Not contributing towards a pension is at best foolish and at worst utter stupidity?

[BHouse19]

I was really surprised (and concerned) having met with a large group of friends last night that some of them aren't contributing towards a pension (two stay at home mums for two + years and one who has opted out of her work place pension).

So I'm just wondering, if you're not contributing, how are you planning to survive during your retirement? Projections tell us that the state pension (if it still exists as we now recognise it) is in no way going to keep up with inflation.

Your husband or wife may be contributing to one but if the marriage breaks down the value of this to you is going to dramatically reduce for you as a single person

AIBU in thinking that saving for a pension is one of our most important financial responsibilities?

DeathStare speaks the most sense.

My Mil has no private pension. She gets the state pension and pension credit. She is very comfortable financially. As above, it’s a lot more than working age people can claim in benefits. She also gets winter fuel payments, free bus pass and ability to use pension age discounts at the cinema etc. I don’t assume this state of affairs will continue but the current situation for pensioners is actually pretty good so it’s no wonder people aren’t worrying too much.

it's hard to then compare yourself having to live on little when others have it good

The thing is though, how many people "have it good"? The people I know who had nothing and are now retired are managing perfectly well on state pension. The people who I know who earned more, saved more etc. Well they have been pretty frugal all their lives and have carried on being so! So they are not really "living it up" any more than the people on the state pension! Most people don't suddenly retire, sell up and blow all their money jetting off around the world. They carry on living the life they always have. I don't know anyone of pension age having to worry about heating or food. I live alone currently and I spend around £200 a month on various bills and £200 a month on food etc (which could be cut a fair bit if I needed to). State pension will cover that with money left over. If you've lived your life as a high earner, mixing with other high earners, then yes I can see there may well be a "lifestyle" you would like to maintain. But a good proportion of us are just "ordinary" people and will be able to manage adequately, without needing to be huddled under blankets eating gruel!

I’m very worried. My mum gets exactly what your mum does @Basilica but I don’t think I’ll get the same. And I know I won’t inherit any property.

£200 per month seems incredibly cheap for all bill, even with single occupancy reduction on council tax. I mean, water meter, electric, gas, phones .... and I imagine most people have the heating on more when they’re retired than when they were out at work.

Even for those managing to live frugally it doesn’t allow much for maintenance of the home/ repairs/ replacement of one off items like fridge or cooker

I think the state pension and pension credit is very low. Maybe enough to get by on but I’d never rely on that alone for a decent standard of living.

I can't believe the amount of people who are counting on inheritance!!!

It's all relative to how you want to live when you retire. I save and especially now I'm getting older I am way more sensible with my money.

I don't want to be cruising about the world when I retire. I'd rather stick pins in my eyes. I enjoy nature and my garden.

I'm not going to forfeit my holidays with my family now so I can save more for when I'm old.

I don’t assume this state of affairs will continue but the current situation for pensioners is actually pretty good so it’s no wonder people aren’t worrying too much.

^
Agreed.

can’t afford to have any savings let alone put it towards a pension

It's interesting you word it like that, like savings are the priority over the pension (for you), for me pension is a monthly expense like tax and student loan. I don't have a lot of savings- savings are the first thing to reduce when needed, but pension is ongoing and I would sacrifice many other things before stopping my pension contributions, including food (not entirely obviously!) It just goes to show how differently we all view these things.

You also get council tax support on pension credit. So your bills are only utilities.

Those that don't save for their own pension / housing will get topped up by the government. My mum who had a good pension died recently. My dad only has state pension and not even all of that as he didn't make enough contributions. He's going to get more in pension credit than my mum got for contributing to her nhs pension for more than 40 years. I'm pleased for him as I want him to be comfortable. He has his own house but if he didn't that would be paid for in the form of housing benefit.

The real elephant in the room is the fear that state pension in its current form will go for those that have private provision. All well and good for the really wealthy but not fair for those that struggle now by prioritising pension provision.

@managedmis Scary isnt it. I had this conversation with a friend, she's a long term renter with loads of debt, not a chance of buying a property. She told me she's not too worried as her mum and dad will be leaving their home to her and her brother, I asked her what happens if they both need to go into care and she was stumped. Really bad idea to bank on mum and dad.

I currently have 79p in my account to last until Monday when my tax credits go in, better than last week when I was £132 overdrawn. I'm 45 and have no pension as I can't afford one but my kids are fed and have a few nice presents for Christmas, so thanks for calling me stupid/ foolish. Which child do I start with for the not eating rota to get my contributions together? Eldest or youngest? 🤔

‘My dad only has state pension and not even all of that as he didn't make enough contributions. He's going to get more in pension credit than my mum got for contributing to her nhs pension for more than 40 years’

really ?

