Pension worry…help

[Pensionworry1]

NC’d for this…basically I was a sahm and had a late career change 5 years ago. I’m 40…My current pension is at 33k…projected at 240k. I’m aware this is not enough
now I do have a separate extremely small pension elsewhere and by that I mean about 1.5k per year once retired.

it’s also worth noting that I’m still at the lower end of my career ladder right now and have no intention on stopping here. My wage increases about 4.5%annually, my company pays 10% and I pay 5% (I can’t pay any more than this as I have a mortgage etc) I usually pay some of my bonus into my pension so I might put it all in going forward (usually about 8%)…is there anything else I can do? I suppose that’s it really isn’t it? Should I be worried? I feel like I should be 😩

It’s very simple the more and the earlier you put money in the better.
remember you get tax relief on the money going in and the bigger the pot you build the more you can take as your 25% tax free.

I agree that state pension may disappear or become harder to get. I think it may be a self fulfilling prophecy of sorts, once people start worrying about pensions at a younger age and so they save more for it, believing they might not get state pension, the government will be able to withdraw support slowly.
I am a bit older than OP, plan on retiring early, and using up my private pension by my mid seventies, supplemented by state pension, I will be ok then on state pension and small savings.
State pension will have to exist in some form for those with no or small pensions.

It isn’t a huge amount but it’s probably more than most. Things I’ve been doing to increase the pot - 100% bonus goes into the pot, every pay rise gets get put into the pot, so essentially increase your pension contribution to offset any pay rise. Your employer contribution is brilliant ! I think mine puts in 4% which is dire. If you’re ambitious then push to move up to the next level and get that next pay rise.

I'm sorry op, I got stuck at
My wage increases about 4.5%annually, my company pays 10%

Please tell me where I can find a job that pays an annual 4.5% increase AND 10% pension contribution? Public sector I suppose.

Anyway, sour grapes aside 😃, my first bit of advice is to hang on to that job (even if the headline salary is perhaps a bit lower).
Secondly, yes you're doing all the right things, putting in 5% every month and additional payments when you have spare cash.

As others have pointed out, money put into pension is out of your reach, so you should have a savings cushion separately. Don't get hung up on ISAs - as a basic rate taxpayer you can have £1000 interest before you pay tax on it so just go for the highest interest rate.

i would recommend reading or listening to the Meaningful Money retirement guide and also the related podcasts and YouTube videos. Very good and will bring you up to speed quickly. Don’t panic and just keep saving what you can afford to into a pension primarily and also stocks and shares ISAs is also very useful. Good luck. 👍

Thank you everyone for your advice and help. I was out sick today but will be in tomorrow and will try to look up the types of investments they use etc. @MrsJeanLuc oh I know! I’m very lucky, they are a great company. Not public though, it’s a private global company.

I didn't comment, OP, because I don't have any knowledge worthwhile to contribute.
My own pension is DB (Defined Benefit), I worked in the public sector, seen often as the gold plated pension as its related to your earnings. (which were well low till my last few years.) But it produced a reasonable pension.
The sort of pension you have is DC (Defined Contribution) where you build up a capital sum that funds your eventual pension. I really don't know the ins and outs of this type, but you are absolutely fine asking the question of those who might know.

Try pension tracing service plus next year I think they are launching a new dashboard that will help trace old / lost pensions.

What do you think that will be worth when retirement is 67 - 70years?

Sorry I have not read all the responses so may be repeating. I would really reccommend rebel finance school on you tube. Its a free course of 10 2ish hr videos starting with budgeting, net worth calculations, thinking about money, compunding and debt and then talking about the money. The second half is all about investing. ISAs v pensions, how to choose a platform and a fund, retirement forecasting. Its very very good. They aren't selling anything. Its run by a couple who retired around 40 (!!!!) And running this course for free is what they now do with their time.
The 2025 course finished a couple of months ago so very current.

Firstly, go to GOV.UK and find out what State Pension you are entitled to and how many years are missing to make up the shortfall. You need to maximise the State Pension as much as you can as it is the best bang for your buck.

Secondly, ask your employer to make pension contributions directly into a plan on your behalf - this will save them tax and NI, and many employers will pay that saving into your pension plan too - it's called salary sacrifice. Also look into auto enrolment as all employers must make this available.

Thirdly, or maybe even firstly, talk to an IFA. Many will give you a free initial chat and then you can decide whether to engage them fully. They will help you decide on what level of risk to take with your investment but you can afford to be bolder than you might suspect because time is your friend, and over time the higher the risk the greater your reward.

You cannot over fund your retirement pot - you will hopefully spend a long time in retirement and your future you will thank your today you if you manage to squirrel away 10-20% of your income away. Remember that for every £80 you invest HMRC will immediately top this up to £100, giving you a 25% boost before the anticipated investment return gets to work.

Hope this helps.

I suspect state pension age will be increased in the very near future. The model isn't currently sustainable.

Speak to a financial advisor (like me!).
A good advisor will help you form an achievable plan, which in itself will bring peace of mind. Find someone you like and trust; the cost should be outweighed, many times over, by your long term emotional and financial gain.

Not read the full thread, just your posts.

1. You have a DC pension, look at what it is invested in. Do not go with default fund. At your age 100% equities (global).
2. When you go over 40% tax ensure you keep under it by pension contributions (you have to HMRC self assessment for extra tax benefits/payback).

You are young enough to be all good in retirement.

Old tip, 4.5% pay rise, up your % pension contribution by at least the difference of this and inflation.

I’ve got a pension pot with around 5k in it, I’m due to retire soon!
Back in my younger days there wasn’t no such thing as paying for a pension, I didn’t work from 1989 until 2009, from when my eldest was born until my youngest was in secondary education!

sorry I’ve not read all the comments so this may have been mentioned already. I highly recommend completing Rebel Finance School’s free online course on YouTube, it’s really empowering. It’s run by a couple who have been awarded MBE’s for services to financial education. They are not selling anything and it’s very accessible learning. The 2025 course has finished but is available on YouTube for the rest of the year so you can watch at your own pace. It covers all aspects of finances including pensions and investing, and planning for retirement. There is also a supportive Facebook group. The course has enabled me to stop paying high fees to a financial adviser.

I haven't read all the posts, but I recently increased my monthly pension contribution by 2.5%, it meant I got paid just £72 less this month. Salary sacrifice makes a big difference, and if you increase your contribution by just 1% you may barely notice. I am a bit older than you, and have a bit more in my pension pot, but it's less than it would be as a result of being a stay at home parent. I share your concerns.

This! Becoming more involved in what my pension was invested in (and admittedly taking more risk) massively changed the growth rate on mine.

This dropped into my podcast feed this morning and might be of interest.

https://podcasts.apple.com/gb/podcast/the-pension-confident-podcast/id1595160878?i=1000733536944