To think we are heading into a pensions disaster

[She11y]

I asked ChatGPT what the median pension savings were for someone in their mid 40s and I got the below reply:

Ages 35 to 44: The median pension pot is approximately £30,600.
• Ages 45 to 54: The median pension pot increases to about £81,200.

This website has a similarly sobering statistic - average pension pot for 50-59 is £96k.

https://www.nutsaboutmoney.com/pensions/average-pension-pot-uk

These are averages and the number will be brought down by some people who have zero pension savings but it's still a very low amount.

How are people going to survive retirement. There aren't many jobs for people the wrong side of 50z

This is a myth. What Gov employees? I'm a Gov employee and won't be getting a great pension.

Struggle to make 6-15k a year? 6k works out at £500 a month, so about 12 hours work a week. That should be easily manageable on top of university.

Can I ask while lots of PP are saying there wont be a state pension in the future? Was about to go back and full my NICS gaps but maybe that’s a waste of valuable £thousands?

@AnotherNaCha we can split a coffee together once a year 🤣

@Anonym00se has your DS started building an alternative fund for when they inevitably up the age at which the pension he’s paying into is available/cap how much he can pay in? I’m now splitting my savings into 1/3 pension and 2/3 elsewhere in the event the private pension age is further upped. I’m not expecting to get a state pension at all.

Mate of mine just asked chatGPT how much she needed in a pension pot to get £36000pa pension. It was £405000 for retiring at 67…

<gulps>

I live frugally but since having dc i haven’t earned enough to pay into a pension. Yes, I’m screwed! OH is not better off. We’re looking for work that we can do into our old age, and trying to make that switch now. If by some miracle we start earning enough, we’ll save- but i can’t imagine having a ‘proper’ retirement like the baby boomer generation. It’ll be more like the generations above theirs, back to poor old pensioners! And I don’t think we are alone. I know a lot of people in similar situations.

I get so depressed thinking about mine, I pay in £500 per month but it won't get me what I'd like and with 3 teens off to Uni in the next few years I can't see me being able to up it much any time soon.

I don't think we are heading into a pensions disaster, I know we are. This is not news. It's been rumbling on for 20 years or more. All the alarm bells have been ringing. Why do you think so many people and have diversified into Buy To Let property in their old age?

The problem with this is affordability. I’ve always put in as much as I can afford, but when you’re saving for a deposit etc knowing the impact of compounding doesn’t help the decision making.

I was making £300 p/m contribution in my early 30s, now in my mid 30s and making £1,500 a month contributions to catch up - but my saving needs outside of my pension are much less, and I am still benefiting from compounding by having a bigger deposit and lower mortgage so less interest compounding on the debt I owe!

Some courses are 4-5 hours a day, I studied a scientific degree (sorry keeping it vague!) and was in uni 8.30-5.30 5 days a week for most of the year and at some points even longer. We were expected to do an equal amount of hours of work outside of uni as well. Not saying you can't work in the holidays etc but working part time isn't always possible.

Contribution rates are tiny for public sector pensions considering the benefits. The employer contribution is equivalent to at least 25% to 30% of salary. You would never get that in the private sector

That’s quite unusual, was it medicine or something with work placements?

I think I'm fucked pension wise.

I got a work pension aged 30ish but didn't realise the rates on it were absolutely shit (I assume risk averse) so it's hardly accrued any interest and is worth pennies now. I'm currently on the govt scheme Nest pension which is equally rubbish. My whole pot is about 40k and I'm 45. I know I need to fix it but I have absolutely no idea where to start. Until about 5 years ago I was either working part time, on mat leave or saving to buy a house so wasn't really able to put much in but I'm so annoyed what I have put in has not worked hard for me.

Finances have never been my strong point, I thought if I kept out of debt and kept my spending down I'd be ok but totally missed the memo on the importance of clever investments. I've saved some money but it's only getting 5% interest.

Does anyone have any good resources for clueless people like me on where to start? Do I just need to pay a financial advisor? How do I avoid getting ripped off or losing money?

@AnotherNaCha please don’t take advice from people on the internet - if you can afford it, getting independent financial advice is good. Or the Money and Pensions Advice Service and Money Saving Expert have helplines and lots of info online.

Buying back NICS years is worth it if you’ve got a shortfall you can’t make up by continuing to work. Not necessarily worth it if you’re going to be working for another 20 years etc.

State pension cannot be abolished - that’s nonsense. People would starve. What might happen in future is ending the triple lock and raising the state pension age to 73 etc. Maybe means testing state pension for the very richest. But abolishing it would lead to outcry and widespread destitution- please don’t panic.

Well you sound like a ray of sunshine- about as much empathy as a rock!

Courses vary so much in difficulty and expectations!

A very large mortgage can be a shrewd decision if properly thought out.

Couple A doesn’t take a large mortgage, buys a house worth £300k. House prices increase 20% over 30 years so they have a house worth £360k.

Couple B stretch, buy a house worth £700k. After 30 years it’s worth £840k.

so compared to couple B they have a nicer house and and the option to downsize.

Obviously it’s important to not stretch to the detriment of pensions, but large long term mortgage isn’t necessarily a bad thing.

Yes :-) But I also did a masters in a different scientific discipline and was in similar hours, though some of that was self directed study type time.

I did a biochemistry degree years ago. We had lectures all morning and were in the lab all afternoon. I didn't know anyone who worked during term time.

If you start paying in at a young age then it isn't too difficult to reach a decent sum due to compounding but it's hard to imagine you'll ever be a pensioner when you're in your early 20s.

Delayed gratification isn't a skill that many find easy. I know someone who has opted out of her NHS pension because she is concerned that she may die young and would rather spend it now on holidays. She has no health issues or family history of early death.

I have £23,000 private pension! . Mid-50’s moved around with jobs etc regretting it now - I won’t be inheriting anything so will work until I drop!

care to expand on this? My NHS pension is linked to state pension age which as we know is increasing all the time. I pay quite a whack in contributions but actual pension when I finally retire is not actually going to be that great.
its not quite the gold plated pension you think it is.

It’s not a myth. Public sector workers invariably have access to generous defined benefit pensions. You might not think that they are generous but they are incredibly costly.

I feel so angry watching my parents/in-laws in their late 70s not being able to spend their pension as they get so much (normal jobs). They just don't know they were born.

Well not never. I’m private sector and have a non contributory final salary pension.