I’d be very interested to know the actual figures involved there.

I've paid in to my NHS pension since I joined. I've never had the money in my account so I don't miss it.

Even if I opted out it's not as if I'd be getting the £280 extra in my account, it would be subject to tax deductions etc. I'd also no longer be getting the significant employer contribution and my family wouldn't be entitled to death in service benefits should anything happen to me before I retire.

’My dad only has state pension and not even all of that as he didn't make enough contributions. He's going to get more in pension credit than my mum got for contributing to her nhs pension for more than 40 years

My mum was the same, a SAHM who never made NI contributions. She gets around £700pm in state pension and pension credit.

I'm young (ish) and tbh the extra £70 a month to me right now is important. I am drowning in debts (my own fault) and have a high rent (in a flat share in a popular northern city). As soon as my debt is sorted I will of course be paying into my pension but it is low priority for me right now. Its different for different people but generally I would agree.

Ffs I cannot stand the notion that those who don’t contribute are lazy and stupid. Shall I not feed my kids so I can plan for a retirement I might never reach? A very good friend of mine paid a fortune into her personal pension and died a year after retiring!

@Acciocats

But then how do working age people manage on £73 a week? If you can only imagine just getting by on state pension? I raised 2 kids on £100 a week for 3 years (rent and CT paid by HB/CT benefit). Yes it was some time ago and it wasn't fun! But..even then I never had to leave the heating off because I couldn't afford it, we never went without food (there were no food banks then either). Yes it took planning and there weren't any extras but it was doable and we were relatively happy. I didn't spend the whole time depressed!

That's why for me, £168 a week just for myself, seems ok. But then I don't have a lot of outgoings, my phone for example is £10 a month payg. I'm not bothered about a swanky new phone on a £50 a month contract. If I don't care about it now, I doubt I'll start caring in retirement! I don't do things like go to the gym or have beauty treatments because I don't want to. I could afford to at this point in time but it doesn't interest me. So my outgoings are low and I see no reason for them to increase massively in retirement. In fact I even work from home currently so my heating is on right now!

My point is not that you can live a luxurious life on a pension but at the same time, it is enough money to have plenty to eat, be able to put the heating on etc. And if people need something like a new fridge there are options, freecycle, bigger charity shops, second hand etc, if they can't afford it a new one. I just don't think anyone should be "terrified" of reaching pension age as some people are saying here.

Those that don't save for their own pension / housing will get topped up by the government.

I don't think we can assume that will be the case in 15 or 20 years time, unless we're prepared to fight for it. Unfortunately there is a growing tendency to begrudge what some people see as "the feckless undeserving poor" "getting something for nothing" when they've "worked hard" for their money - we've seen some of that on this thread - so who knows if the appetite for the fight will be there in sufficient numbers and with enough clout to make a difference.

@Meruem My posts have been about a different demographic... people who are earning decent money but don’t make pension provision, or who have husbands who earn high salaries but don’t work/ work part time and don’t have decent pensions of their own. Because these people will be in for a shock as they’ve underestimated massively the change in lifestyle when they want to cut down/ stop work/their husband dies etc I can’t imagine the people i know in this position being comfortable living on around £700 a month, or being at the mercy of govt changes to state funding

I agree with you broadly that if you’ve never earned much and have been reliant on tax credits it’s not going to be a drastic step to continue living frugally!

£180 pw pension credit. Plus lower rate state pension. The pension credit is more than my mum got from her nhs pension, my dad couldn't believe it when he was told. He also gets dla but I think that simply doesn't count for income purposes. I don't know the ins and outs of qualification for pension credit but he owns his own house. Little (but not nothing) in the way of savings. He doesn't pay council tax either and gets winter fuel payment and for now a free tv licence.

I have also seen the situation where someone who has barely worked all his life gets more pension credit than my mother, who, because of gaps in her NI when she was raising kids, doesn't get the full state pension. Really utterly unfair. In fact, I'd better stop now before I start getting really pissed off about pension inequality wrt women.

For what it's worth I think the biggest thing you can do to ensure your financial wellbeing when elderly is to try to own your own home outright. I know that is out of the reach of some but it is much easier to live comfortably if you are not worried about housing.

I think what terrifies a lot of people is the loss of status they will go from someone who lives and expensive lifestyle to someone who lives a more basic lifestyle with no luxuries
I could be happy on a fairly low income because I enjoy being frugal and I my shun extravagance, but if part of your identity is expensive holidays and clothes then you won't enjoy it so much