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?

I'm self employed. I do pay NI, so will get my state pension, and I will also have non-mortgaged house.

I save £100 a month into my own personal pension, which I know isn't enough.

As sad as this might sound, given my financial situation at the moment, I am kind of relying on the fact that each of my parents will be leaving me a property in their wills - worth £150k each. Now, I know they might need to sell that if they need care themselves as they get older, but I have to cling onto the thought that I will be left something, as I don't see how I'm going to manage on what I have otherwise.

I'm not contributing to a pension for the following reasons:

• I'm a single Mum and giving my son a good and secure live is my No 1 priority
• I inherited a house that I own outright and would and could sell if needed
• nearly all of my family have died between 59 - 70 and therefore realistically I'm not likely to be able to enjoy a long retirement (not being morbid, just realistic).

I’m someone with really good pension provision but I had a really decent career. I’m Gen X but have a final salary pension and must have been one of the last to get in to those sort of schemes. I also had a lot of luck with investments from a young age, being a nerd interested in economics and the stock market as a teenager paid off.

I’m someone that was always going to be perfectly fine in retirement. I’m the person you want everyone to be like op. But you are incredibly short sighted if you think all people can afford to make provisions like I have managed.

My SIL is the same age as me and does not have a pension, she has always had a really good income but would rather do stuff like take a year off work in her late thirties to travel. She has virtually nothing saved nor any pension. Your ire can be directed at the very few people like her who are really quite wealthy but just plain stupid.

Meruem Pension credit is reduced on a sliding scale for anyone with over 10k in savings. It’s worth noting. My sister was widowed two years ago age 63 a SAHM and no pension of her own , house paid off when she was about 60 and her DH had a small pension she was not entitled to any pension credit as she had too much in savings. Is currently selling her house to downsize and went out to work. I can see why she didn’t get credit but my goodness she was not happy. It’s the whole moral debate between assets and income. We had to disagree on that one.

I struggle to pay much into a pension. My ex and I had made provision with investments etc but it was all early days and then he walked out. I was considered young enough (late 30s) to be able to make some provision for myself.

Simple fact of the matter is the ex hasn’t paid maintenance in 12 years and with three children to provide for, the here and now is much more important. I am concerned about my long term situation but there is not much that can de done to improve that.

Although, the Go ernment could recognise the lack of maintenance issue and sod tthat out for me, perhaps?

I didn't feel particularly privileged when I had little to no money and was paying for the privilege of waking up at 5am
OP I spent six years at university paying for the privilege of getting an education and working nights to barely pay the bills. Then I worked nine hour shifts with no break, on a zero hour contract with no holiday pay or employer pension. Eventually that got me a public sector job educating disabled young men, but I ended up also helping them physically to hold pens and toilet etc because there were no funds to pay for support assistants, staying back unpaid after work and giving up my breaks to give them one on one support that was needed but they couldn’t afford to pay me for. My employer thanked me by halving my salary due to budget cuts and kicking me out when I got pregnant.

Lots of people make sacrifices hoping to get ahead in their career - some people succeed but an awful lot don’t. That doesn’t mean they’ve sacrificed any less - they just weren’t fortunate enough for it to pay off.

Excellent post @Acciocats

Ex hasn't paid maintenance in 12 years
I think this should be taken into account and held against him so that he suffers some sanctions ultimately, we need to find ways to prevent parents from walking away from their children completely like this

I've had a pension paid into for nearly 40 years. Apparently I will get £4000 a year from it. I don't know what I'm going to do. I have some options, which is more than some people.

@Meruem, if you are assuming that or duo era will get the same in 20 years than they do now, it's a very short sighted attitude.

Saying that, what will happen is what is already happening now. Those who invested for their future by working ft to afford a pension when they could have worked pt without it will find themselves taxed even more on their pension to make due for those who opted to work or because they could.

Really, the idiots are probably those who naively think they are investing for their own future!

Dontdisturbmenow you can argue about the tax system and welfare entitlement, but pensions are an incredibly tax efficient way to save for retirement.

The idiots are the ones that believe what their friend said about Gordon Brown stealing our pensions, and pensions being a con because they haven't saved enough or paid enough attention to provide a huge retirement income.

*No one needs to buy an annuity anymore. So if you manage to save 100,000 you could have 10 years on £10k.

It's called pension freedom I think and applies to defined contribution or money purchase schemes.

