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!

By the time anyone currently in their 20s/30s can retire most of us will be dead anyway. I figure I'd rather spend it while I'm alive as I could get hit by a bus tomorrow too.

It's still worth putting into a pension now even if you've left it very late.

You get basic rate tax relief at source, can take 25% tax free and the rest can be taken whenever you like subject to your rate of tax at the time. If you are likely to be on a low income in retirement some of this might also be tax free.

I totally understand you OP. I’m 46 and only really have the SRP to look forward to. I worked for a firm for 10 years who only paid pensions for managers so I didn’t qualify. (Also accountancy firms!) Couldn’t afford it anyway. ten years on after a couple of mergers I was eligible so started paying in, the firm paid in a % too which was great, had almost £1k a year going in in total, then two years later went on Mat Leave. Stopped paying into it when I left a couple of years later, so it will be worthless basically.

XH walked out when I was 40 leaving me to bring up a 4yo on my self employed income. (Had gone self employed to work around family life, giving up a good job). Then had to remortgage over 25 years to keep the house, so mortgaged now til I’m 66!

I have to live for now, paying for my child’s needs, can’t even think about a pension. As I’m self employed I don’t fall under auto enrolment.

My house will have to be my pension.

At the moment there is still pension credit:

www.ageuk.org.uk/information-advice/money-legal/benefits-entitlements/pension-credit/

Bur for those with no savings, just paying the day to day bills is more important.

My pension is just one of my later life provisions.
I would never put all my eggs in one basket
but at least I have eggs

Also, my aunt and uncle paid in for years, my aunt deferred her SRP til 65.

They both passed away before they were able to enjoy it. Such a waste.

That also puts me off pensions even if I could afford it.

It's not too late to start OP. My Mum didn't start before her 50s and has never been a high earner but she's built up a pot that will give her about £250-300 a month on top of the state pension when she retires in a year's time. She owns her own home so she should be ok on that although obviously not rolling in it.

You can leave your personal pensions as a lump sum to any dependants

They are just a tax wrapper really.

So even if you cark it, they won't be wasted.

Agree with Haunted
and most DB pensions have various death benefits so they do pay out to the family.

Pensions are worth having
IF YOU HAVE SPARE CASH
or
IF YOUR EMPLOYER IS PAYING IN
otherwise
they probably are not

Why don't you have any pension?

For me it's because I can't afford it. I'm a band 6 Psychiatric Nurse working in the NHS. I would have to contribute just over £300 a month, which I simply don't have left.

I think I'll probably cobble enough together to be okay in the end but one thing that bothers me is that there's going to be a big income discrepancy between me and my public sector pensioned friends.

Well basically pension commitments were made in the 70's and 80's by the public sector that were NEVER affordable (even at the return rates back then) So the schemes went into deficit and the benefits for current workers are being cut and cut while the baby boomers still receive their unaffordable pensions

Really? LGPS is the largest public sector scheme and the latest changes improved the pension scheme accrual rate. However it did become career average which is a much fairer way to provide defined benefits as it removes the potential for abuse and keeps the scheme sustainable.

In the private sector it has led to the PPF

Some schemes are in the PPF as the scheme was unaffordable but the reality is that the employers were in many cases going bust anyway.

Pension funding is all smoke and mirrors and closures have arisen because of the low interest rate environment and government policy providing inflation linking and increasing taxation of the funds.

Oh and those terrible baby boomers having the temerity to live longer than actuaries predicted

@talkinpeece

I started mine at 19. I remember getting my first wage at 18 and dad saying "start a pension" it was one of the few things he nagged about. He's now 87 with Alzheimer's but his little pensions have made life much more comfortable for him and mum.

I have paid in religiously since then, coming up to 53 now and the mortgage is paid off so I have upped my contributions to 21% for as long as I can as you never know what's round the corner.

I think the new state pension is £164.35 a week, so £8.5k a year. I don't see how the government can take away housing benefit/council benefit for people at pensionable age as there'd be widespread homelessness.

I think - but don't know - about to check - anyone who has been a carer will have had their NI contributions made so are able to build up the relevant number of years. Anyone getting £163 a week or less is entitled to pension credit and hopefully that won't change.

Deferring your state pension is supposed to build it up to more than £164.35 per week but I don't know how much by for each year you delay receiving it.

Best thing is to keep working as long as you can, even if you go part time, a few hours here and there will keep you in food weekly and pay some bills so you're not using up all of your pension. I might get a job in the food service industry then if they provide a free meal per shift. I won't be rolling in it but thankfully will survive and shouldn't be on the breadline.

As someone said between 60 and 67 is tricky in terms of employment and getting your pension.

I am not really clear though when people say their house is their pension, do they mean they can downsize to release equity?

Yes that’s exactly what I mean. My house is worth over £1m. And has 5 beds, detached I’ll downsize and buy something smaller for about £600k, say a 3 bed cottage. My kids can inherit that, I’m not hoping on to a big family home for the sake of it

talkingpeece I never worked for a big charity. None of the ones I worked for are household names. If they had a pension scheme at all, most had a "qualifying period" of up to a year when no employer contributions were made. Most employers paid at a rate of 3%. Very little.

Yes, that £6K a year has to last me for life.

I also lost 6 years of state pension as being just the wrong age. And I grew up in an age where equal pay and equal earning ability didn't exist.

You can see why I get annoyed at the assumption that all people of my age are sitting on gold plated pensions and laughing at people younger than us. Just not so.

Joycetemple
The LGPS is not one scheme. Every county has their own one
and every one of them is in deficit.
Employers contribution rates are up to 35% (including lump sums) - only the public sector can afford that.

And the bulk of public sector schemes (teachers, NHS, Civil Service, MOD) are unfunded.

The baby boomers long lives were predictable.
That is why the level of pension benefits (early retirement at 55 on full pension etc) were never affordable.
But politicians were cowards.

Forties and don't have one. I will get the full state pension but that's all. Mortgage will be paid off by then too. No chance of spare cash to pay into a private pension pot though, or at least not that I can foresee.

No idea what to do about it.

benefits for current workers are being cut and cut

But they’re not are they

The baby boomers long lives were predictable.
That is why the level of pension benefits (early retirement at 55 on full pension etc) were never affordable.

But you're not talking about baby boomers are you? Only people with public sector pensions. Which is different.

Joycetemple
I work with LGPS employers.
Yes, benefits and lump sums and fringe payments are being cut significantly compared with the 1992 scheme and the pre 2012 scheme
and yet the schemes are still in deficit

fuzzycustard
Only people with public sector pensions.
Public sector pensions are paid out of taxes.
Pensions are a rapidly growing cost to the treasury .... so other parts of the budget are being cut ....
the triple lock on pensions has been at the expense of the young

There will still be some benefits, pension credit. A lot of ppl are going to be in this position. Sell your house and rent? Downsize, have lodgers?
Older people's housing at 55+? Housing benefit....

It does annoy me when people slate public sector pensions.

We pay into them you know! I pay 6.5% of my earnings.

Public sector earnings on average fared well relative to the private sector up until 2012, and then they tanked rather.

Also, public sector roles give back something to the public. Emergency services, doctors, teachers, hose faceless people who administer your your council tax and empty your bins...

I do feel for people who do t have a pension pot but it is never too late to start making a difference.

I think you mean pre 2014 scheme

Discretionary benefits may be pared down but there’s been an improvement in the accrual rate

Again failing to see how the baby boomers are responsible for current market conditions