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AIBU?

Share your dilemmas and get honest opinions from other Mumsnetters.

Original poster

Pensions - is it really worth saving very small amounts esp if you've left it late?

60 replies

FuckingFinances · 12/04/2023 18:31

It nearly seems like if you have not started this in your twenties, or are not a higher earner who can funnel megabucks in once you are over say 35, there is very little point?

Frankly I don't really understand the various calculators well enough, I have several chronic illnesses causing fatigue and brain fog and don't have the energy to read or process a lot - these illnesses play a massive role in why my earning capacity has been so shite anyway - but it seems like you need a huge giant pot to get any kind of modest return?

I am self employed part time, and hitting 40 and won't be entitled to a state pension, I'm abroad but even if I was at home I wouldn't have enough contributions at all.

Just feeling depressed and a bit worried, financial stuff is so hard.

What is everyone else doing who hasn't managed to save enough?

OP posts:
3BSHKATS · 12/04/2023 20:11

I was told today - haven't fact checked it but if you have less than £30,000 in a pension you can take it all tax free at 55. Even if you just got to that figure it would buy you a car or pay for house repairs

Original poster
FuckingFinances · 12/04/2023 20:14

1offnamechange · 12/04/2023 20:06

I really don't want to worry you more, but in the nicest way possible - if you're not going to get state pension and you don't currently have a private pension and little hope of creating a sufficient one, how are you planning to live once you get too old to work (which, if you are struggling with ill health now, might be at a younger, rather than older age than average)?

Do you really think this has not occurred to me?

Do you genuinely think people in my position just go gaily skipping along until the penny drops at some point because we're too thick for this to have always been a worry?

I am curious. What would you suggest I should have done differently in order to save properly given I became sick at 11 years old?

OP posts:
Greenfree · 12/04/2023 20:22

I would definitely look on the HMRC website and find out how much you need to pay to qualify for the state pension, I think you need something like 25 years worth of national insurance contributions but you can pay for any missed years and a benefit claim would count towards your contribution (JSA,pip etc). I don't think it's ever to late too pay into a pension, if you pay £150 into then with tax relief from the gov it will work out at about £187 that would be going into it

3BSHKATS · 12/04/2023 20:27

@FuckingFinances were you not getting child benefit at all ? Doesn't that pay your stamp ?

Original poster
FuckingFinances · 12/04/2023 20:34

3BSHKATS · 12/04/2023 20:27

@FuckingFinances were you not getting child benefit at all ? Doesn't that pay your stamp ?

No, unfortunately I have never been able to have children because of my health. I did want them.

OP posts:
Ella6 · 12/04/2023 20:36

FuckingFinances · 12/04/2023 19:06

I always thought any kind of financial advice would be for those saving a lot more per month, including ringing a helpline.

Is 150 just too small to make any difference, really?

If you’re under 40 you’d be mad not to open a LISA.

CherryCokeFanatic · 12/04/2023 20:36

Yeah no point now may as well just have no savings and struggle in your retirement

Original poster
FuckingFinances · 12/04/2023 20:38

If you’re under 40 you’d be mad not to open a LISA.

I looked into this and if I am not mistaken, I can't do this as am abroad.

I wish I had had the means to do this before I left the UK! It seems like a great deal.

OP posts:
moveoverye · 12/04/2023 20:40

Are you planning on moving back to the UK?

Muchtoomuchtodo · 12/04/2023 20:44

This sounds very stressful. Have you ever had advice from a professional about your pension arrangements?
You may get more specific advice @FuckingFinances if you’re willing to say where you live, how long you’ve lived there and if you’re planning on staying there.
I don’t understand how you’d qualify for a uk state pension if you’ve not contributed.

Paulisexcluded · 12/04/2023 20:48

If your health affects your ability to work this much, would you be entitled to some form of disability benefit? Perhaps only in this country..apologies..but worth looking into?

