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Original poster

DH and I don't have a pension, should we be worried?

61 replies

bouncy · 27/08/2006 17:01

not something that we have thought about until now, we have heard so many bad things about pensions.

We aim to pay off mortage by the time we are 50 (if not before)

Any spare cash we have goes on to paying off larger chunks of the mortgage.

Should we really have a pension or is it best to pay off mortgage and then save big when thats paid off.

OP posts:
jenkel · 27/08/2006 20:23

We dont have a pension and plan to have the mortgage finished by our mid 40,s. We will probably be left some money eventually, but once our mortgage is paid off we are planning to buy another house or a couple of houses to rent out, if not before. We think of that as our pension scheme. We also have 2 endowments which we are still paying into but have switched our mortgage to repayment, so as long as nothing happens to us we have those which we could use as a deposit for rental properties.

The downside of the pension like any insurance is that if you die before you start to take your pension you personally receive nothing. This happened to my dad, he scrimped and saved all his life, paid into a large pension but died when he was 44 and didnt see a penny of his pension.

Ok, my Mum has benefitted but I wish to god he spent some of his money and enjoyed, having a resonable pension done him no good.

Twiglett · 28/08/2006 14:51

I think people who are relying on property to save them for retirement need to consider how many other people of the same generation are relying on property

so say in 20 - 30 years there MAY be a glut of properties suddenly put on the market because all these interest free loans are due up ... are they going to sell quickly and easily then?

I think you need to have a balanced portfolio ... property, stocks, cash ... the only way to play the stock market for me is in Tracker funds .

look at fool.co.uk ..its a worthwhile site

expatinscotland · 28/08/2006 14:54

I don't have a pension or a mortgage.

I can't afford either.

Flossam · 28/08/2006 14:54

DP and I both have job related pensions which we pay into each month - DP's is good (policeman) Mine is ok although the government are gradually making it crap . In the future we will save for retirement, especially as DP is unsure he wants to stay in his job. But right now we can't afford two types of pension.

WideWebWitch · 28/08/2006 14:55

We have no house
no mortgage
no savings
no pension

I am relying on dh's inheritance plus er, not sure what else, maybe dying young to save us from a penurious old age. We're fked basically.

expatinscotland · 28/08/2006 14:56

I don't plan on retiring.

I plan on working till I drop.

expatinscotland · 28/08/2006 15:00

You've got plenty of company, WWW.

AngelaChill · 28/08/2006 15:24

TBH I cannot see how this generation will be able to retire, our parents generation have basically pulled the house ladder up behind them, are milking the pensions and NHS dry and now their children can't afford to have enough children to support the same treatment for us. Not fair.

expatinscotland · 28/08/2006 15:27

Shit happens, Angela.

I have always believed that 'retirement' as we conceive of it is a failed social experiment of the late 20th century.

It just a non sequitur that such a large percentage of the able-bodied population can live for 30+years not working.

AngelaChill · 28/08/2006 15:40

I agree, but it's such a shame because I do believe in retirement people have such a lot they could offer to their communities that working people simply don't have the time for.
My MIL is basically just existing until she dies, such a waste but my FIL is running the round table, a minster and looking after an even older relative.
When will we get the time to do any of that.

jessicaandrebeccasmummy · 28/08/2006 15:51

im with WWW on this one.

YEs i have a nice healthy inheritance due when my aunt and uncle die (have already told me im getting 25% of everything and they are minted) but with my uncle turning 60 this year, and my aunt only being 46 - im a long way off. By the time I get that money - i will no doubt be retiring!

DH will get his army pension - which is crap, but every little helps.

As long as I have enough money to live day to day at the moment, that means more to me than what may happen in 40 years time

Blu · 28/08/2006 16:03

We have no significant pension, either, due to being in high-job-satisfaction-low-earnings work all our lives, and no employers pensions. Honestly, if I could start over, I would begin a small pension as early as possible...litle bits saved early could make a big difference.

Can't rely on inheritance - my parents own a fantastic house BUT have no pension, savings etc, so if either or both have to have care or go into a home, the house will be sucked up in no time! And the ILs have, against all our advice, invested their savings in a property which is due to be under the sea in 50 years due to climate change! No chance of selling our house (mortgage we do have) and moving to their island unless we mutate into mermaids.

