Women and pensions

[Gin96]

AIBU to think women are short changed when it comes to pensions? The amount of women I speak to who don’t have a private pension. A lady I work with is 67, she only has a state pension and can’t afford to retire. Ladies in there 40’s with no pension at all, they don’t think it’s a problem as the state will provide for them. Why are we not taught in school about finances and pensions? As I get nearer to retirement age I am suddenly taking an interest and it is a mind field trying to work it out.

@bingowingsandthings are you paying into a Defined Contribution scheme now? If so, you can probably transfer it into that. Otherwise, I know I wouldn’t just forget about £5K! And you haven’t so far, so it sounds like you’re not someone to just forget £5K either!

Surely landlubber you realised there was a commission is at hand and took your decision against the backdrop?

I didn’t need the state to explain pensions. And I’m not sure anyone explains it to men either.

I watched my dm having to put up with my df, who was not the kindest of men, and then after he died, watched her trying to hold off turning on the central heating until November.
I started a pension at 24. And took on her heating bill.

My sister is a financial expert and has no pension. She says she would prefer to make her own investments.

are you paying into a Defined Contribution scheme now?

Umm just my lifetime isa.
£5k is nothing though is it in the scheme of me needing it in say 20-30 years time.

@MargaretHoulihan is she investing in something like residential property that can’t be held within a pension?

I disagree that £5K is nothing.
Sure, £5K isn’t going to fund years of retirement!
But if your pension ends up being enough to live on, but not enough to save anything, then £5K in the bank is just enough not to hold your breath every time the car makes a worrying noise, or the boiler is slow to come on... having £5K set aside for emergencies buys quite a bit of piece of mind.

I often see people say there’s no point because they can’t save much - I disagree, a small amount can be just enough to stop you worrying about unforeseen events.

Margaret - that's interesting - does she believe that the investment choices she can make outside of pensions (even though pensions offer a wide range of choices, even individual stock-picking if you use a SIPP) can make a return that compensates for the loss of the tax relief that you get in a pension?

If you are a basic-rate taxpayer, then if you invest £100 of post tax income can you outperform a pension that tops that up with £25 of tax relief on day 1? (Pension is even more valuable if you are a higher rate taxpayer).

I was contracted out and so will need more than 35 years contributions to get the new full state pension.
I was contracted out in 1990 for a few years as I was 19 and advised to do so by the pensions manager at the accountancy firm I worked for. Later I was advised to go back in and I did. It didn't affect my NI years as I have full 32 years age 48.

@Ellisandra @DadDadDad I'm not entirely sure of her reasoning. I know she has a lot of gold bars stashed away in a safety deposit box.

I, on the other hand, started paying the maximum allowable into my employer's pension scheme at age 30, and my employer contributes double the amount I do. Approx £500 per month goes into it. Apparently it will give me a whopping pension of £7000 per annum when I retire.

Apparently it will give me a whopping pension of £7000 per annum when I retire.

Mine is also forecast to give a rubbish amount assuming I opt for an annuity. However, I don't intend to take an annuity given the poor returns.

I have been a Sahm for years and only just started working again - I have decided to try to build my pension fund by salary sacraficing my whole salary - you can do this for up to £40k - but was a bit surprised to find out I have to retain the minimum wage element of my salary - or my employer can be done for not paying me minimum wage - even though I am paid well above min wage.. If I want to add the min wage portion of my salary to my pension everything becomes more complicated - I'll figure it out but why do they make things so hard?

Sorry haven't read the whole thread. In the last term of medical school so aged 22 we have an hour's talk from someone in finance who explained the NHS pension scheme, how it was differed from a private pension scheme etc. I has really stuck in my mind and I think all employers and or higher/ futher educational settings should offer something similar.

@LakieLady I have to work 7 years over my pension age

£7,000 per annum doesn’t sound a lot but added to the state pension is £15,700, if you have paid of your mortgage you can manage ok on it

Thanks this thread made me check my national insurance record. I missed four years contributions during my studies, and I need 9 more years contributions to qualify for the full state pension, as it stands. This is very relevant to me because I intend to stop my full time work around the time my partner retires.

