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?!

I don’t think it’s simple. But it’s not as simple as me only having my pension pot either.

This government service helps to track.down old pensions for free: https://www.findpensioncontacts.service.gov.uk/

see also: https://www.moneyhelper.org.uk/en/pensions-and-retirement/pension-problems/tracing-and-finding-lost-pensions#:~:text=The%20Pension%20Tracing%20Service%20is,online%20directory%20for%20contact%20details.

How many years have you been paying in for?

You’re right, it’s not enough yet, but at £60k you should have plenty of scope to put a lot more in.

Agree with others. 1. Make sure you are contributing via salary sacrifice, if available. 2. Check which fund you are invested in (i.e. some low risk funds will be invested in low risk products with low returns which may not be appropriate at your age). 3. Check the fees! They usually vary by fund. This is a way that pension providers routinely take a large chunk. I would expect your workplace to have secured you a discount on them. 4. Increase your contributions. Ideally done when you first receive a salary increase so you don't notice it, but should be doable on your salary depending on outgoings.

Really? As far as I know you get taxed when you start withdrawing? Also any advantages will be negligible surely with inflation at 10% per annum and pension pot not increasing at all, so basically you are losing money....imagine having a pension pot of say £10k , is not going to be worth much in 10-20 years....

I didn't say I am good at inv sting. I said I am good at saving which is pretty much what they are doing as my pension pot is not increasing, on the contrary , last year it lost £500...so why am I forced to pay into a pension?

I wouldn’t rely on your husband’s pension. You won’t necessarily get half. Sort your own pension out.

I mean you're only paying 8% that's pretty low contribution.
My pension payments are 28%...

I’m not relying it. I have my own pension which I have paid into for 14yrs without a break + a high salary, and having a well-off spouse helps.

I have about 5 grand in mine and I'm 34. I'll work until I drop! It is what it is.

Don't agree. I'm 42 in less than a month, and didn't start saving for a pension until I was 40 1/2. I work for a trade union - not great pay, but great benefits, including pension. After 12 months in the job my defined benefit provision was £1,500 ie at retirement age I'll get £1,500 per year (well a bit extra, bc of inflation etc). If I stayed in the job 10 years, then that would be £15,000 per year (obviously more because my pay will increase, although still will inflation, but you get my general point).
People don't check out pensions much when they look for jobs, but seriously for local councils, civil service, NHS and a lot of the third sector, especially trade unions, there are still good options, including final salary schemes. You are not "pretty buggered", but you should get a job where the pension is the goal, and not the salary (which will be lower).

People slag off pensions, but they have great tax benefits, especially if you are a higher rate tax payer. Nowadays, you don't have to buy an annuity but can do income draw down. So, even a modest amount can make the difference between retiring at 65 or having to wait til 67. Perhaps this is the opportunity for the OP to do some research. And, if you can't put in half your age, don't then put in zero. Even modest contributions can help.

How to check this please? I have 3 aviva pensions.

You've paid in for 14 years and only have a pot of £25k?

I was on a very low salary for the most part of that - lower than national average. It’s only shot up in the last 2-3 years. Plus, as another PP mentioned had happened to her, my pot absolutely tanked in the covid/post covid years. Lost a good 20% and that’s only now slowly recovering.

Look at your statements online- it should show if the indexation has been applied.

Good luck if it hasn't- they are bloody useless. I think there is a flag on my account so when someone sees my name flash up their call centre operatives have a script for the same old flannel, pretend to speak to "someone from billing" go and make a cup of tea and then come back with lies about someone looking into it.

" it's being expedited, someone will call you within 48 hours..." yadayadayada- total bullshit- not once has the situation been dealt with within 10working days and not once has anyone ever called me back following 15 calls during the two years this has been going on.

They took nearly £5k of extra money to cover the shortfall and 18 months later the account is inaccessible and the projection letters they have sent me still don't reflect the indexation. As far as I am concerned they have stolen from me. Even the CEO hasn't expedited anything despite a letter assuring she would.

For those of you considering any dealings with Aviva - don't- they are a bunch of clowns.

You need to pay in far more, about 15%, more if your scheme permits it and you can afford it.

I'm 38. My pension value is 0

So no

Can you make a bit more your invest ? I once read a comment saying you should put %50 of your age (tho it wasn’t like that but that’s what stuck in my mind :)). I’m 38 and I’m close to that 50%. 10% myself and 7% the company. I earn a bit more than you tho not by much and I think I’m paying £700 only myself. Which at the end of the year it’s around £12k(and as someone has said I do it by tax relief so it helps a bit more as well)

any chance you can increase your % a bit higher ?

Ah ok the bit about the high salary confused me

Yes, I’m hoping to grow it much more now because of the jump! You know, if world war and global pandemics can hold off 🙄

Up your pension salary sacrifice to get your taxable pay under 50k and then claim child benefit!

Saying this reminded me have you done self assessment? It’s compulsory for those earning over 50k if they receive child benefit

For the people commenting that they'll only receive £20k p/a if they were to purchase an annuity with their fund, I think this is pretty decent is it not?! I mean, assuming you don't have a mortgage to pay come retirement, that seems plenty...? Am I missing something here?

@Moreorlessmentallystable

Two points:

1. yes, you are correct, you will pay tax when you draw your pension. However, the tax relief on the way in will have had the benefit of compounding. Therefore the tax on the way out will have less of an effect due to the compounding effect.

Also, with things such as flexiaccess drawdown, you can manage how much you take to do it in a tax advantaged manner.

Also, the funds within the wrapper grow free of capital gains tax.

Finally, they do not form part of your estate and therefore are free from inheritance tax .

2. you say you are good at saving, not investing. Well yes, this is why I said you can invest in money market funds if this is your preference.

Over the long term equity markets have significantly outperformed cash. But nobody is forcing you to invest. You can save into cash funds if you'd rather.

However, the tax efficiency of pensions isn't really a matter of opinion. It's a fact. And the tax benefits are so good that subsequent governments may change the rules on this. So it really makes sense to use them while you can.