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?

If you're 42 and the remaining £140K on your mortgage will be paid off in 6 years; then by 48 you'll have a massive amount of money freed up each month to save and invest, and still another 20 years of work in which to prepare for retirement. That seems an enviable financial position to me.

You're only 42 you have heaps of time to improve things.

Have you considered working in the public sector for a period? It's worth investigating, you could really bump up your pension (it's particularly impactful towards the end of your career).

Do you work in the public sector or the private sector?

That's usually the first clue on defined benefit (where your employer takes the risk of the pot size and guarantees how much you get on retirement) and defined contribution (where you and your employer contribute an agreed amount each and your pot is then invested, so you take the risk on how much it grows).

There is a really good personal finance course on this with Rebel Finance School. At 42 you have time but you are better off investing than overpaying your mortgage.

I don't believe this is correct. It depends upon when you become eligible for the state pension, not when you started to pay into it.

Don't feel stressed, I have £0.00 in my pension pot at 44 and not at all worried!

Don’t take financial advice from random people on the internet - ask locally for recommendations for a financial adviser and get proper advice. There are reasons why financial advisers are regulated…

Im same age as you & in a similar financial place when it comes to pensions.
I got a pay rise & upped my pension payments to try & improve my hopes of not being broke when I retire. Unfortunately my bastard of an employer keeps deducting my pension money but it doesn't make it to nest. So check your pension company have all the payments you have made.
I'm currently trying to claim it all back with help from the pension ombudsman but there's some loophole in the law that lets employers get away with this & I could loose the money that was deducted but never paid after 12 months.
I'm also looking for a nice new employer that doesn't steal their staffs wages

Could you have another pot from a previous job?

Are you sure it isn't £24,000? At 8% you will have been putting in aound 2,500 to 2,800 year which would be around the 24,000 mark.

You would need to put a lot more than that to end up with a monthly pension of 2,400 so I don't think it is showing you your pension payments.

You would also get state pension though.

No, you are incorrect. The 35 years only applies to anyone that started paying NI after 2016 which is when the New State Pension replaced the more complicated Old state pension system. Anyone paying in before the 2016 date will have had there entitlement calculated at that point and that calculation determines how many years tbey need to pay in.
Anyone that started to pay NI after this date will have a blanket 35 years needed.
There is plenty of information regarding this online.

An NHS pension is so far beyond what 99.9% of private sector pensions offer, it's irrelevant.

A private pension can just as easily reduce by 500/yr as rise by that amount, regardless of the contributions made.

Sadly many people don't realise just how incredibly valuable (and expensive to the country) public sector pensions are.

Hi OP. Podcasts are good places to start. Women & Money Cafe. Claer Barret Money Clinic. Making Money podcast, especially an episode from around July 2023 with Lisa Conway Hughes on sorting out your pension and retiring well.

Some steps they all recommend:

• your workplace pension is free of tax going in - your contributions get taken from your gross salary before tax is charged, so they're an effective tax break. So maximise this. If your employer will match your contributions, take advantage of this if you can afford to pay in more.
• Get your pensions in one place.
• If you have your rainy day/emergency fund together, and you haven't any expensive debts, you should start investing. You can put a small amount of money each month into a stocks and shares ISA - use a tracker fund, like Vanguard, or Wealthify, where the fees are very low and you aren't paying a fund manager to try and outwit the global financial markets. Vanguard do target date funds - say you want to retire in 2045, you can put your money into that fund, and they will automatically shift the ratio of holdings from higher risk equities into lower risk bonds as the fund maturity date approaches. This sounds like gobbledegook right now, but it gets clearer, honestly! All the growth in ISAs is tax free, so you won't pay any tax on income you eventually take from the ISA funds.
• Don't forget your state pension - a full 35 years contributions generates an assured income, currently, of over £200 per week, and this is still under the triple lock, so inflation-proofed. You can check your national insurance record online (HMRC - get yourself an account via Gov.uk) and pay voluntary contributions to catch up on part or unpaid years (up to a point).

Rebel Finance School do good YouTube content, if you like info that way. Ramit Sethi's book I Will Teach You to Be Rich sounds like a GRQ scheme, but isn't, it's just lots of sensible advice, and you can get it from the library.

Take it bit by bit, and follow the steps they set out. You don't mention any debts, you have an emergency fund for disasters, you are close to paying off your mortgage and you have a good job with a pension which you can build upon. You are in a better place than you know! it's a good point to get more in control and start thinking about what you want from your retirement, and how to get that.

How long have you been at the most recent employer? would that explain the £2400 plan value - if not as other PP state it could be the overall annual amount.

If you have paid into a pension over the last 8 years and worked at 3 places they could all have 3 separate providers and will set them all up individually. for example, 1 is Aviva, 1 is Peoples Pension, 1 is St James

You can find these out through you old employer records and if you wanted to you can put them all together so you have it all in one place.

Also I know others have mentioned it but its not going to just be £200 p/m when you retire - you are continuing to work and pay in, you will also get (in todays money) £800 p/m from the government. If you added up your bills and removed the mortgage what do your bills come to? this is the amount you are aiming for as a minimum to live off. once you have sourced your other pensions and can work out what you have now, what you are paying in you might be more comfortable. If not, once your mortgage is done you can up the savings.

Well I'm going to have to sack my pension adviser and the gov.uk website then!

The information is freely available. https://www.nidirect.gov.uk/articles/understanding-and-qualifying-new-state-pension

https://www.gov.uk/new-state-pension/what-youll-get

Don’t panic OP.

You could try contacting your previous employers for details of the pension schemes you were in.

It is worth speaking to a pensions advisor about any options you may have for combining any pensions you have accrued in to a new pot that you can now try and maximise.

Hopefully you will also have a state pension and if you manage to pay your mortgage off that will put you in a good position to downsize and hopefully invest some equity for your future.

Not all defined benefit pensions are final salary. The majority are career average now.

I am with you pensions are rubbish we will never see the same levels they use to be. Mines predicted to be around 10-12k a year if I retire mid 60s even lower if I go earlier.

I imagine the 2.4K is a year amount with your current pot, do they provide a predicted amount?

It winds me up no end my parents have no idea how good they have it.

That doesn't say what you said... it refers to contracting out

Hence me saying that OP likely still increases her annuity pot by £500 a year, given that I pay nearly 10% into my own pension and my total contributions are in the range of £4800 before my employer tops it up. So not at all irrelevant.
Not sure whom your last sentence was about. I very much value my pension. I am also that very same public who finances it since I also pay taxes. Expensive, sure. But it would cost you more if you had to access my services via a private provider. In fact, my employer contributes an equivalent of £3 an hour towards my pension which brings my total hourly rate to £26,52. An equivalent private appointment would cost the public anywhere between £90 and £350. So I am happy to finance my own pension if you are happy for the NHS to be fully privatised. Sounds like we are both going to be better off financially if this is the case.

Regarding your old age and living arrangements - given that you'll have paid off your mortgage by the time you retire, and your son will hopefully be living independently, most people sell the family home, downsize, and live on the extra cash (as well as their private and state pensions). There's no need for you to rent.

And when I plug my NI number into the gov.uk site to give my pension forecast, it says that I'm already entitled to £221.20 per week, even though I started contributing in the 1980s

This. Get proper real life, qualified, information and advice.