Page 4 | Parents think I don’t have enough money in pension

CakesOfVersailles · 22/12/2021 22:19

@dundydee yes that's true, it's always worth examining what kind of pension schemes are available to you and whether (even accounting for tax relief and employer matching) you might be better allocating money to long term investments outside of pension schemes.

Cocomarine · 22/12/2021 22:22

@SpellBounds

Meh. You can only do so much and you might not even get to retirement age. Within that time you might emigrate. Or win the lottery. Or receive a big inheritance etc etc. Just do what you can do in life and don't spend too much time planning and regretting choices etc as so much can change.

🤣 I get your lottery and inheritance points (though don’t agree that’s a reason not to plan) but why does emigration mean you don’t need a financial plan for retirement?

JingleBellez · 22/12/2021 22:23

@bestbl

I'm 40 and have zero

39. Ditto :(

dundydee · 22/12/2021 22:25

I'm saving in a separate ISA investment vehicle & I pay AVCS so I'm trying

Bagelsandbrie · 22/12/2021 22:25

That is a LOT of money! You’re doing really well. Lots of people like me - aged 41- have no pension whatsoever. None. (My lack of pension is due to chronic ill health and caring for my disabled child). I don’t think your parents have a grip on reality.

watchingrnfire · 22/12/2021 22:30

@EmpressCixi can you please explain about the investment return? Where have you invested in or how does it work? Really interesting

latetothefisting · 22/12/2021 22:32

@curtaintroubles. But OP has bought a home. So how is that a relevant point?

Of course it's useful for her to know that she already has nearly as much in a pension scheme as someone retiring today, given that she has, roughly, another three quarters of her working life to add to that.

Isn't the national average how we calculate poverty levels generally? Why wouldn't it be relevant to pensions?

Do we have huge levels of poverty among our retired demographic? I thought that from the last few years retired people had on average more disposable income than workers?

tokyodreams · 22/12/2021 22:33

@Helena1985h

Talking to my mum and dad about pension today. I’m 35 FYI.

They asked me how much I’d put away as were saying they wished they’d focused more on their pensions when young. I logged in and had a look and I have just under 55k.

They seemed to think that was way too small, and they’ve properly freaked me out TBH. Is that really not a lot at my age? I sort of assumed I was doing okay!

Boundaries! It's none of their business what's in your pension pot I can't believe you told them.

NeedAHoliday2021 · 22/12/2021 22:36

I just assume I’ll be working until I’m 80. I pay 10% into pension plus employer contributions but only since I was 32. My pension before that are tiny but there’s some in 2 other schemes. Hoping the nhs one will be good enough. That said, we have a 4 bed detached home that I would look to downsize in my old age so money from that too.

Blueraccoon · 22/12/2021 22:37

You’re going to die a pauper. Fact.

Laufeythejust · 22/12/2021 22:38

That looks pretty decent to me. I am 30 and Dad made me sign up to the pension scheme with my first job (I was 16 and on 11k per year!) I was in that job for 6 years and haven’t paid in since (my current job has a final salary one) I have just checked on it and it’s at 30k now- Dads give good financial advice!

It seems like a lot to pay in though- I would pay in as much as you can comfortably afford it’s definitely worth it whilst you’re young and it has time to grow.

Troublesometooth · 22/12/2021 22:41

I have a teachers pension and I have no idea how it works to be honest.

It says I have an annual pension amount of £9600 but I don’t know how much is in there altogether.

Elphame · 22/12/2021 22:41

The pension industry is all about saving a lump sum during your working life, with which you buy an annuity at the time you retire

This is really outdated information. There is no requirement to buy an annuity any more and there is a lot of flexibility with pension savings nowadays.

RowanAlong · 22/12/2021 22:44

Why are you talking to your parents about your pension? It’s none of their business!

polkadotty2 · 22/12/2021 22:47

Sorry how do you check how much you've paid in so far?

AuntyBumBum · 22/12/2021 22:47

@Troublesometooth

I have a teachers pension and I have no idea how it works to be honest.

It says I have an annual pension amount of £9600 but I don’t know how much is in there altogether.

It's a defined-benefit scheme. There is no underlying lump sum assigned to you; just a guarantee of your annual pension. But to generate that income via an annuity from a lump sum you'd need to have saved around £350,000.

Troublesometooth · 22/12/2021 22:51

@AuntyBumBum that makes sense thanks.

I’m only working 2 days a week so am not paying much in at the minute. This thread has made me think about whether I need to do something about that though thanks!

Woofydogg · 22/12/2021 22:52

I had around £200k in my pension at age 40. It was (and still is) projected to give me a pension of around £6k a year. £6k, thats it. You need an absolutely shit load of money in a pension to have a decent standard of living when you retire. It is so worrying and the country is sitting on a ticking time bomb of generations who do not have final salary pension schemes realising that they will be existing on barely no money at all

beenthereboughtthetshirt · 22/12/2021 22:55

45
zero pension
pile of debt

you won't starve

VestaTilley · 22/12/2021 22:56

I’m assuming you’re in a defined contribution scheme, hence the pot of cash. If you don’t know, please check.

£55k is ok, but not enough. You need at least £300k to be “comfortable but not loads of cruises etc” sort of level by age 68.

The pot can be made up of your contribution, employers and tax relief, but that’s the sum you need to aim for.

Increase your monthly contributions in the New Year. Don’t panic. Don’t bury your head in the sand.

AuntyBumBum · 22/12/2021 22:59

@Woofydogg

I had around £200k in my pension at age 40. It was (and still is) projected to give me a pension of around £6k a year. £6k, thats it. You need an absolutely shit load of money in a pension to have a decent standard of living when you retire. It is so worrying and the country is sitting on a ticking time bomb of generations who do not have final salary pension schemes realising that they will be existing on barely no money at all

I agree. And if this is combined with even those with pension savings abandoning the dull safety of an annuity to use "draw down" instead, so to gamble on stock-market performance and their own life expectancy then there is going to be a cohort of pensioners in an utter mess.

VestaTilley · 22/12/2021 23:01

@Beancounter1 you’re wrong I’m afraid, the state pension was never designed to cover all your retirement needs - it was designed as a safety net, keeping the poorest pensioners out of dire poverty; it was always expected that all workers would top up through their own arrangements. When it was first instituted pensioners weren’t expected to live more than two years beyond pension age. If the state had to provide a really good pension for everyone the country would go broke. No, I’m not a Tory, this is just plain economics.

Thank God the last Labour Govt kickstarted the auto enrolment process.

ChristmasCurry · 22/12/2021 23:02

No one I know with a pension is taking out an annuity, all are taking a pension drawdown instead.

Nannyamc · 22/12/2021 23:02

Started at 28..100 per month.
Increased each year by double. When mortage finished at 50 put that amount in. At 63 i now have 400000. Will get approx 100000 tax free. 12000 per year on balance but can increase if i need. Great way to save.

ttcpatronisers · 22/12/2021 23:03

I'm 35 OP and have exactly 55k too, I think it's good! Lol