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.

Why aren't we hearing more about this in the news and on mumsnet? People don't seem vocal and therefore it seems not to be an issue. Is it a time bomb not yet happened? ? Or are the majority of folks OK and have a minimum quarter of a million in the pension fund bank?? It baffles me that there seems to be a hidden or silent poverty amongst retirees or older folks and no one seems to see it coming except for a few here on mumsnet. I have no idea to be old and struggling to pay for food and bills and not find work. How frightenING.

Personally I'm in denial. I think I'm not the only one.

petpank did you have to set up a new pension or have you got an old pension? If you have an old pension then you can 'carry forward' your unused allowances from the past three tax years. So, you could contribute another £8640.

CookieDoughKid I think the government is starting to do more about this - every employer even tiny companies of less than 5 people is soon required to have an auto-enrollment pension scheme (this is being rolled out at the moment and the deadline for some companies is still in the future) so the apathy that currently stops people from getting around to sorting out pension provision should significantly reduce (though it will still be possible to actively choose to opt out if you are determined not to save for retirement). Unfortunately the main positive effect of this will be for people currently in their 20s and assuming most people on this thread are already at least pushing 40 it's coming a bit late for us.

I think you'd have to be willfully blocking your ears to all forms of media to not be aware of the dangers of poverty in old age. Every few years there's a big fuss about the introduction of some new change in state pensions which make it fairly obvious that it is really important to have some kind of personal pension.

every employer even tiny companies of less than 5 people is soon required to have an auto-enrollment pension

It's actually as low as 1 worker.

So the government's recently commissioned review of pensions has been published today the "Cridland report". A summary with commentary is in the link, with key takaways below, but the whole article is worth a detailed read.

www.moneymarketing.co.uk/major-govt-review-recommends-speeding-state-pension-age-increases/

The state pension age will need to increase again just ten years after the Government completes its last scheduled rise, according to a key report which also recommends abandoning the state pension triple lock.

The hotly-awaited Government-commissioned review by former Confederation of British Industry director general John Cridland into the state pension age has been released today and recommends that it needs to increase from 67 to 68 between 2037 and 2039.

The Government has already committed to raising the state pension age from 65 to 66 by October 2020, and then to 67 by 2028, but Cridland has recommended the rise to 68 comes at least 7 years ahead of the planned 2046 date.

To smooth the transition for those affected, Cridland has recommended offering means-tested support for the year before state pension age to those who can’t work due to ill health or caring responsibilities.

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I fully expect the current government will embrace these recommendations .

Another depressing must-read based on the reviews published today.

www.telegraph.co.uk/pensions-retirement/financial-planning/state-pension-age-look-up-when-you-will-retire/

petpank

"Wouldn't it be great if Mumsnet could somehow get some of us who wanted it - a better bulk pension deal?! Like the 'cheap energy club' - but for pensions... especially aimed at women who sometimes have forgone contributions when on maternity leave and when the family's purse has been somewhat squeezed. I guess that's unlikely ???"

But pensions are not expensive - why would anyone want to 'do a deal' for the country's lowest earners anyway?

There are the following things to consider when you think about pension:

how old am I?
how long will it be until I retire?
how much can I pay in?
how much do I want/hope for out?
what other savings and investments do I have?
what debts do I have?
what tax do I pay now?
what tax might I pay in retirement?
what platform/sort of pension is best for me?
how do I want to invest the money inside my pension wrapper?
what is my attitude to risk?

If you want to see an IFA (I wouldn't, I think they are a waste of money and actually cost you more money) then at least have the answers to those questions sorted out before you see them.

If you want to see an IFA (I wouldn't, I think they are a waste of money and actually cost you more money)

That's quite a sweeping statement! What makes you think IFA's are a waste of money?! Is it just IFA's that you think are a waste of money or all Financial Advisers?

Mine will be just short of £16k a year if I retire at 60 with a lump sum of £48k

By then I will have worked for the same company for 41 years.

I have no idea what the actual pot is, it is a company pension that I have contributed to since starting age 19.

Glossolalia

"If you want to see an IFA (I wouldn't, I think they are a waste of money and actually cost you more money) "

"That's quite a sweeping statement! What makes you think IFA's are a waste of money?! Is it just IFA's that you think are a waste of money or all Financial Advisers?"

You're right, I meant all financial advisors (no capitals required).

It may be 'sweeping' but I am allowed an opinion.

I know what they do and I know I can do my own research and do fine without them and pay lower charges.

For the sums of money most people are talking about here I can see zero reason anyone would use one. Stick the money in a low cost tracker via a low cost stakeholder. An advisor would tell you the same and charge you £300 for saying it.

I think they're OK if you have so much money you don't know what to do with it and have no time at all to look into how to invest it. But not many people like that posting here that I can see.

