Please tell me I am not the only oldish person without a pension plan

[QuentinLettsisAbitofAtool]

Not a TAAT well it is a bit but sod it

I'm having a bit of a panic attack brought on by the MN survey about pensions. I don't have one, have a big mortgage, not due any parental inheritances and am in my 50s.

Please tell me I'm not alone as that might make me feel less dumb!

Oh and I put "oldish" in the thread title because I mean old in terms of a pension. Twenty somethings who don't have a pension don't fit my criteria!

Actually im 39 (hes 40s) and Ive read about a lifetime ISA . Is that higher returns? I guess for us the risk is its locked away and we really dont have savings.

Who do I speak to for advice as i dont have specific questions I really just dont know.

Thank you for whoever posted the link to work out what state pension you are entitled to. Having been a SAHM for years I didn't think I'd be entitled to anything, but am delighted to see I'd get over £150 per week. I'm in my 50s and, without a mortgage, could manage very comfortably on that.

If you are a SAHM make sure you are claiming Child Benefit, even if you have to repay it. This is what gives NI credits and State pension entitlement. Also be aware you now only get them if you have a child aged 12 and under.

If you are out of work and have a right to contribution based JSA or ESA you should also claim it to maintain NI credits (suspect many are losing out on this because they wrongly assume it is all UC now)

They all tell me that the government will step in and pay rent for you when you are retired so there is no need to panic

It's true, they can claim housing benefit. The fact is, when talking about over 50's, which this thread is, things are not going to change so drastically in the next 20 years that we'll all end up penniless and homeless. Yes there is an impact on future generations, in that the bill for all this will be unsustainable. They will likely bring in means tested pensions and so on. But no government can suddenly start chucking pensioners out on the streets. The state pension is enough to live on. People who rent and can't afford it will get housing benefit.

If I was 20 and just starting work now then yes, I would make damn sure I was building up a decent pension. But there's no point stressing or having sleepless nights over it if you're 50+ now and don't have one. I'm not saying it will be a luxurious life, but it's doable without too much hardship.

Don't worry too much - just remember the Equitable Life scandal from way back. Thousands of pension policy holders died off without seeing a penny settlement whilst the whole disgraceful debacle was being sorted out.

They put (a lot) in but the firm never paid out.

I agree with you Storm. This is especially the case if what little you do save ends up shutting you out from means tested benefits like HB and council tax relief.

Just being doing a bit of research into one of my small pensions. I've posted upthread about having 4 small ones - e.g. one paying out £250 a year. On the estimates given by two of them of annual income both have come down massively over the years (the £250 one was estimated at £400 a year a couple of years ago). I really don't have faith in them at all. Another example, an annual estimate for one of the others in 2011 was £3.5k a year, by 2014 they were estimating £3k a year, the latest estimate shows £2.8k a year. The problem with them as far as I can see is how can you question these figures - you can't. You're at their mercy. If I draw on them at 55 I can get 25% tax free and then pay tax on the remaining 75% (I think). I think I'm going to do this as at least I'll have the cash to invest myself and it'll be more easily accessible and at least I'll know what I have rather than figures that seem to change willy nilly.

The only thing I'm glad about is I haven't contributed a penny directly and I won't. I'll no doubt lose by cashing them in but at least I'll know where I am.

Don't worry too much - just remember the Equitable Life scandal from way back. Thousands of pension policy holders died off without seeing a penny settlement whilst the whole disgraceful debacle was being sorted out.

Very true, but pension firm collapses like that very rare, and will be even more unlikely in the future due to enhanced regulation around ringfencing investors money.

The vast majority of people who have long term pension arrangements will do extremely well out of them.

Dh and I have crappy pensions - combined about £6K/yr and what worries me is that we will be worse off than those who haven't saved anything. No doubt by the time we could retire (15 yrs or so) winter fuel payments, tv licence, subsidised travel/even free prescriptions will all have been done away with/means tested so those with micro pensions will be stuffed.

Pensions as they are now will cease to exist by the time you reach retirement age so don't worry about it (the sums totally don't add up). I doubt anyone will get back what they have put in and in any case it will be worth buttons. You're best bet is to buy gold if you have anything to put aside. If not, property/land will be the best way to protect yourself. Getting a rental property if you can downsize and get a buy to let mortgage would be a great way to secure yourself some income. Just be careful of the property bubble and don't overextend yourself.

