To think I am fucked for retirement?

[Realstudd]

despite a decent job and income, I am absolutely rubbish at anything financial. I don’t understand pensions etc.

i became a single parent last year and I have one dc, 9. I am 42. I have 3k in savings but these are used for car stuff or emergencies and never get beyond 3k.

i looked at my pension pot the other day and it says 2,400… I’ve been paying in for over 9 years, 8 percent of my salary. My salary has always been over 35k and for a few years has been over 50. I don’t get how the pot can be so low?

the only positive is I have 140k left on my mortgage which I overpay so could be paid off in 6 years. But what good is that really if I can’t afford the bills! I feel like an idiot for not having planned ahead, I guess I will lose my home and have to go into rented to pay bills when older? What do people do? I go from feeling insanely stressed about it to accepting that that’s just how it is but I can’t picture my future anymore. What do you do in this situation?

It definitely won’t be £2,400 monthly. Pot would need to be nearly £600k for that.

The current projection is based on the contributions you've paid to date, I assume only for a few years. You still have 25 years left to pay in, so your projected pension will increase every year with contributions and growth.

Patronising.

Gains in investments do not compound. That's a fact.

Op get some financial advice about combining the three pensions. Also don't forget you'll also get state pension too.

www.sofi.com/learn/content/can-investors-receive-compounding-returns/

Above is a primer on compounding stock market returns.

I’m confused by the advice to put more in pension and less in overpayments. Crazy interest rates (thanks Liz Truss!) are costing £000s more than people were budgeting for before that massive shit show.
surely getting your mortgage debt down asap is safer?

Who does the payroll at your workplace? Is there no one there or HR who could set your mind at rest. You should be getting a yearly forecast.

If you look over the long range of investment growth, the value of getting money into the market now may outweigh the mortgage interest rate.

That's the sort of thing a professional advisor can evaluate and calculate.

Get a review on your pension- depending on the type you can either move it to a better performing pension or a different fund within the same pension.

My DP paid a load of money into a virgin money pension for years and it was worthless, he finally got it reviewed and moved it to a much better one. I changed the fund my best pension was invested in to a better performing one.

some pension funds take high charges as well which come out of the money you have invested.

https://www.gov.uk/find-pension-contact-details

all you need is the nsame of your previous employer to find your pensions

The tax advantages of pension contributions make paying into a pension rather than overpaying on a mortgage much more financially beneficial at almost any level of interest rates, but depending on what rate someone has on their mortgage, if they fixed 2 years ago, they could have really low interest rates on their mortgage and be better off putting money in a 5% savings account than paying off a mortgage where interest rates are less than 2%, even if they have to pay tax on the interest earned. But paying £800 as a lower rate tax payer or £600 as a higher rate tax payer into a pension is automatically £1k and interest on mortgages is not going to compete with that

You are reading it wrong. The pot is more than £2400. But the returns if will give you per year is £2400. I am in a very similar position to you, and the pension letters are very confusing but essentially it says that the pension pot would buy you a yearly income of £2400. It’s not much for sure but it will continue to grow until you actually retire.

Sorry if someone has said this but your NHS pension is 1/54th of your annual salary you’ve earned each year for life. The money you pay in is largely irrelevant as you’re paying for a membership.

Does this mean that your annual pension is:
Annual salary/54 x number of years worked for NHS?

Sort of. It’s the salary for the year and it then gets updated for inflation.

So if you earn £27k per year, you get a £500 pension for that year (adjusted for inflation) when you retire. All the “years” get added together.

Kind of. It’s 1/54th in each year. if you earned £30000 in 2023 you’d get 1/54th of that (adjustednfor inflation going forwards). If you earned £32000 in 2024 you’d earn 1/54th of that. Add together these amounts since you have worked for the NHS to get your total. You should be able to access your total rewards statement through ESR to get a current estimate.