Building up pension challenge

[Dashel]

Hi all,

One of the things that I have financially gotten around to looking at properly during Lock Down is my pension or lack there of.

I have a work place pension which is easy to log into and to make one off payments to, so I thought that now would be a great time to start trying to build up this pot as it’s not like I am spending normally, with hardly going out, no holidays or weekends away or meals out.

I wondered if anyone else out there would like to join me for support and to hopefully increase our pension pots to help have a more comfortable retirement?

A pension thread on here a few months ago, leads me to believe that I’m probably not the only one who has left it a bit late. I started this year with a work place pot of £3k so not going to keep me in a comfortable retirement unless it improves significantly.

Any money that I pay into this pot does get the 20% added to it (short of a lottery win I won’t be exceeding the £40k limit for the tax benefit) so I am hoping that I can finish the year on at least £10k but in an ideal world it would be more.

Thanks for reading and it would be great to have others for support and encouragement!

Inspired by this thread I have made my first AVC. I already made quite large monthly contributions but I am going to start making small one of contributions at the end of month with any left over money. Will do the same for my DH when he finally gives me the log in details

One thing that I find remarkable is how difficult Aegon make it to do this. I have spent about two hours on the phone trying to sort it but even now have log on details in it's genuinely impossible to work out how to make the contribution. Did it through aviva in the end (other pension) and it took two seconds

I'm also paying down our massive mortgage which is controversial on pension threads but I think me and DH would feel better if wasn't quite as high

Opened up a vanguard pension today will feed £100 a month in & add extras when I have spare cash

Set up a big additional contribution today: hurray! Agree @absolutelyknackeredcow that they don't make this easy! Mine are old pensions (I still need to consolidate) and in order to make an additional contribution I had to ring them and then get them to email me the paying in info. Seemed very arcane. And - wise ones - when I rang, they told me one of my three pensions is 'closed book' so won't accept any additional payments. A quick google hasn't helped, so I don't suppose anyone in here knows??

Congratulations on all the overpayments! Every bit helps.

I have projected my pension to the end of the year and it was around £8800 so still well short, but maybe I will get lucky with the premium bonds! I am trying anything to raise some extra. I managed to save £10 on my monthly phone contract so I will start moving that across to my overpayment account and I noticed I had been charged an extra student loan payment that I need to get refunded.

I’m sorry that people are having issues paying into their pensions. Mine is so simple for overpayments either one offs and I only had to email payroll asking to increase my monthly contribution and that was done. When DH increased his monthly contribution his pension provider wanted a detailed form signed off by his Financial Director!

@HandlebarLadyTash congratulations on your new account!

I’ve been catching up on the fire thread and then found this one. Thank you to everyone that has shared. I’ve taken so much from it already.
Financially I am both very risk averse and have no idea how most things work. I find the whole thing a bit scary / daunting. Between us (me and my husband) we have a pension of just over £2k saved which at 37 and 41 isn’t getting us very far.
It’s all mine as my husband is self employed and has zero. It’s a nest pension from my last employment (currently a sahm) and I’ve seen I can add to it. Is this something you’d advise or should I look at other pensions?

A bit of background. I was intending to start looking for work last year, but the pandemic meant I’ve basically just tried to survive and any job hunting hasn’t got me a job yet. I imagine it will take a while due to current climate and my gap. I’m as mentally prepared for this as I can be. From that, the idea is that we still live off of my husbands money and use mine to pay into a pension for us both, overpay the mortgage and have some accessible savings building.
Looking at the advice here I think my first port of call is a review with a professional financial advisor? Then review yearly? While trying to maximise my income as due to me currently earning £0, I’m where we could make gains. My husband is paid well but it’s variable and that’s another reason I want something more steady for one of us. Planning the future is very tricky.
Thank you if you’ve made it this far. I like the idea of adding little and often as well to both the pension and mortgage to try and get some progress. Our mortgage is large, but in theory we wouldn’t need to move again and have approx 50% ltv.
Some really inspiring stories.

Financial advice could be expensive and unless you are looking to pay in a lot of money before you find a job might be pointless as your job might have a good pension so normally the advice is to pay into your workplace pension first to get the employer match.

One thing to think about is if you die before your husband but after you have started claiming your pension, he might not get anything. So he might be better to look at getting something in his name as well.

You can only get tax breaks on about £3500 (sorry I’m not sure of the exact figure) if you aren’t working, but if you were thinking of paying in less per year than that then I think you might be better to pay into that and potentially transfer it in to a new pension or save the money and overpay your new pension when you find your job

Amazing thank you @Dashel that’s helpful. I think at the moment I’m hoping to get everything in place that I can. My husband is definitely going to open his own pension too.

Now my normal monthly contribution has gone in, I’m at the £6k mark, it’s still pretty pants but better than in November when it was £1.5k. I still haven’t heard from my previous pension and I have chased that again.

My Vanguard account is ticking along and we should be renting out our refurbished out building in the next 2 to 3 months so all pretty positive. It just gets dull as everything is so automated

I'm marking my place on this very useful thread!

That's amazing work @dashel

I know what you mean about when things are automated - it takes the fun out of it! I have been making a manual payment for my pension recently and although it takes me longer it feels more "real".

I'm 40, self employed, only started a pension this year as I had no spare money before this. Can only afford £50 a month at the moment. I have just over £400 in my pension at the moment. Basically I'm fucked!

@CheeseToastieLove

As long as you have paid your ni contributions ok, you should hopefully get a state pension as well. If you haven’t checked that then I would do that ASAP.