I find it really difficult to square the imbalance between public sector workers' pensions - which are massively subsidised by the taxpayer - and everybody else. Public sector workers will be well set, with guaranteed gold-plated pensions funded in the main by the taxpayer. This old chestnut again. The average LA pension is about £5000. And of course it's subsidised by the taxpayer - it's part of the remuneration package for LA workers.

It's good that it's a defined benefit scheme, sad that so few still are. It's a way of moving risk to those who can least bear it and away from those who are better able to bear it.

I agree with ontheroses too, re endowments.
If people are signing up to what is the biggest loan of their lives, I don't have a lot of sympathy for them not taking the time to ensure they properly understood what they were signing up to. The principal of endowments is hardly rocket science. I don't / didn't work in finance, but wouldn't have dreamed of taking out a mortgage until I'd found out the way they worked. If you understood them, then you understood the high returns would only materialise if the interest rates stayed at the high levels, so, when they started coming down, the amount paid out would be lower, so you needed to bring down the amount you owed using the money released by the interest rate on your mortgage coming down.
Same with pensions. Why would you choose not to have free money given you ? . I am old compared with many on MN (started work at the start of the 80s) and have always paid into pension schemes from leaving school after my O-levels. My parents (so obviously a generation beyond that, born at end of 1920s) also paid into pension, and Mum also "paid her stamp" during the 60s when we were little and she only worked occasionally. So not sure where these people were living 'who didn't know'. I suggest they 'chose not to', which is an entirely different matter.

Ladies in there 40’s with no pension at all, they don’t think it’s a problem as the state will provide for them.
I'm not sure who there ladies are, nor why it is "ladies" and not "men". There have always been people who stick their heads in the sand and think everything will be alright, but it isn't related to being female, just a bit daft.

@Sicario

public sector pensions. Yet they still think they are hard done by

Agree backforgood... a mortgage is such a big thing, why wouldn’t you read up carefully about what you’re signing up to

My mother was pre war generation and she had a good pension and investments when she retired, early as it happens. She experienced problems with having to give up work when she married and then again when she had children and again when she moved with my father. But she always found her way back to a career and she always made sure she had a pension. She told me to get a pension and a career and not to rely on a man or the state for security.

Now I am on the countdown to retirement as are my peers we talk about our plans. As it turns out the people with the big house, flash car and fancy holidays financed it with interest only payments and no pension planning. Yes they will make money from house price increases but they aren’t going up anymore round these parts.

When I started working i entered into a 'contract' withe the government that meant I would pay tax and NI and in return, I would get a state pension when I retired at 60. The govt subsequently changed their part of the deal and pushed my retirement age to 65 to align with the retirement age for men. OK, I get that, and it makes sense for equality etc etc. But now the govt has changed the rules again and I must work till I'm 67 to receive a full state pension. It appears that there isn't enough money in the system, so I am being penalised for govt mismanagement. It rankles. A lot! I have private pensions from work, but the fundamental deal that I pay tax and NI to receive a pension at 65 has been disregarded. I don't have the facility to opt out of my obligations to pay NI, but the govt can act with impunity. I believe that the pensions for MPs has consistently risen well above inflation, and they always vote in favour of lining their own pockets.

Women tend to be in lower paid roles in companies. Low paid roles are often physical: shop, care, cleaning work. What is going to be the impact of carrying on with these roles another 7 years to be able to claim a state pension?

It isnt just the actual physical work but the relentlessness of it.

I think that raising the pension age will hit the low paid hardest. No option but to keep working.

I get your point Biscuits, and why it rankles, but I don’t think you can talk about it in terms of a ‘contract’ ... with whom for a start? The government is a series of changing rules makers who have to respond to the economic scenario they inherit (and yes I agree that often means inheriting the fall out from previous poor decision making.) You could argue the same point about any change in govt policy - eg no doubt people affected by the benefits cap felt it was ‘unfair’ that a limit was put on what they could receive.

The fact is, with people living longer, it’s no longer viable to have the same pension arrangements that were in place ... life expectancy was lower when the ‘rules’ you refer to were made. It’s inevitably going to cost more to provide for a population that may live 25 years beyond retirement age than for one where people are more likely to die sooner.

And it’s not just the state pension... pension reforms have hit everywhere. Teaching pension contributions have hiked up massively so everyone is paying in more to get the same (or less) out. Of course it rankles, we’d all prefer to have things a bit easier but when systems aren’t sustainable they need to change.