Constant anxiety about affording retirement

[Jalapinot]

40 years old and only have about 40k in my pension pot. DH ha even less. All down to shit choices made in our younger years/low paying jobs/lots of debt in younger years.

Can't really afford to pay more into it and still have 25 years left on our mortgage. Just keep worrying about how we will afford to live after retirement age. I know that's 25+ years away and it's my fault for bad choices/burying my head in the sand but I find myself constantly thinking about it and having moments of uncontrollable crying. My parents (boomers who don't have to worry about this) keep telling me the state pension won't exist by the time I'm a pensioner.

We live pretty much payday to payday and rarely have treats/holidays.

Day dreaming/nightmaring about having to move into a bed sit at 65 or have the house repossessed.

Constantly worrying about losing my job (not currently at risk of redundancy, the company I work for is growing hugely) and not being able to find one at a similar wage (pretty sure I'm well overpaid for what I do).

I don't really know what I'm looking for since no one can magic money out of thin air and we aren't in a position for one of us to retrain, we're both at the top end salary wise for the sectors we work in.

Probably just to say it out loud.

Does anyone else constantly worry?
I know we can't be the only ones in this boat.

I think this is anxiety speaking, not reality. You are catastrophising. You mentioned the house being repossessed but later said that’s not what you really meant. Take a few deep breaths. You’ll be fine financially. Don’t overpay your mortgage. Interest rates are at an all time low. Pay that money in to your pension. Do not cut your budget down to the bare bones either, it’ll only make you miserable. Maybe consider taking in a lodger, even just for a few months. The state pension will exist and anyone saying otherwise don’t know what they’re talking about. Get out and go for a walk, cut back on caffeine, take some positive financial steps and you’ll definitely feel better x

I wonder if you see your GP about anxiety? I'm definitely not saying that you have nothing to think about, clearly planning financially is a good thing, but pulling your hair out is something that suggests you could do with more support.

I wouldn't take your parents' financial views as gospel. The 'state pension won't exist' thing is something that private pension companies bang on about in order to make profits. I had a company confidently tell me it would soon be gone in 1994, they then misssold me a crap pension.

You have a partner, you have bought a house, you do have pensions, you're doing pretty well! X

OP, I am 51. I have no pension to speak of even though I have a good job as a lawyer. No state pension either. DH will have a teachers pension plus a good state pension, we have a house that we could sell and surely my 94 yo mum can't live forever

It is what it is, honestly dont live in fear of the future, you dont know what it holds. Enjoy the here and now

I'm sure your and dh may have died by then, you may get an inheritance?

@Em2122

I'm sure your and dh may have died by then, you may get an inheritance?

I mean your parents may have died by then

Catastrophising is absolutely a word and a thing. It's one example of problematic cognitions or thinking in CBT.

It sounds like you both need to address your anxiety (as it will just latch on to something else if you manage to reassure yourself on the financial front) and to understand your finances better. Pension wins over overpayments atm because of low interest rates. You can plan to handle issues like the roof with a good sized emergency fund. They will have trouble removing the state pension entirely because of the voter uproar over the NI we pay all our lives, and because it is fundamental to most people's retirement plans. I used to be anxious about retirement. Understanding is empowering. Try meaningfulmoney.tv for a solid podcast and learn your way.

But yes, also address your anxiety.

Yes I think there will be an Inheritance to split with my sibling but I don't have a clue what it could be and my parents are being very cagey.

Logically I know I'm not in the worst position, I just don't know how to control my anxiety.

I think some level of knowledge and control can help with anxiety, so a thorough knowledge of pensions and financial options might assuage some fears?

Think about how well you’re doing to pay off your debts (and once they’re paid off, the money you were using each month to pay them off can be redirected to your pension pot) and to give up with eBay addiction. These are all clever, proactive moves to improve your situation, which means should the worst happen – like the roof caving in – you have the nous to handle it.

FYI last year our roof didn’t cave in, but did spring a major and costly leak, and it’s stressful but not actually the end of the world. You’ll be fine.

I’m in a similar financial position and considering moving from private sector to civil service for the defined benefit pension. You’ll also have a paid-off house which you can downsize from if/when you need to.

