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?

YABU and also speaking from a place of privilege.

Exactly this.

I don't have the spare funds to be able to contribute towards a pension. But I have a mortgage on my home that will finish when I am 58 and then I will sell up and downsize and live off my savings - and probably move abroad.

Get off your high horse.

When I was full time and worked for an accountancy firm in London all the companies use your pension pots to gamble with anyway!

DeathStare your posts throughout this thread have been excellent.

@mrsed1987 what sort of pension is it? You might be able to keep paying in a small amount - even just £20 pcm? It's worth investigating, even if you then decide not to contribute at least you have actively made that decisions rather than just letting it go.

There’s another thread right now where an OP is being financially abused and people are advising her to get back into work and start saving her own pension.

Is that also being condescending? No! Lots of women on this thread will have the means of paying into a pension but are not. It’s those women OP is speaking to and there is nothing wrong with that

I'd quite like to invest in property as a way to bolster my pension as many PPs have said they do but I can't because I don't have a deposit and if I did I'd lose the employer's contribution so pension contributions make most sense for me at this time.

One wee tip that might help others, every year when the tax free limit of earnings goes up a little I increase my pension contributions by 1%. It means I hardly notice the fact it's gone.

If you happen to work in an industry that gets a small pay rise (even if below inflation) that helps too.

YANBU I've been in the NHS scheme for 18 years on a decent banding but part time.
I've also always put a small amount in a top up pension but that will just equate to a nice holiday as so small.
I will get £4,000 a year to live on as it stands, plus state pension once I am 67. (I can contribute for up to 15 more years though and am full time now - basically every two years more will get me £1000 more a year now - but there's no way I can stay in this role for that long, so will likely take an earnings cut at some point). DH has a similar scheme and more years than me. We are in an amazing position compared to most but it still worries me.

YABU and also speaking from a place of privilege Which makes 'privilege' a bit of a redundant word, doesn't it? That's the Cult of Me in action, if anyone who has something I do not is privileged then we are all oppressed! I won't live like that, why would anyone hold to that?

It is trite, sound bite claptrap and we need to work out where it comes from. If fear then work out what we are afraid of...?

I don't have a pension, I was a single mum for years and there was no way I could afford money being taken out of my wages. I could have sold my house and downsized but I made the decision to keep the house with the intention of downsizing when my older DC have left home. The money left after purchasing a smaller property will be my pension pot. Even though I have been with my DH for 15 years the house is solely in my name.

I would love on one of these threads (which I've seen crop up again and again) for an actual pensioner living on the state pension to post about whether they are managing or not.

The current state pension is £168 per week, that's more than I used to get as a single parent of 2 kids! My mum lives on it just fine. No she doesn't have flash holidays or anything like that. But she eats well, her bills are paid, she goes out for coffee and cake several times a week, and has a dog, who she spends a lot on! She enjoys her life. Yes there is the argument for younger people about the pension age going up, whether state pension will be means tested etc etc. But I am 50 now, without a private pension, and no I'm not worried. I can live on £168 a week quite easily. In fact, day to day I spend less than that right now. If I lost my job tomorrow I would be expected to live on £73 a week UC, that's nearly £100 a week less than the pension! I bet all the people struggling to survive on that would be thrilled with an extra £400 a month. If i was in my 20's now I would of course be thinking very differently, but I'm not and I'm certainly not going to lose any sleep over the future.

There are a lot of people who genuinely cannot afford to save a penny towards retirement.

However, there are also a lot of people who 'can't afford' it. A colleague at work 'can't afford' to pay into the workplace pension and therefore get the contributions from work. Yet she buys lunch out and a coffee every single day. The office has a fridge/microwave and hot water tap, so she could easily bring her own lunch, cut out the coffees and save towards retirement.

I have always paid into a private pension when I've been working and for most of the time I was a SAHM as well. I don't have a very big pot, but I'm putting 10% in for now and I'm 28 years away from my current expected state retirement age. At first when we had DC we prioritised adding the maximum to DH's pension that the company would match.

We are also very fortunate that houses where we live have been rising in value at a crazy rate (10% in this last year alone), so we are hoping that the house will form part of our pension pot. As soon as the DC leave we can downsize and move out of the good school catchment to release money.

I had a work pension for 15 years and then I left to start up my own business. I stopped my pension contributions at that time as I was not making enough money to contribute. I was about to restart it last year when my statement came through and my pension fund ( a pretty safe one, no risky investments) lost 25% of its value. No explanations from the insurers as to why. Now I sit here asking myself why I would be putting more money into that fund when that can happen.

Luckily I own my house and the mortgage will be paid off in the next few years so we can downsize as necessary when the DCs move out and at least have some money to live on but I am now completely wary of pension schemes.

