How much in your pension?

[Petpank]

I'm a SAHM & DHs pension is doing pretty nicely... just logged on to my account online for the first time however - and had a wake up call...There's £26k. Suddenly that doesn't sound very much. Not going to last me very long.

House will be paid off in a few years - but we have live...

Is it just me? Feel like a bit of a fool for not addressing it much sooner.

Currently trying to see if I can afford financial advice, actually (yes, I know I probably can't afford not to, but you know what I mean).

Mostly, though, I need to stop pissing about on Mumsnet and earn more. Oops. Bugger off, you lot, and stop distracting me

28 years is definitely enough time for a stocks and shares isa - you don't get interest, but hopefully growth.

Unfortunately the stock market is at record levels so it is tricky for this years deadline.

BTW if you have £2880 to make into £3600 for a pension, you need to shift if you want to do it this tax year.

My last pension forecast was for £654 a year. I've been a SAHM mum for the last eight years so made no contributions.

why won't here be an annuity market in the future, please?

Annuities aren't always the best solution but until recently they were the only option. The market for them was sustained solely because so many people didn't have a real choice. Now that the rules are changed the market for annuities will change but I don't think they'll die altogether.

However lots of people aren't bothering with them. A quick Google just now suggested a £200,000 pension pot would buy an annuity of £12,000 per year.

If when you get to retirement you don't think you are likely to live more than about 10 years more, you could instead choose to take £20,000 per year from the fund until it is all spent. Obviously then you have nothing to live on so if you are unfortunately still healthy and not dead you have a problem. In which case if you have a home with the mortgage fully paid off you can trade that in for further income, meaning you have no estate to leave which is better than destitution.

It's those "last years" that are a problem...basically pension planning would be so much easier if we all knew when we are going to die

There's still a significant role to be played in deferred / late start annuities IMHO, e.g. where you plan your retirement spending for your more active years, say until 80, but have pre-paid an annuity to kick in at age 80 to serve as a safety net for care provision indefinitely (i.e. until you die).

I read a thing recently in the Times money section that a good aim is to be saving half your age as a percentage of your salary. I am getting closer to the 20% I should be on, but once I get to the half age thing, it won't increase much each year (so goes from 20% to 20.5 to 21).

I guess if you are a non-worker then you are used to surviving on one salary and 'should' be able to survive on your partner's pension.

I'm putting a little over 15% of my income into a pension (5% goes towards a defined benefit scheme, the remaining 10% goes into a defined contribution scheme), and a further 5% into a S&S ISA. Maybe I need to review this.

I've also started pensions for both of my DC. Hopefully they will be in a better position than me when they're my age.

28 years is most definitely enough time to pay into a S&S ISA, just make sure you drip feed the money in monthly, so that you smooth out the peaks and troughs of the stock market.

If you pay it all as a lump sum, and the market/funds are at their peak, the money invested will fall (we got burnt with this in early days).

However by drip feeding, some of the units will be bought at a high rate, some at a low rate, and over time they should equal out, and grow.

Have a look a Hargreaves Lansdown, a stockbroker with a good website. You can select an array of different funds, with a minimum monthly payment of £50. You can also see the value of your funds immediately via your online account.

My DH has paid £300 to £700 per month for 30 years since he was 19.
He retires in a few months and will get a £225K lump sum and £1900 per month for life.
Our friends do make comments sometimes about him being able to retire but they forget the large % of his wages that he has paid for many years.

I'm pretty much a SAHM too and I have zero pension.

DH has been self employed for decades and aims to hit £1m by the time he retires. We also have funds in property.

He keeps telling me not to worry but it makes me very nervous that I have nothing of my own. Of course I'm entitled to half and when the inevitable happens - he's likely to go before I do - I should be perfectly fine.

It still doesn't sit right with me. I'm planning on getting a proper pension and ISA sorted just as soon as I'm earning again. The 'save half your age as a percentage' plan seems very prudent.

We've got pensions and want to retire early at 55. We have several other investments (rental income mainly) as my pension will only be a few £k pa. DH's is much more and will cover basic living costs plus a bit extra.
Plan now is:
Overpay the mortgage.
Add to cash savings.
Start buying some AVC's.
Eventually downsize not just for financial reasons, for more manageable size house.

