What can I do about pension?

[0BSESSED]

I’m 49. Worked all my life, part time for fifteen of those years due to kids. I have always worked for non profit organisations so not great money.
I only have £25,000 in my pension pot. I read that you need £250,000 to be comfortable. I don’t need lots of money but am I going to be piss poor?
dh worked for himself and the business failed so he has no pension at all. He’s just inherited £100,000 though. But I think we will pay off mortgage with that.
have I just failed at life??
feel like such an idiot

@MiddleAgedDread - how is your comment helpful?! Remember that auto enrolment didn’t kick in for many people until 2018, and you also don’t have children so that won’t have adversely affected your income or financial priorities.

OP if it helps, I am in a similar position to you, although mortgage free. I work freelance and have done for over a decade, didn’t prioritise pension but intend to going forwards. I suggest you pay off the mortgage, get advice and do the same. I am entitled to the full state pension and also trust that the increase in house value will be helpful when we do eventually sell our property.

Honeslty yes you are going to be piss poor unless you do something drastic.
I wont say how much I have in mine... but i have prioritised it for this reason.

I'd say you need about 1k to live per month
Food and bills is prob 600/700 assuming no mortgage or rent.
Then you need transport and clothes as a minimum so £1k

If you have 25K now by 60 you can expect it to x0.5 so about 37.5k that will last just over 3 years so def not enough.

So I'd be VERY concerned and looking at how to address it now.

How big is your house?

A very good option for income might be lodgers...
A smart thing to do would be to keepcthe lodger income (tax free) into S&S isa leave it to grown and when you draw it down you'll avoid paying income tax as you might with a pension

@SriouslyWhutNowyes I agree to a certain extent however what it spewed out was interesting and made me see that there were factors I needed to consider that I hadn’t thought of. I would never just use the ‘advice’ as gospel. For example many posters are saying just pay the mortgage off however it told me that this may not be the best idea and depends upon the interest rate.

I have to say my experience if using IFAs hasn’t been positive and personally I wouldn’t take this route other than an initial free consultation. Many are very expensive and the OP has limited funds. There is so much info out there that with a bit of research the OP can work this out. Seeing an IFA isn’t a guarantee of good advice or outcome.

it told me that this may not be the best idea and depends upon the interest rate.

That would be because it failed to take into account the tax benefits of being able to divert current mortgage payments into pension contributions.

@quiltofstars I always assumed that basic common sense would tell people they need to start paying into a pension scheme before they're more than half way through their working life! It shouldn't have needed an autoenrolement scheme for folk to have that moment of realisation. It doesn't matter if you have kids or not, it saves you tax and you get a contribution from your employer (even if it's a crap one like ours).

I also wouldn't necessarily pay off the mmortgage s&s isa would be better
20k each this year and in April will take up 80k put the other 20k into pension

@MiddleAgedDread - but it’s not necessarily a lack of ‘basic common sense’! OP has children and works within the third sector, where employer contributions usually amount to a few percent and may have only come into play a couple of years ago. It’s perfectly understandable that the OP would prioritise from her part-time salary paying off her mortgage (unlike you, she has dependents she needs to house), paying bills and feeding her kids before she thinks about topping up pension contributions.

You sound pretty judgmental and patronising for someone with a completely different situation.

I would get a pension advisor to help. There are many options. I am rebuilding my pension with a mortgage after my ex took half in our divorce, legal division of assets that personally I think is morally wrong. Long story! Ultimately it is never too late and investing the mortgage payments sounds ideal as you are already paying them and won't immediately miss the amount!

You should not pay off your mortgage first. You will be using post-tax income, whereas if you contribute to your pension it will be out of pre-tax income and you will benefit from compounded returns which are also free of tax.

The earlier you start your pension the better. For example, if you put £1.20 in your pension you will lose £1 post tax income (if you are a basic rate taxpayer). So, instead of paying £1 off your mortgage (which will save you 5p in interest), you get £1.20 in your pension. And then that £1.20 grows.

Don't worry about whether you or your husband are making the contributions, if you divorce a pension is marital property and will be divided between you.

How is this helpful? Public sector schemes are way more generous and not available to the OP.

OP I would pay in what you can - you still have 20ish years till retirement so plenty of time to build a reasonable pot.

I would consider looking for a public sector job, if you have had that much experience in the 3rd sector, you must have transferable skills.15 years or so in the public sector would increase your pension significantly