According to some articles £100,000 if managed well could last until you were 80!

This might be out of date info so please get up to date advice from a professional.*

I've got £100k and trust me, it's not going to be nearly enough to live on until I'm 80, no matter how "well-managed" . According to my FA, it's also more than 60% of people have in their pension pots.

@Meruem absolutely crazy to be relying on pension credits unless you’re happy with the idea of spending your older age worrying about whether you can turn the heating on

I’m 33 and have been paying into my NHS pension for 11 years but am considering coming out of it even temporarily.

Just now I have a lot of debt which I’m desperately trying to clear and with the extra money I currently pay into my pension I could pay it off quicker.

We have a mortgage free house and all our bills are paid so I’m fine there but I just have so little left at the end of the month due to debt. An extra £280 a month would help a ton to get rid of that debt quicker, I’d probably be able to clear it in a year.

My father in law worked all his life in the NHS, retired at 55 when you still could and died before reaching state pension age. My mother in law received his full pension amount for 6 months which has now been reduced by half. It makes me really think, what’s the point in struggling now when I might not even live long enough to claim my pension (given that the NHS pension matches the state pension age now) and if I do claim in but then pass away my husband and kids won’t even get the benefit of the pension I paid years for.

I’m speaking with a financial advisor in January about it anyway, see what my options are.

@JosephineDeBeauharnais I think another issue people need educating about is you hear these sums of money - 100k or 200k - and of course in the here and now that sounds like a shed load of money and some people mistakenly think that a pot like that is bound to give them a lovely lifestyle.

The fact is 100k will go barely anywhere.
Education is what’s needed

Yes the lack of education on pensions is terrible.

I only know what I do now thanks to the internet and that was from the age of 30.

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

So yabu to say it’s foolish and stupidity.

@JosephineDeBeauharnais I imagine the "manage until 80" is based on a few things. Having no housing costs, having the state pension, being part of a couple both with pensions, no debt and severely reducing the lifestyle.

If I can do all that above. I'll manage. Just. It won't be amazing but I'll manage.

I have almost that much and another 25 years of working to keep saving.

What will happen then?
will we have elderly people sleeping in doorways?

yet she just bought herself a pair of £100 boots

That might not be completely stupid if they last a long time. Better to pay £100 on a pair of boots that last even 5 years rather than £40 and they only last a year...

“The reason that the rich were so rich, Vimes reasoned, was because they managed to spend less money.

Take boots, for example. He earned thirty-eight dollars a month plus allowances. A really good pair of leather boots cost fifty dollars. But an affordable pair of boots, which were sort of OK for a season or two and then leaked like hell when the cardboard gave out, cost about ten dollars. Those were the kind of boots Vimes always bought, and wore until the soles were so thin that he could tell where he was in Ankh-Morpork on a foggy night by the feel of the cobbles.

But the thing was that good boots lasted for years and years. A man who could afford fifty dollars had a pair of boots that'd still be keeping his feet dry in ten years' time, while the poor man who could only afford cheap boots would have spent a hundred dollars on boots in the same time and would still have wet feet.

This was the Captain Samuel Vimes 'Boots' theory of socioeconomic unfairness.”

― Terry Pratchett, Men at Arms: The Play

Nope, not got a pension.

I think it depends on other assets and individual circumstances. I am opted out at the moment but have banked a decade or so of high contributions and for the next two years the priority is paying off a couple of debts. Our workplace pension is changing anyway (moving from TPS to contribution) so I will go back in on the new system.

I always read to allow about 4% of the pot as the annual pension. So a 300k pot would give you 12k a year.

I have a very good pension but my dh doesn't. He will be working till 67.

I have always been very frugal and careful about this sort of thing, but I can understand that other people may have expenses that prevent them from contributing at ideal times.

pensions are an incredibly tax efficient way to save for retirement
We don't know really know that because we don't know what we'll be taxed on it in 20 years time.

@DefinatelyAWeeGobshite, it is very sad what happened to your dad, but statistically, you are more likely to live 20 years past retirement than not.

Noone knows when it will happen to us so we have to make the choice of enjoying the money now or later. It's easy to assume that there won't be a later, but sadly, there is one for the vast majority and it's hard to then compare yourself having to live on little when others have it good.

For me, the main benefit now is the option to retire early as the thought of still working ft at 65 is horrifying.