This absolutely sounds to me like this is anxiety latched onto this particular issue.
Anxiety loves something to latch onto, and if it's not one thing it's another. This I know from personal experience.
Don't make life miserable now catastrophising about the future.
Yes, it's sensible to think about finances, retirement etc, but this sounds like it's at a level where its detrimental to your life at present.
Consider seeing your gp if need be.

I’d also put ant spare cash into a pension now, rather than overpaying the mortgage.

Doing something practical may help your anxiety. Do a financial review MSE has a good check list. Work out how much “spare” cash you have each month.

I think you are both in pensions schemes so look at how you can increase contributions based on “spare cash” . The earlier you start the bigger the impact on your pension. However, also make sure you have/build an emergency fund for unexpected bills etc.

When you get a change in circumstances e.g. pay rise, children leave home (believe me they take a lot more money than you realise.) re-evaluate how much you can pay into your pensions.

Regularly review your income, out goings and savings/investments.

I think your anxiety is affecting your life and you should see your GP. Meds might help you to take back control and get some perspective.

Unless I have got the wrong end of the stick you sound like you and your partner earn well? You describe being top of your scales in decent jobs I think. So I
I do wonder why you feel their is no money left at the end of the month (and with only a small 3k on credit cards) Is your mortgage huge? In a high cost area? Expensive season ticket for trains? Or do you both pay monthly for luxury cars/pay monthly upgraded phones and loads of fun and entertainment subscriptions?

If you are higher earners/high spenders the drop in living standards to largely live on state pension will be more of course and you could adjust your life/spending to balance out the difference a bit.

I bring home around £1400 working, partner similar. If we retired without a mortgage, or debts, or kids to pay for I don't think the drop on disposable income would be too much on the state pension with a small supplemental pension of £100 Or £200 each.

@NYnewstart

I’d also put ant spare cash into a pension now, rather than overpaying the mortgage.

We were going to start overpaying our mortgage but then realised we'd be much better off putting more in our pensions. We'll aim for the mortgage to be paid off by the time we retire. This is a useful video ... it is targeted specifically at high earners but I think the logic still applies.

www.saltus.co.uk/the-financial-planning-journal/high-earner-pay-off-your-mortgage-twice-as-fast

I’ve no advice about the worrying, I’m afraid, but your post demonstrates very well the damage wrought by inflated house prices. A working couple aged 40 really shouldn’t have to be paying a mortgage until they are 65 in order to afford a two bed terrace. I assume that you had to take on a mortgage longer than 25 years.

You and your husband should have been able to make significant pension contributions by now, but it will all be going into servicing housing debt.

It’s a problem for all of us, indirectly, because people who haven’t been able to save into a pension because of massive mortgages will need pension credit when they retire. Paid for by general taxation. I note that another poster has advised you to move into the public sector for the pension…paid for by general taxation.

I don’t know what the answer is. If everybody in the market for buying a house put their foot down and said, no, this is ridiculous money for a normal family house and I won’t take out a 35 year mortgage that will impoverish me in the long term, prices would have to reduce. If parents said, no, I won’t respond to high prices by giving my kids money for deposits which actually inflate prices, prices would have to reduce because there would be less money chasing the pool of assets. If people who can’t quite afford to buy said, no, I won’t buy an overpriced newly-built ‘help to buy’ house just so that I can buy something, anything, then prices would have to come down. The problem is that a co-ordinated critical mass of buyers would have to do it, and that won’t happen.

Im 10 years younger than you and could literally have written your post as my finances have become a big worry for me recently, but try not to worry too much and just do the best you can. Even small amounts saved now will compound hugely over the years. Also don't take your parents comments to heart, their generation had a very different world growing up so they don't always know best for their children, haha. Try to look for things that you like and invest time in hobbies enjoying life in the now. Also as previous posters said maybe consider the last working decade of your career in the public sector as that pension can then form the bedrock of your pension alongside the state pension. Good luck

I go through bouts of worrying about this and I'm in my mid-30s. The good thing is that we have a house with a mortgage which is more than a lot of our peers. I've recently moved into a job with a local government pension scheme which is easing the worry but I feel like if I don't stay in this sector for the rest of my career I'll never be able to afford it. I have no idea how people in private pension scheme can. I'm not expecting any inheritance from my parents and if anything, might end up in the position where I have to financially support them while I'm still working which adds to the worry.