@IrmaFayLear

I suspect you could be right on that one. I think it will be the case that you either need a great pension or none at all and those in the middle will be hit hardest.

Leapfrog when no-one not even the Govt has the money to subsidise LL in the way they do now and with an ageing population I would not bank on BTL as a retirement plan.

Even if you are in your 50s it is worth paying something into a pension for the tax relief, even if you are a non tax payer and the employer contributions. I am late 50s and have drummed this into my daughters/son in law in their early 30s. The sooner you start the better. It makes a lot of difference to your choices in later life as you have the option to retire early rather than have to wait for spa which is getting later and later. If you start early you don't miss it going out of your salary.

Don't follow leapfrogs advice. Gold and property are even more volatile than investments which can be heavily diversified and consequently less prone to large falls in value. We have had loads of property crashes over the decades and will have more. Gold is even worse.

@LeapFrog can you give us a link to the website that sells the crystal balls
was yours expensive?

Don't follow leapfrogs advice. Gold and property are even more volatile than investments which can be heavily diversified and consequently less prone to large falls in value. We have had loads of property crashes over the decades and will have more. Gold is even worse.

^^THIS!

The state pension is precarious but on private pensions the sums work out very nicely. And all the "you'll only get £2K a year" etc is old hat. No one needs buy an annuity now, you can just draw down out of your pension pot what you need. Take 25% tax free at the start (even though you got tax relief putting it in). It's actually free money from the govt that people are crazily suspicious of!

Then if you draw down the rest keeping your total income under the tax allowance (soon to be £12500) you don't pay tax on that either.

We only have property, one house and one flat, no mortgage though on either. Plan is to somehow get another property so we have two rentals and eventually downsize from the house. Still worries me to death for all the things that could go wrong. Think will see an IFA and open some kind of other investment for extra security but we are neither of us big earners and really need our savings to buy another house. Ages 40 and 50.

Btl seems an option, but then you don't know how any future governments may hammer this option. Actually I have seen lots for sale locally - particularly former council houses currently used as student property. There are masses of student halls being built atm so perhaps students of today don't fancy living like The Young Ones! Also I have seen in the paper opportunities for investment in these halls. I would be super wary of that, as in a blink of an eye swathes of young people may decide that university is not a wise option and many institutions and their halls will be obsolete.

Well, yes, they are! I started on defined benefit pension, which then became 1/2 defined benefit and 1/2 defined contribution. Now they are planning to take away defined benefit altogether. Can't afford to increase my contributions with kids and bills to pay for, so I've just got to take the hit.
And I'm luckier than many, as I've been paying in since I was 23 (back then it was for a 'lump sum' on retirement, separate to pension payment, so I wouldn't have had to claim my 25%.) Things have changed a lot. I understand its because of the unsustainability, but doesn't take away the feeling like I've been kicked in the teeth!

@Didthatreallyhappen2 That figure of £155 assumes you go on paying your NI contributions from now until you reach retirement age (or you’ve paid for 35 years, whichever is soonest).

If you’re still a SAHM and your children are all over 12 then you have to start paying. You can do that by making voluntary contributions, also called class 3 contributions. It costs about £700 to buy a year of NI benefits, and each year you buy will increase your pension by about £200 a year every year, so worth looking into if you can afford it now.

@ScarletAnemone

I posted a link yesterday, this isn't the case. If you don't have enough contributions you get topped up via pension credit. So it actually makes no difference how many years contributions you have.

I have lots of small pensions here and there with every job I ever did over the last 25 years or so. No idea what to do with them or how to manage them. Think it’s time I spoke to someone qualified to sort it all out. Luckily I get a state pension from abroad when I ‘retire’ which is very generous which will bolster the shit UK one I will be due despite paying through the nose in taxes my whole life. I think it is better to have a pension pot than nothing at all. I will own my home outright and assume I will get some inheritance along the line but I still need a roof over my head, kids to pay for and inheritance is not a guarantee. Don’t expect the state to bail me out in my retirement. Don’t expect my brood of kids to look after me either. Best to save a little every week for the rainy day which is guaranteed to come. You work hard all your life. When you retire you should have a reasonable QoL.

Gold is a terrible long term investment.

5 reasons not to invest in gold

Foof
If you have several, it may be worth getting an IFA to merge them all into one decent performing one with low fees

but most IFAs are uninterested in any amount under £40,000 capital