Don't forget that when you turn 50 you are entitled to a free Pension Review. Has anyone done one? Was it any good?
I'm thinking of doing it if only because it will force me to sort out all my various pension pots and bits and pieces and work out how poor I'll be!

I have zero pension. I am 36 and stopped working when I had my disabled ds 5 years ago. I am relying on the idea that I will be able to downsize my then mortgage free home and use the equity from that to live on. Hmmm. Who knows, it's all a gamble but i currently have no money whatsoever to save for anything, yet alone save for a pension.

Jng1 - who does the pensions review? I could do with that!

I have 120k in two pots + the ridiculous amount my current employer contributes which is the bare minimum. ( Plus probably something in France where i worked for a couple of years, this is on my eternal to do list to check out).

One of my mistakes was to not check where the money was invested as i was too busy working and having children. In June i switched my contributions from a very basic money market fund to more high risk global equity funds. The increase has been 10 k+ in growth alone ( not including contribution). I'm happy to take that risk as i cant touch this money for at least 17 years anyway ( I'm 39).

Also, i contribute 400£ out of my post taxed earning, which means that i get another 100, so 500 total invested.

Please do check where your pension is invested, and consider whether you can be comfortable with more high risk options considering you cant touch it until you're 57.

See www.pensionwise.gov.uk for details of the Pension Review service for over 50s.
Book Appointment

It's a government-backed service, so no hard sell or any particular option. As I say, I haven't done it yet, but it would at least get your mind focussed on pensions!

Sometimes I worry about pensions. You put in: someone invests your money in some shit fund that means it's worthless.....
and in 25 years time the government will ..... do something awful that will mean all our pensions are practically worthless.....
sometimes I think I should have just shoved a fiver in a suitcase under my bed every week for the last 20 years.

I know what you mean!
That's why I moved all mine to a SIPP a few years ago. At least I can now choose the shit funds, make sure they are cheap and move the money if it isn't doing much.
There are some good suggestions here monevator.com/passive-investing-is-winning-despite-the-fog-of-war/ about passive investing in trackers for a low cost option.
And lifestyle pension funds like Vanguard Target Retirement funds are good for a 'put it in and leave it' strategy.

Agree with Jng!

I am starting to wonder if it's better to pay into s&s lSA than pension...

But you pay tax on the income in retirement (except for the 25% lump sum).

At the individuals highest marginal rate. The OP would still have her personal allowance.

I am starting to wonder if it's better to pay into s&s lSA than pension...

Why?! with the pensions freedom and choice legislation, seriously, why?!

And lifestyle pension funds like Vanguard Target Retirement funds are good for a 'put it in and leave it' strategy.

Investors should be cautious of any lifestyling strategy strategy. Lifestyling was designed for the annuity market, not the drawdown market.

When you die, what happens to the money in your pension scheme? I imagine it dies with you - the pension provider keeps it. If married, does it automatically go to your widow and then dies when they do?

With a S&SISA it is part of your estate, so transfers to next of kin. With a wil in place, you decide where it goes. Is that right?

Equitable Life - what went wrong there? Could it happen again?

No investment is without risk - what are the risks with pensions?

When you die, what happens to the money in your pension scheme? I imagine it dies with you - the pension provider keeps it. If married, does it automatically go to your widow and then dies when they do?

If the money is still in the pension and not an annuity then it is paid out at its current market value. Its outside of your estate for IHT purposes. You nominate a beneficiary, however, the trustees can overrule your beneficiary if it isn't appropriate.

With a S&SISA it is part of your estate, so transfers to next of kin. With a wil in place, you decide where it goes. Is that right? It doesn't necessarily go to your next of kin, if you die intestate different rules apply.

No investment is without risk - what are the risks with pensions? The investment risk would be largely the same as a stocks and shares ISA. There is obviously regulatory risk that the benefit of pensions today may not be the benefits of pensions tomorrow. But also, the drawbacks of pensions today may not be the drawbacks tomorrow. For example, I have met a lot of people who wouldn't invest in pensions because of the limitations on withdrawals at retirement. Pensions freedom and choice removed a lot of those limitations, however, the individuals I spoke to can't get their lost allowances back, nor can they get their employers missed contributions back.