Fecklessness is OBVIOUSLY genetic!

hulababy · 28/08/2006 16:05

We can't rely on big inheritences, and both parents are relatively young still anyway. DH has a private pension and has had since starting working in his early 20s. I have a teaching pension. We have our house too - still mortgaged for several years to come. And we have other short, medium and long term investments. DH is really interested in stuff like this and talks with our IFA friends regularly about it.

hulababy · 28/08/2006 16:06

Oh, and because of DH's specialism (he's a private client solicitor) we will have appropriate tax planning systems in place.

AngelaChill · 28/08/2006 16:10

PSML at your in laws Blu, I was pretty pissed of with MIL every time she announces she's off on holiday, again, but I'd be steaming at the underwater house lol

WideWebWitch · 28/08/2006 16:37

lol at steaming re the underwater house.

I'm sort of glad I'm not the only one. Dh's inheritance won't that big (well, we're not sure really, obv we're hoping they'll continue to be as careful with their money as they have been all their lives, shopping in Lidl etc while living in a decent sized prime location house evil) although I have an absolutely poxy amount in an Allied Dunbar thing which some hard salesperson who persuaded me to opt out of SERPS sold me sometime in the 80s. I was missold but tbh only recently remembered about it. I have a work pension too but don't intend staying there much longer so hope the next job has a good scheme and allows AVCs or something. Or I go back to contracting and take no pension but higher earnings. But I am 40 this year so even a 25yr mortgage taken out now will take me to sixtybloodyfive to pay off.

It's all a bit depressing.

expatinscotland · 28/08/2006 16:39

Will have inheritance from my dad, but longevity runs in his family .

WideWebWitch · 28/08/2006 16:43

ha ha, and I won't have any on my side: my dad's already dead, left us 100 quid each (yep, that's TWO Noughts! We were lucky not to inherit debts, frankly!) and I won't inherit from my mother and her h because she has a younger child who will (rightly) take priority. Oh well, like I said, maybe I'll die before retirement and this is all academic?

expatinscotland · 28/08/2006 16:43

I'm deffo going to die before retirement, www, working up till the last minute.

SenoraPostrophe · 28/08/2006 16:48

yeah another reason I have never been that bothered about a pension is because I have no intention of completely giving up working. I'm going to get a nice part time job in a craft shop or something. as well as my nice young man living in the spare room.

Original poster
bouncy · 28/08/2006 17:43

thanks for your replies, both dh and I are mid 30's. We aim to pay the mortgage off and then when its paid off continue to pay that amount into a pension.

We do have an isa thats about £5000 at the moment.

OP posts:
Twiglett · 28/08/2006 17:46

I think that's not the best use of your money tbh

a mortgage is the cheapest kind of loan you'll get .. and yes you'll pay a fortune in interest

but if you put paying off (say 6% mortgage rate) against the returns you can get on the stock market (historically even out at 11% per year ... so a tracker which matches the ftse would be advisable) then add the cumulative earnings then I think you'd probably be in a better financial position

..might be wrong .. I'm just an amateur at this

Twiglett · 28/08/2006 17:48

just found this article .. haven't read it yet .. am making a cup of tea and shall settle down to read when kids in bed

blueshoes · 28/08/2006 22:18

Bouncy, I am no expert myself but I would tend to agree with Twiglett. At your/dh's age, if you start a pension now, however small, you have at least 20, if not 30 years time horizon before you retire. A pension over that time frame (which invests mainly in shares/equities) is relatively risk-free and certainly the upside is there historically. If you wait until you pay off your mortgage in your 50s, that will give you very little time to build up a pension of any value. The headstart of 15 years for a pension makes a world of a difference.

I know pensions, and equities in general, have come under fire as poor investments. But UK/global shares have quietly increased by 60% (? - not sure) in the last 3 years whereas residential property had been largely static over that period. So I do believe in diversification. You already have a lot of exposure in property through your house. Siphoning a little aside every month towards a pension will allow you to build up your exposure to shares slowly, alongside paying off your mortgage.

In fact, the time to buy something is when everyone is dissing it. Which is why I just kept shovelling into my pension for the last few years - which has paid off. Investing in a tracker fund is probably the way I'd go.

If you/dh are taxpayers, particularly high rate ones, then it would be very tax efficient to invest in a pension (because you get tax relief) before investing in an ISA.

Tinker · 29/08/2006 07:53

What are teh risks of these tracker funds please - know I could look it up but... Partner is without a pension and in mid 30s.