@Meruem - my mum gets state pension and pension credit and manages very well indeed. But (big but) she owns her own home.

Lots of women on this thread will have the means of paying into a pension but are not.

How on earth do you know that?

GinAndTings
When I was full time and worked for an accountancy firm in London all the companies use your pension pots to gamble with anyway!

This is the kind of scaremongering and half truths I mentioned.

If you have a defined contribution pension, you have the ability to select your own investment strategy. This can range from cash, i.e. no investment risk but inflation will erode its value, through to 100% small companies in developing companies, a high risk, high reward strategy. You can select ethical investments that exclude arms, tobacco etc. Some even offer funds that can invest in renewable energy and socially responsible employers.

To just say, 'they gamble with your money' is not helpful and is quite frankly a badly researched banker bashing load of rubbish. Worse still is that many people listen to this and are scared away from making informed long term decisions.

Thank you, @DeathStare, for taking the time and having the patience to explain reality in clear and simple terms to the preachy OP.

Pensions are completely non negotiable to me, I've never seen it as optional, you start a job and you sign up to the pension scheme like you accept taxes coming out, that's how I've always seen it. I'm civil service and was SHOCKED to find out a colleague doesn't contribute, we pay a measly less than 6% and they top up over 26% you'd be an absolute fool to give that up. My previous private sector pension was shite, I still paid in though.

Is that also being condescending?

Are the posters encouraging her back into work calling her "foolish" and "utterly stupid" in the process?

I can live on £168 a week quite easily.

Whether anyone can or not depends fundamentally upon their housing situation, and we are rapidly approaching a time where an increasing number of people will retire without ever having got onto the property ladder, with any parents' property they may have hoped to inherit having been sold to pay for care costs in the parents' old age and with a dwindling reserve of social housing to fall back on. If you have private rent to pay, £168 isn't very much at all.

JustHereWithMyPopcorn

I'm sorry you've suffered losses. But there are a number of reasons the fund lost money. Don't fall into the trap of disregarding pensions because of the poor performance of a certain investment. A pension is the wrapper and its value depends on what is 'under the bonnet' so to speak.

DeathStare your posts throughout this thread have been excellent

Why thank you very much

I am more frustrated by the amount of parents who don't ever really teach their children about finances - and I include my own, otherwise wonderful, parents in that.

Teaching children simple budgeting, how credit works, how pensions work and show them why it makes such a difference to start early, etc. could make such a difference. At least it would have to me who left for university without any real concept of how to do any of those things. As soon as I left, my finances were my own concern and I just had to muddle through.

While many people only just have enough money to survive, many others live to their means and so if they always put aside 15%-20% of their wages into savings and pensions then they would only ever be used to living within the rest. The key is to start early and for this to be habit, where at all possible.

Are the posters encouraging her back into work calling her "foolish" and "utterly stupid" in the process?

Why would you assume that OP is calling those people who don’t have the means to contribute to a pension foolish and utterly stupid?

Human nature tends to default towards short term self-interest, in order to counter this we have governments so that we can collectively incentivise what is in our mutual long-term best interests

a wealthy modern democracy ought to be able to set things in place so that we don't have elderly people living on the streets because they didn't personally make provision for their old age

here here @DeathStare

@Havaina
My mum is in a rented place but all the rent is covered by housing benefit so she pays nothing. Again there is the argument that this may not be available in years to come but currently, it is.

Whilst there is a huge lack of social housing for working age people, there is actually a large amount for retirees. I currently live in a HA property and I had a look out of interest at their "over 55's" housing. They had loads of places available at a rental cost that housing benefit would be fine to cover. And I'm in London. People with high private rental costs currently can apply to places like that when they reach pension age and they'll be sorted. They don't need to try and keep on their high cost private place. If anything, home owners could find themselves worse off. If they can't downsize for whatever reason and then the boiler breaks or the roof needs repairs they have to find the money for that. Someone who is renting doesn't have those worries.

I think you need to either have a lot, enough to easily fund yourself, or very little, in order to get all the benefits. It's those who are in the middle ground that will lose out the most. That's why I think frantic saving over the age of 50 is a bit pointless, unless you're a very high earner.

Lots of women on this thread will have the means of paying into a pension but are not. It’s those women OP is speaking to and there is nothing wrong with that

Is it though, @Havaina?
And isn't it up to the OP to define who she is speaking about?

She didn't specify any distinctions in her OP, so either you are correct, in which case is there also nothing wrong with wondering why she is not also concerned about the distinct group who genuinely cannot afford a pension. Almost as if that group were not even on her radar, innit.

Or you are incorrect, in which case there is also nothing wrong with wondering why the fuck she is scolding people who cannot afford pensions for not having pensions ...

Either way, it's not a good look.