Of course you are allowed an opinion

I just think it's bizarre, IMO, to say that all IFA's are a waste of money. In your post you didn't say that you meant that based on the response on this thread so it read as if, regardless of circumstance, they were a waste of money. This, to me, is a bizarre opinion.

Glossolalia

So, now we've gone from 'sweeping statement!' (important that exclamation mark) to 'bizarre opinion'?

I specifically didn't say "no-one" should use them, I said - in actual words that I typed - that I wouldn't use one.

However I do think that regardless of circumstances they are a waste of money - sorry you find that bizarre or if you are one but if they make people feel better about their money then that's a useful function I suppose.

I'm afraid I mostly think IFAs are a waste of money for people with just tens of thousands in their pot.

The problem is, that to have a meaningful discussion with a lot of IFAs you have to do all the legwork yourself in terms of summarising your pension situation, gathering together information from various employers' schemes or stakeholder pension/SIPP providers etc and by the time you've done that you're well on your way to understanding what your likely pension will be anyway.

There's enough information out there to educate yourself if you want to, rather than spending £500-£1000 to be told what your state pension will be, and that the £50000 in your personal pension will not be enough to retire on!

I appreciate that some people just aren't interested and want to 'hand it over' to someone else, but I just know of too many examples where IFAs are charging 2%-5% to stick some money in a tracker fund which a person could do themselves for 0.25% or less.

I'm afraid I mostly think IFAs are a waste of money for people with just tens of thousands in their pot.

I agree. Not everyone needs individual advice, but a lot of people need guidance and education.

So some people think IFA's are a waste of money. Fine - I would prefer to waste a bit of cash now than a lot in the long run.

I've been reading lots about pensions myself and most of what HMRC puts out there is in opaque language that helps virtually no-one. It's hard to find unbiased advice.

I would disagree that pensions aren't expensive. A 1% charge adds up to a very large amount when you do the maths... ! I'm aware that there are cheaper pensions out there but seeing as I haven't yet found a .5% pension I can move my small pot to - which also has a good reputation - I'll probably try and discuss that with someone more qualified than me. Like an IFA.

petpank

HMRC are not really there to tell you about pensions, only tax. Try the Money Advice Service.

Costs, most stakeholders are around 1% (I've just opened a Virgin one for 1%, because they have a £50 cashback if you pay in £50 for 9m, then I shall close it and transfer it out to my SIPP).

But if you open a SIPP the costs are lower, here is one (coincidentally the one I use):

www.youinvest.co.uk/sipp/charges-and-rates

No charges to transfer in but there might be charges from your current scheme to transfer out. Once transferred, look for a low cost tracker. With those you need to look at what is called the TER - total expense ratio. But those charges would be there no matter what pension you choose - just hidden inside it.

In my SIPP I do the Vanguard (TER .22%) and two ETFs (no charge for ETFs). I do also have a L&G old company pension which is next on the list to be moved to the SIPP.

But I also have an ISA and in there I tend to mainly hold individual company shares, some ETFs, and a couple of investment trusts.

I have zero financial training or education. I learnt how to manage my own money by reading books, websites, message boards. If I can learn it, anyone can. The information is out there if you want to find it.

Here's one: monevator.com/

But start by considering the questions I posted earlier, the IFA will ask you similar anyway so you may as well think about it in advance.

A lot of the best pensions (ie with the smallest management charges) you simply can apply to as a private individual - they only accept applications via an IFA.

I've got about £3k in a pension fund from my last employment, and that's it. have just started a NEST one as I'm self employed so I don't have an employer to pay for me. When I was young I was in a low paid job for years and couldn't afford a pension .

But my priority now has to be keeping the mortgage paid and bringing up my child in my own.

I'm not too bothered though, I can always downsize. That's assuming ive paid the mortgage by 67 as had to remortgage at 42 after XH walked out.

My aunt paid into a good pension for years, deferred state pension til 65, then died the year after she retired and all that money was lost and her husband also died the year before.

Great thread. I agree you don't need an IFA, lots of info out there.
I think the trick is to get a
passive income asap. Either through s&s, rental property or a business.
Have no debt.
And still to have a happy life before (and then after) retirement.
We can all dream
(I like the op with the questions to ask).

I have been reading about this recently and to have a pension of £30k you would need a pension pot of more than half a million quid. That's an unachievable amount for most. The only people who are likely to be close to that are high earners and those in public sector final salary schemes. Its quite scary really how much you have to put by. Even more scary when you factor in inflation and the fact that in 20 years time 30k won't buy nearly as much as it does now.

Actually, half a million would only get you around £15k really, maybe £20k. 3% or 4% return is what people generally work on now.

peukpokicuzo - can you name any of these pensions that are low cost and only available through an IFA?

I have just become self employed and now looking at the pension options. Bit confused really!!!!

beepbeep for my self-employed pension provision I use the SIPP. In fact, for my employed pension I do too, I just transfer it over later.

thanks, I'll have a look