days a fortnight, we're taking shared parental leave, and most importantly we're well aware of the impact of these decisions on our pensions.

£100k used to get you 7-7.5k annuity plus your savings would earn interest.

Now it buys about 4.5k a year and your savings earn close to nothing.

I’ve got time to make other plans but if I was 10-15 years older I’d be annoyed.

Can I point out that everyone’s circumstances are different. My exh chose not to work while we were married and was entitled to 1/3 of my pension when we divorced three years ago. This includes ten years of my pension (full time hours) before we even met!

I am in my 50s now and just been sent my pension forecast aged 60 and it’s not looking good.

Let me tell you I would have divorced a lot sooner had I known that or not married at all. I could never have predicted what would happen to my pension.

do you not clock up NI credits whilst being on carers allowance so you can (provided enough qualifying year) get the full state pension?

Yes, you do get full NI conttibutions whilst getting carers allowance but the fear is that state pension won’t exist or more realistically will be drastically reduced and subject to means testing.
When I first became a carer everyone in receipt of carers allowance got 2nd state pension contributions, so effectively you would have got your state pension and a 2nd state pension to top it up which recognised your situation and contribution as a carer (who has saved the state hundreds of thousands of pounds). The second state pension was removed when the flat rate state pension was introduced, so effectively carers were shafted.
Given these changes that have already been made, it isn’t inconceivable to worry that the state pension as it currently is will again be changed and reduced and carers as well as everyone else without private or occupational provision will receive next to nothing in old age.
I don’t think the govt can ever remove the state pension entirely because we have to feed and house people but I expect everything will be means tested and amounts given will be similar to JSA rates for all except the very old or infirm (perhaps over 80’s)

Magna, yes I absolutely agree with you however why would men do this - there is little/no benefit to them. Society is setup by men to benefit men. When a man leaves a woman in many cases he simply up and leaves and takes his ability to earn more etc with him. He has worked all his life, supported by his wife, paid into his pension - I'm all right jack. Unfortunately women need to do this because they need to start putting themselves first!

I work in pensions, not in an advisory capacity necessarily but i do attend and run many seminars.

Auto-enrollment has been a great thing and should have been introduced much sooner. It gets young people into a pension, albeit at a low rate, but it gets them in to the habit of losing a little of their salary without it ever touching their bank account or having to decide and then forget to opt in to a company pension. I see very few opt outs, normally if i do, it's because someone is just on a fixed term contract and doesn't want a small 'pointless' pot building up.

I'm worried about my own pension savings though! I'm early 30's and it's currently impossible for me to put in more than 4% a month, to my employers 6.5%. I also don't and won't own my own home unless i get a windfall or inheritance so i won't have that to fall back on either.

I have a number of friends that are in the same position too. I'll be working until i am 80 at this rate!

Self employed here and worked 7 days a week flat out to build my business up.DH and I both have private pensions ,mine much smaller than his.But at times we've both had to take a break from paying in.DHs business folded through no fault of his own in the recession of the 90s,and several years later was made redundant.That's when I set up my business which initially kept us afloat and enabled us to help our DCs through uni and with a small amount so they could each get on the housing ladder. So I can't deny I feel a loluckier than most,our mortgage is all paid off,but worse off than some.We won't be jaunting off on cruises and leading the high life in retirement,but we will manage,and tbh I goet most pleasure out of having more time for hobbies and family.By far the biggest adjustment is the shifting of state pension from 60 to almost 68 in my case.I think has been the biggest shock to most women my age.A huge leap ,and whilst I accept with an ageing and growing population changes had to be made it still feels a bit meh.Especially as my work is pretty physical, and whilst I'd love to earn the same as I did a few years ago have had to downscale a lot due to injuries.Prior to being self employed I worked full time with DCs for years, but went part time as I really wanted more time with them and have never regretted that.I always understood that would affect my pension - and didn't need my DH to explain that to me as someone had suggested!

No pension should be a surprise, you get annual statements, but equally life isn't all about making the most money, and people work part time for all sorts of reasons, maybe the work life balance was more important.

Just to clarify: it wasn’t just carers who get 2nd state pension, it was paid to workers who didn’t contract out as well (to recognise their higher NI contributions) and to those claiming child benefit with a child under 12 and not working. But the biggest impact of its removal is probably on those who have been caring and receiving carers allowance for many years.

I think a lot of us saw our parents private pensions not pay out - the equitable life scandal and also just not all investment works. So when you have children you are balancing how to eat now V How to eat later with no guarantees the money you put away for later will still be there.
I do think it's a big issue and strongly encourage families who decide to have a sahm or a part time working mum with the childcare burden to ensure a pension is set up and paid into by the DH.

Southboundagain

I don't understand how there can be a public sector pension deficit - I'm required to pay 9% of my salary into my pension which is more than any private scheme I know of, and that's not even the top possible level of contributions.

9% is only a relatively small part of the cost of a typical final salary (or career average, if that applies to you) pension. Contribution rates of 30% or more are required. And that's just the ongoing cost; any deficit would mean further costs to pay it off.

Lots of things can cause a deficit but the big ones are investment falls and a drop in the return expected going forward, and life expectancy increasing. So a scheme may be receiving what it thinks is enough money but then one of these changes and very quickly the scheme doesn't have enough.