Radi06music · 12/04/2023 20:53

I only pay £60 per month, matched by employer. That is smaller than the small amount you mention

Radi06music · 12/04/2023 20:53

Thinking of starting my own thread now! What's normal to pay in?

ArcticSkewer · 12/04/2023 21:00

You may be better off without a pension - often there is a safety net for the absolute poorest whereas those with a small pension are not entitled and so don't get the additional benefits - in the UK there is pension credit - if you are entitled to pension credit you get other stuff for free as well - it's a better deal than being the person who just misses out on pension credit due to a tiny additional pension

VeggieSalsa · 12/04/2023 21:03

If you’re not in the UK a lot of the comments above won’t apply. You won’t necessarily get the tax relief and will need to consider the rules where you live.

Original poster
FuckingFinances · 12/04/2023 21:04

Radi06music · 12/04/2023 20:53

Thinking of starting my own thread now! What's normal to pay in?

I'd be interested in knowing this too!

I mean I understand it will be massively varied, but would be interested in seeing the range that falls withing the ballpark of usual.

OP posts:
Original poster
FuckingFinances · 12/04/2023 21:04

Within Hmm

OP posts:
nonevernotever · 12/04/2023 21:09

I would say yes it's worth it. My mum stopped work when I was born didn't work again until I was 13, and even then it was part time (9-1) in a bookshop on a very low wage. She started saving small amounts for her pension at 46 through an ethical savings scheme, kept reinvesting the interest and now at 86 she's got a capital sum of around £120k.

FredaFox · 12/04/2023 21:09

I've only paid into mine since pensions became compulsory and I'm now 48, at first I was paying in way less than you can currently pay in so dont worry that it's too late. Anything you can pay in is worth it to me
I worry about my future as I dont own a home and currently private rent.
Since a couple of promotions I've put every additional penny into my pension so I've never seen the benefit of them as I feel I need to catch up, I subsequently don't go on holiday and rarely buy clothes etc but do have a social life and go out a few times a month for drinks so I'm not completely restricting myself
Anything you can do is better than nothing, none of us know what the future holds but some kind of nest egg is vital

FredaFox · 12/04/2023 21:10

Also saw somebody mention a sipp before, what's that?!

bellac11 · 12/04/2023 21:12

Muchtoomuchtodo · 12/04/2023 20:44

This sounds very stressful. Have you ever had advice from a professional about your pension arrangements?
You may get more specific advice @FuckingFinances if you’re willing to say where you live, how long you’ve lived there and if you’re planning on staying there.
I don’t understand how you’d qualify for a uk state pension if you’ve not contributed.

I thought OP specifically said that she wouldnt qualify for a state pension so I dont understand your last sentence

Dashel · 12/04/2023 21:13

Have you thought about alternative sources of income such as a rental property or passive income of some description that you could build on?

It’s really hard to give proper advice when most people on here only know about living and retirement in the U.K so personally I would see what the pension criteria is where you are living. If you are planning on coming back to the Uk then I would look at paying into missed NI years as soon as I could and starting a SIPP.

Retirement age is still decades away, so lots of time for interest to compound

CherryHouse · 12/04/2023 21:18

You can get one off financial planning advice for a smallish sum. Might be worth doing that!! A pension or IHT review is around £600 as a one off. Hopefully google will mention some of the wealth management firms who offer this.

halfsiesonapotnoodle · 12/04/2023 21:19

nomoredriving · 12/04/2023 18:37

You get tax relief on your contributions

If you're working, your employer will pay in

That's two lots of "free" money

So yes, it's worth it.

But I think you pay the tax when you withdraw it, don't you?

darkmide · 12/04/2023 21:19

Having a chronic illness I totally get the fluctuations in amount you can save. And how hard it can be to cover bills and save in the first place. Some months I’ve saved £25 and some £300. I’ve now got over £100k in pension savings. (Been doing this a long long time). Something is better than nothing!