I sympathise. But there are practical things you can think about, which might help you feel better.

Firstly, you have a mortgage and that's a good thing - because if you are paying your mortgage (assuming repayment) then you will eventually own your house. That means not having to worry about rent payments in your retirement as you will own your home.

Secondly, you should have a workplace pension. Make sure you are getting the best value out of that. Martin Lewis and Money Saving Expert have a good explanation of how saving into a pension is an effective way of getting more 'bang for your buck' (or pound in this case). It might not be a fortune, but any money you put away is better than nothing.

Thirdly, you have very little debt and it's not attracting interest. Which means it's not costing you anything extra and you are in a position to get it paid off ASAP - which means that you can then perhaps look at paying a bit more into your pension.

Finally, ignore your parents. Nobody knows what is going to happen with the state pension - least of all them. I know it's easier said than done, but there is truly no point in worrying about something that you cannot control and which might not happen.

PS. Have a look at the forums on Money Saving Expert. Lots of very friendly and experienced people there and I guarantee that however badly off you think you are, there will be someone worse off, and also people who can give you practical tips on improving your finances and your retirement planning. Good luck!

I would suggest two things. Speak to your Dr about anxiety. It is really not normal to be so wound up that you pull your hair out. You will feel much better once you start to get it treated.

Post a statement of affairs on moneysavingexpert.

Oh dear, DH and I are in the same position as you and we thought we were doing quite well .

It's a fab idea to put away a little extra but honestly I started meds for anxiety about a year ago and they have been great.

Go to the GP about your anxiety

Your money isnt really an issue.

If you can afford to pay off £3k debt you can afford to overpay on your mortgage when that's done.

The worst case scenario is you are on benefits. Millions are on benefits. No one starves.

You really need to stop worrying
You have plenty of time to pay into your pension and have a decent amount at retirement. I would start doing that straight away. Both of you
Your mortgage will be fully repaid before you retire
State pension will still be around. I truly believe this. Can you imagine what would happen if they had to abolish it when millions of people had paid the full years of contributions.
Also it is very likely that you will have some inheritance along the way too
Your position sounds fine to me

Roughly where do you live OP? 2 bedroom in London is different than 2 bedroom in a cheaper area -

Unlike people who rent - you wont have to worry about finding that weekly sum . You could re-locate & downsize that way. You could move to a flat & still have 2 bedrooms & if its a downstairs flat it might even have a garden (with a lot of careful vetting about area & looking on line about peoples experiences). instead of worrying about coping try to think of it as a opportunity - a move to the seaside or to a country town for instance or to another area of the country.
One advantage you have is time to research - have a wander round rightmove - you might be surprised! But if you do think of moving consider things like keeping in touch with friends & family, how good is local transport to access hospitals, shops & entertainment (for your hobbies!)

I can totally relate to this, I a 47 and only have £20K in my pension pot. TBH at the moment I'm dealing with it by thinking I can keep doing some work if I need to, I'm self-employed. Also, my DH and I will have the option to downsize or take in lodgers. There are options. I know what you mean, the whole reading that you need £500k to retire etc is terrifying. Also seems a bit out of whack to work your arse off and save just so that you retire, when you might not even get to retirement. My Mum died at 58, she got a bit of disability benefit in the couple of years before she died, she stopped work at 55. Goes without saying that she didn't get a retirement.

It's definitely your anexity, I have around 50 k in my pension and a house I rent out which we can downsize to and only 4 years left on the rental mortgage

Well I had to cash in my 2 small pensions during the pandemic (self employed). I only have until 2030 to save for retirement. A rather depressing thought as I still have my 16 yr old to keep and cost of living is horrible.

Am thinking after the next 2 holidays will just save hard and stop holidays. A depressing reality. Though ds intends to get a part time job soon.