To ask whether you would choose Miserably poor now or later

[PoorPensionerToBe]

So I’m 48 single mother and last year I was made redundant. Thankfully I have now found another job but now have zero savings. Whilst out of work I lived very very frugally and by Christ it was miserable !
I bit the bullet and worked out how much I would need to live on when I retire and how much extra I need to pay into pension over next 19 years to achieve that assuming a 2% growth rate (apparently this is standard). It was very sobering. Basically I could do it, but would need to watch every penny which isn’t a fun thing to envisage for the next 19 years. This is assuming of course that I stay in employment earning at the same level as I do now. If I get made redundant again I think it will be difficult to get another job paying the same. Also I could die by then. Also the growth rate may be less than 2% or even negative. Being a pensioner in poverty I think would be very miserable so feel I should prepare for it but not sure I can commit to 19 years of penny pinching

what would you do ?

It depends on a couple of things. Number 1: will you have accommodation costs? Are you renting or will you have a mortgage paid off? That makes a huge difference.

All things being equal, it’s easier to cope when you’re younger. Things that are miserable and inconvenient when young become a real threat to health when you’re old.

It's definitely better to be frugal now and have a better prospect when older. You also have more opportunity now to improve your situation, perhaps get a better paid job. Or find a stable relationship and benefit from pooled resources.

You could aim for a compromise and put a small amount less than you calculated into your pension to allow you to be a little less frugal now.

I think it depends on the age of your child(ren) and what impact being right for money will have on them.

Tight! Tight for money.

I'm just not planning on retiring. I have a pension, but forecast is £1000/yr. DH has next to nothing in his pension and hasn't been in a position to pay into it since he was made redundant in 2020. We are going to be screwed financially, and can't do anything about it at the moment.

I will have paid my mortgage off by age 65. I could downsize then (from a 2 to a 1 bed). In todays money I would have around £60k lump after costs (I live in a fairly cheap area with low salaries) and household bills would reduce about 10%

I'd enjoy life now, while you're young enough to do things. Health can't be taken for granted and who knows what the future will bring. You might have other options to earn money in the future, especially when the dc are grown.

My child is 13 and expect they will be living at home for the next 15 years.
I’d love to get a better paid job but there are limited opportunities where I live and based on the average around here I’m reasonably over that. Also I’m nearly 50.

Remember that the state pension, if you have a full pension which if you are working you should do, is currently worth £10 grand a year and will continue to be uprated by inflation.

So no housing costs and £10k to live on before you've saved anything.

previously I always thought I’d have a partner but I seem to pick the real twats. Also there’s slim pickings for my age group and I don’t think I could get together with someone I wasn’t attracted to just to save on finances. I’m open to it happening and it would be great if it did but think it’s not very likely

This might be a really bad idea, it's just a thought out loud. But if you prioritised now, and told your child, could they be relied upon to help you out a bit in your retirement? Presumably they will also benefit from you not penny pinching quite so much now.

This is my vote too. Also, I think I'd rather be less miserable now and hope something sorts itself out later, rather than be more miserable now and hope there'll be a payoff twenty years down the line.

Plus you’ll get pension credits etc if you are on a low pension. Find a balance in-between living in penury and getting some enjoyment out of life. Put some money away in a pension but have some fun too.

Neither, I'd look to earn more money.

If your child intends to live with you for 10 years as an adult they can contribute a bit to household costs?

Could you prioritise looking for a job/career with a decent pension?

I’d look to earn some more money. Maybe downsize sooner and tell your DC they need to be out sooner? Or earn some extra money now whilst you can?

Once your child is an adult they can be expected to contribute to the household by paying rent, share of the bills etc which will make you better off.

Spend it now because pensioners on the basic money usually get ripped up you don’t want to scrimp fro the next twenty years to end up £2 a week over the level for extra help

Politically it's much more acceptable for government to support low income pensioners.

So.dont scrimp now

Also you have almost twenty years until retirement, that's a very very long time to be scrimping

And as soon as your child is an adult earning they will contribute to household bills

There is nothing that requires that you reside in, or retire to, this country. You could move abroad any time in the next two decades and relax somewhere cheap and warm and breezy. Maybe your diet would change a bit, and you’d have to look after your health with a little more diligence than those in this country, but it’s an alternative worth considering.

is there a reason you assume our child will
love with you until 28? S/he can contribute from age 18 and you can save some of it.

You can work passed 65. You’ll have paid off your mortgage and can plough any money made after into a pension. Especially after you start drawing your state pension.

There is no mandatory retirement age so be prepared to be doing some sort of part-time work at 70+ if you are capable of working so enjoy life now.

I am slightly younger than you but have friends in their early 50s who have already lost their (female) partners.

I will get full state pension (assuming it’s still there then). However I don’t think £10k would cover gas, elec, water, council tax broadband, tv licence, mobile, house insurance, food, house maintenance, hair cuts, clothes, glasses. I figured I’d need £6k extra from my private pension (in todays money) - also allowing for 20% tax on £3k of that so have calculated on that basis. My pension pot is pretty dire but I think if I worked it out it is not worth much more than I’ve put in over the years and dropped by about 20% after truss’s budget and has only regained about half the loss back

Well, £10K a year might cover your gas.
If you’ve got a garden you could grow vegetables.