This is a terrible pension position isn’t it?!

[haengry]

I’m 38. I just got a letter from my private pension with the annual update and it says my pension value is currently 28k. For context I have been paying in since I was 25 and my employer makes a contribution too. We each pay it 4% a year so 8% in total. My starting salary was 30k and I’ve been on 60k the last two years and then in the fifties a few years prior to that. Surely it should be more? Does that literally mean I have 28k to my name if I was to retire tomorrow?!

Is that the max contribution your employer will let you make?

8% a year isn’t a lot… that means to start with you were putting around £2.5k in it per year, and now you’re putting around £5k in. It should be more than £28k though! What kind of pension is it?

How has it been performing? Mine tanked during the pandemic and I lost a huge amount. Maybe yours is invested in things that have done badly. There were years when I ended up with less money than I started with despite paying in every month. Check how much you're paying in fees too.

Yes that is poor. Assuming no growth or loss at all, a 30k salary alone over 13y should have a £31,200 pot. So you should have much more than that unless it all went into high risk investments that have lost money. Is there a pension advisor in your company or scheme you can talk to?

That is low. Who is the provider?

What has the return on investment been?
Have a look at what your pot is invested in. Did the funds perform badly overall compared to a tracker (in which case you might want to consider switching)?
Are you in a very secure but low return bond (in which case you may want to switch to something higher risk, you are still young enough for that)?
ate you in funds that are expensive (management fees)?
is your portfolio sufficiently diversified ?
But yes, after 13 years I would expect a lot more in your pot.
take action now so you don’t lose more years to underperforming or expensive pension investments

It sounds very low. Have you checked the contributions and investment performance? Have you gained more than you contributed over the last few years?

For comparison a 60 year old retiring today with a £500,000 pension pot could get a guaranteed income , index linked, of around £20,000 per year (although that may not be the best way to draw down the pension)

It sounds on the low side although there was a year or two when pensions were hit hard and we all lost money. Mine is starting to recover now though. Ultimately you are not paying anywhere near enough in. If you’re on 60k you’ll benefit from higher rate tax relief which will help. I’d also look around at different providers. Does your employer match your pension contribution?

Who is the provider? Taken over by Aviva in 2009/10?

If so check the indexation has been applied- mine wasn't ( absolutely their fault which they admitted) and 15 calls, endless letters and emails over nearly 2 years and despite having paid the extra to bring it up to date it's still not sorted. They are laughably, blindingly incompetent and I wouldn't recommend touching them with a 10 foot barge pole.

Aviva.

I don’t know if I had another one previously, I recollect that I did have one, Scottish widows maybe. Could that be a separate one?

I can’t understand how it’s so low after nearly 16 years.

I'll make you feel better... i only have £2k in my old one that i had wirh work. I never paid into any when I was working during my 20s or 30s (the company was very small so didn't offer pension schemes).

I've not been working since I had my 2 DC from 2017, and before that i worked for 13 years in publishing before i had a head injury and post concussion syndrome 9 years ago.

My DH has several good pension pots which he has paid into since his early 20s. He's now 53, I'm 42.

So I am pretty buggered really, unless I get a big inheritance or win the lottery.

There are always plenty of people worse off than you, OP. You might not think your pension is much, but it's £35k more than mine. ✨️

@KnottyKnitting embarassingy I don’t understand any of your message, I don’t know where to begin with it or what any of it means!

*25k

Is that the total amount invested or the pension they expect you to receive at retirement?

Contact Scottish Widows- you probably have a pot of money sat in there too. My workplace pension is split between providers from different jobs and I'm planning on moving them into the same one.

It says fund value

Unfortunately that's not going to give you a good return. I'm having to retire early at 60 for various reasons and my £290k pot will give me an annuity of around £17,400 per year. I don't get to claim the state pension for another 7 years.

So if you have been paying in since age 25 but remember a previous pension provider how long have you been paying into this Aviva pension? It sounds like it's not 13 years? You need to track down the previous provider and see what they are holding for you, then maybe combine both into one pot if it makes financial sense. Also I am guessing you are not actively managing this pension (presumably you have no recollection of choosing a risk profile for your investing?) so it may be that you have chosen a very conservative investment strategy or it may default to that. Also as others have mentioned some pension funds have performed very badly and particularly recently have lost money. You really need to have a chat with an IFA to decide the best way forwards.

KnottyKnitting sounds like she had an issue with a different type of pension (where you get promised an income each year when you retire). It sounds like your pension is the one now more common outside of the public sector , where you basically have a pot of money saved up to use at retirement.

I would contact the pension provider (aviva) as a first step and ask how long contributions have been paid into your current pension plan, and what it is invested in. Then you can look into if you have another one somewhere else. They should have some basic guides to pensions that would be a good place to start learning a bit more about saving for retirement.

The stock market has been rubbish for a while.

It tanked during the pandemic, recovered, then dropped again due to the energy crisis and all sorts. It has picked up somewhat though.

And this is the danger with investments, they go up, they go down and you could lose the lot (speaking generally here, your pension contribitions could be protected maybe?). But, over the course of years it's usually advantageous to have investments.

Hang on in there.

Can you start a self-invested personal pension? Can you increase your percentage of your occupational pension? Contact Pensionwise or one of the other organisations for advice. You've got at least 30 years ahead of you to boost it. And make sure you're inline for the max state pension, too. It's not a lot but it's worth having.

Have you considered doing salary sacrifice for your pension contributions? It can really increase the amount you can put in each year at barely any extra cost to you.

I've got less than this and I'm 53. Nightmare.

@haengry - find out which of Martin Lewis's ITV shows are about pensions and watch those on catch up. There's always a lot of info in them. He did an excellent one that was 1.5hr long as there was so much to cover.

I think you need to be a bit more proactive with this.

Good luck.

My pension pot took some big hits in the past 6 years, i.e. wiping out the growth it had made over several years - twice. I could have cried (I may have) because my pension fund is not healthy anyway. The forecast for when I hit 67 (so including my government pension) is abut £18k per year. I'm in my 50s.