Pension freak out

[ploughingthrough]

I am recently turned 34 and I am starting to feel a bit anxious about my pension provision. I am a teacher - I used to work in a state school and paid into the teachers pension scheme for a few years. this was a mixture of full and part time 0.8 contributions ( I had first child 2 years into career) and I wasn't that highly paid. I logged in lately and as it stands I have 3020 pounds per year (2500 when I'm 65 and 500 more when I'm 68 as the scheme changed). I then stopped teaching for 18 months as I had a second child and then lived overseas for DH job looking after them. I then worked in a private school in the UK for a couple of years and have a pension of just under 10k in that. It's a private one as they didn't pay into TPS. I am currently contributing 100 GBP a month into that but it isn't much.

I am now teaching overseas in a middle management job and DH and I are earning a lot but I'm not paying into any pension at all. We plan to be here 2 years, or a maximum of 3. We came so we could save up some capital to buy a bigger house in an area with better secondary schools for our children. So on return I guess i'll be 36 or 37 and will need to find another teaching job. I guess I'm asking if I've still got time to sort this out when I get back ? How much will I need to contribute to a pension to have a half decent retirement? I guess I'll need to work for quite a long time yet! I hope I haven't fucked up by coming overseas but it seemed the best way to earn the capital for a new home (and also we're having a really good time!)

I'm 42. I've just sat down with my pension advisor because I had a panic on too. I pay £208 into my pension. Pension advisor has said that retiring at state retirement will mean I'll just about have enough.

I have made the conscious decision to overpay the mortgage with commission and overtime payments until its gone and then throw that money at the pension though because I'd like a nice life when we retire.

Thanks nrpmum. is £208 the amount your were advised by your adviser?

I would also like a nice retirement! DH is quite good about his pensions but seeing my FIL die suddenly and my own parents divorced, both my mum and MIL were pleased they had saved into their own pensions so I want to be independently secure too.

There just seems so much to save for. Our future, kids future, decent housing near decent schools. I feel like I haven't thought enough about this and now I'm 34 already.

I'd already chosen to put that amount away (10% of my basic). I am increasing to 15% when I get my pay rise.

You are best speaking to a pension advisor when you get back to the UK.

I know what you mean about stretching the finances to do everything! Ideally I'd like to retire at 65, but it depends on how quickly we can repay the mortgage and get money into pensions/savings. We have child support ending in 14 years. It goes on!

no need to freak out you have plenty of time.

rule of thumb - as a percentage of your salary you should be contributing half your age (as at the time you start contributing seriously) into a pension. you have made a decent start - if you were starting now with nothing in a pension you would need to be putting 17% of your pre-tax pay in, but you can afford to drop that a little if you need to because of your previous efforts. but if you can afford to, stick with the 17%. Typically this would be via 10% contribution from your employer and 7% from you but the employer may only contribute 5% on which case you should make up the difference.

when you are job hunting look at the pension offering as an intrinsic part of the pay offer. a job with a solid final salary pension scheme is actually better paid than one where the headline salary is £2k more pa but the pension is a defined contribution deal.

if you get a job with a final salary scheme, transfer all your previous pension pots into that to consolidate them. If it isn't final salary then leave anything that is in an existing final salary scheme where it is.

Thanks so much for this answer ElluesPichulobu it's very helpful.

I guess that what I have so far is a start! I know a lot of international teachers get sucked into staying for a very long time because the salaries (in this country anyway) are very high but there is nothing going into either of our pensions while we are here so I just started to get a bit antsy about it....

there is nothing to stop you putting 17% of your current salary into a savings account right now. then when you return to the uk you can pay that into your new pension scheme. so long as the amount paid in is less than the amount of take home pay you get in a tax-year, the government will top up that contribution by 20% which will get the new pension off to a strong start.