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 ?

So my thoughts with this would be that I would lose child benefit at 18 so would expect my child to give me that towards their living expenses and also buy their own clothes. Without sounding horrible, my child isn’t very bright (bordering on special needs but not quite) and career prospects aren’t that abundant - I would be happy if they were able to maintain a min wage job, also they would need to save for anything they needed eg car, flat deposit, house deposit, holiday, I would feel really shit taking a load of money off them. Plus even if I did I couldn’t rely on that as income as they could move out at any time with mates or a girlfriend but don’t envisage that being til he’s in his late 20s because renting / buying is expensive and not easy to do.

yes good point I could work part time I guess after retirement age assuming my health will be good enough and companies are happy to employ oldies

TBH you’re pretty damn clued in on the maths.
You're a planner and a thinker.
Me thinks between now and then you’re gonna do just fine.

It is sobering.

I’d more or less try and be frugal now, although not to the detriment of your health.

Can you work on earning more?

Omg I would love to do that ! My loose plan was to retire to Spain one day but Brexit has scuppered that !

I am bemused so many people think it’s easy just to earn more if I focus on it. I earn quite a bit more than the average in my area and I can’t think of anything I could realistically do to increase my earning potential.

I think I would do a bit of both. Save what you can now and contribute to your pension, obviously don’t go on super-lavish holidays and get into debt etc but I wouldn’t live miserably- l wouldn’t want to never go on holiday in the uk, treat myself to a coffee etc. Not to be morbid I have many friends and relatives who never made retirement. Or would you consider some kind of side-hustle or part time job for part of the year, the money from which you could see as the treat money?

Thanks @ElliF !

Have you factored in the 25% tax refund contribution that the government makes towards your pension?

Have you worked out the growth on a compound basis?

Just in case your pension prospects might be better than you think.

Based on the fact that my mum died recently at only 65 I’d live for today because tomorrow isn’t guaranteed.

Because, like a PP said you seem super switched on, you’ve done the maths, you’ve planned for the future.

I know it could come across like a throw away remark. But I think it’s meant as a compliment.

Sorry for your loss @IggyAce 😢

Write a book.

I'm not really in the same position as you but I'm a single mum of a 2 year old with the same choice, poor now or poor later. Poor now while I spend money I don't have on childcare I can't afford to enable me to work full time and work for the future or stay poor and have limited earning potential in the future. I hope its at least comforting to you that you're not alone. The easier route is never the easier choice in the end;

I agree that living on the state pension alone would be a pretty grim existence. I’d try to find a balance. Definitely save something for your retirement though. Being old & poor would be utterly miserable.

I live my life in the here and now. Four years ago I was married to a man who blew everything we had on racing horses and booze. We rented our house and most months my mum had to pay our rent because I had three young children.
I left him, and now am in a much better position. I'm with someone who has improved my prospects immeasurably and now part own three properties. Don't write off today for tomorrow, you never know what's round the corner.
If it hadn't have worked out for me I'd just plan on an early death. Being poor is fucking grim.

So I’m glad I posted because I hadn’t considered the option of working part time after retirement age - that would give me more leeway with spending now. Tbh I don’t see myself ever having another holiday abroad, but would like to be able to treat myself to nice food / spa / nights out / new outfit now and then.

this is probably a controversial question but do you think by then they will have legalised euthanasia in the U.K. because if I’m alive but in poor health and couldn’t work I think the misery of ill-health and poverty would be more than I could bear… god I hate getting old, never thought like this when younger

It is if you have assets and no help.

Sorry your post reminded me of someone I know who died last year who only had the state pension and was terminally ill but owned their own property. They were expected to sort out and fund their social care.

My husband retired with a private pension of £4,500 a year. This has an impact on his state pension , he gets £7,200 a year not £10,00 despite having full working years. Something to think about.

@PoorPensionerToBe you have no idea how long you may live.

I'm old, I've got money in the bank and no debts. But I'm too frail to do anything much with it.

My advice is to live well now, let tomorrow look after itself. After all, you may not even be here tomorrow. And if you are here, and are poor, well at least you will have good memories.

If you're still here in twenty years time, and poor, well, to be blunt, you can always arrange to die.

sorry if that all sounds pessimistic, it isn't meant to be. I've had a great life, wonderful memories. But I really wish I'd had the money I now have, when I could have used it.

how is that right? I thought private pension was on top of state pension (but not pension credit) as what the feck is the point otherwise ?

You only pay 20 percent tax above personal allowance not on the whole 15k!

That’s a service most of our inner cities offer between the hours of midnight and 4am.

This only applies if you were contracted out while working though. It doesn't apply to everyone, so don’t scaremonger with this.

Are you talking about people who were contracted out of additional state pension?

Yes I figured I could live on around £15k after tax