If I were you, I would carry on paying what you can and hopefully you will be able to increase the contributions in time. If you haven’t already gone through your expenditure with a fine tooth comb then maybe now would be a good time? Or look for ways of bringing in a bit extra?

@Fleurchamp thank you 😊 my side hustle challenge does keep me on the ball and occupied. If I can bring in a bit extra then it adds up in the long term and keeps it more real somehow.

Not long till the next lot of Premium Bonds results are in so fingers crossed for next week. I know the odds are useless but I live in hope!

Thank you. Yes, I'm pretty strict with my budgeting spreadsheets, even down to the last five pounds. I'm lucky in that we do have a mortgage, carN and no longer have debts. I've been looking into starting a small side business. I doubt it would bring in much but every little helps. I have a little in a Lisa and a little in premium bonds. I always remind myself there are many people worse off. I use topcashback and ebay, although the money never seems to get saved.... Must try harder!

@CheeseToastieLove - every little helps. Sounds like you already have some great frugal habits. That will be invaluable in retirement! I think focusing on pension contributions makes me work harder. (I’m also self employed. ) I’m putting in £250-£500 a month and will just keep trying to stop spending on inconsequential items.

Great to see the thread is still going!

How is everyone getting on with their pensions?

I'm still adding £350 to my LISA each month, but have started to save extra in another account which I'll add to an ISA or SIPP when I get the chance to open one. At the moment it's only £50 extra but I'll soon increase this to £150.

I've also started transferring £400 to my husband's account for his pension (trailing spouse/made redundant due to covid) and will increase this to £500 too.

I've taken up lots of extra work over the summer holidays (teacher) and have managed to make an extra ₤8k, so will add that to savings too.

We have a long way to go to reach long-term financial security, but I'm determined to keep plugging away at it!

@Lollipity wow that’s really inspiring!

I'm with lgps, however I'm on a low wage. Is it better to increase my contributions with this or open up a separate pension? I'm already making avc's of £50 a month, hoping to increase slightly I'm just wondering as I dont earn much which is better use of my money. Would like to have something when I retire.

Hi everyone and thanks @Lollipity for giving this a nudge.

I started this year with my current balance of £3,000 and am now at £7,500 in my workplace pension.

I have opened a S&S isa as well with another £1000 in it

I requested the balance from my last LPGS ages ago but they still haven’t come back to me, I received a letter saying a website is being set up for it though so maybe that might help. I never made additional payments to mine so I can’t advise on those sorry.

I have just finished some expensive home renovations so will have more money available now, plus the renovation work enables us to rent out a bit of the house so that income is going to pay for further renovations to our bit of the house and the garden.

We have been talking a lot of retiring abroad as well, is anyone else considering that?

@Dashel you've made great progress from your starting point, such a good idea about letting out part of your property - we've talked about doing something similar once my youngest has gone to uni/left home.

I also quite fancy living abroad again - we are in China now (currently waiting for typhoon In-Fa to hit). Might do a work stint in Thailand, but fancy a retirement somewhere warm in Europe. Menorca/South of France or Portugal.

Is this for real, Average pension pot 60k..
Tha annuity estimate is a long way off.
If the pension pot average is 60k this is a hugely worrying future

Pressed too soon
www.telegraph.co.uk/financial-services/pensions-advice-service/what-is-a-good-pension-pot/

It seems so wrong that we have negotiate the stock market with very little knowledge yet it is so important that we do

Now if the new state pension is £179
& pension credits kicks to basically bringing people up to that level but in addition you get access to other benifits like the housing element

Does that mean if you have saved you will be worse off that those that have saved?
we need to protect those who for whatever circumstances haven't managed to make savings (& annoyinglythat includes those who could have saved but spent)
But for the people who have paid in the NI
yet havent managed the massive pension pot this group are failed by the state. For example they could be home owners so not costing housing benifit yet no access for help when the house needs maintenance. If i pay in, i would expect some sort of pension enhancement, not the other way round
I have so many points & in no particular order...

Times have changed, more people live alone mainly women) & these are the same women who reduced hours & gave up work & cannot rely on the husbands goldplated final salary pension.

The basic pension is not a living pension, could money be saved by removing admin on all the tiny additional top ups paying an amount that can be lived off - people ask about about raising minimum wage, raising minimum pension should be added into the argument.

With the changes to the final salary pensions, the huge increase in cost of housing & cost of living, the increase in people working from job to job, rather than the same job for 40 yrs. Pension pots are going to remain small - how will we survive

Oh & it pisses me off that if you are in a couple you have joint claims, looking at the pension credit it seems that it is the same for this
I am an individual have paid in separately do not need to be tied to the other person, grrr

www.moneysavingexpert.com/savings/pension-credit/

Sorry must be feeling a bit ranty. I'm moving on
I am saving hard & putting bits into my vanguard which goes up & down but every bit extra (hopefully) is a good thing.
Also took the step to move kids isas to vanguard with the plan to put them into the 80% lifestyle. Currently the money is sat in cash & the fund is going down, but will need to buy at some point.

@Dashel - you’re doing well with the pension. Per your earlier comment, you can pay in £2880 if you have no taxable earnings (I do this for dds) and government will add 20% (so it’s £3600 in the fund).

Also if you die under the age of75 the funds in your defined contribution scheme go to your heirs (well generally whoever you nominated to the pension co) tax free. So it’s good to pay into a pension if you want a tax advantageous way of making sure young children or spouse are provided for while young.

Thanks to this thread I started paying 80 quid a month into an old pension. That one combined with my fairly new lgps one will give me a whopping 4k in retirement, but that's a nice add on if the state pension is still there!

My job has changed slightly and I'm not sure if I will have £80 for this but will make sure I keep paying something in each month.