This is not going to be enough to live on is it?

[meddlesomemarch]

Just done a pension estimate and it looks like in 8 years time, aged 67, the total sum of my pensions is only going to amount to £21k per annum. Whilst the house is paid off, this seems depressingly low. Am I being overly pessimistic here?

Financial advisor has said at the age I am now (59), it won't be worth paying into pension but if I have any spare monthly cash to put into AVCs instead.

Sounds ok to me. I bring home about that for two of us at present and had even less for that past ten years

As user said!! That’s pretty amazing looking at how much you need your pension to be!!

No partner at the moment. I don't live terribly lavishly now - perhaps max a holiday a year which has been abroad but happy to holiday mostly at home if I could afford that. Eat out - currently twice a month. I'd like to keep that if affordable.

I have a car to get to work/take kids to uni. It's paid off but increasingly needs additional work

• and fuel costs have risen. I guess I mightn't have that at 67 though live fairly countryside with reducing public transport provision so prefer to keep it until it claps out.

At 67, essential outgoings (for 1) monthly would be (if costs stayed same which they won't)

Council tax - £143
Water - 43
Internet - 50
Contact lenses- 10
Energy - 200
Food - ? (Variable)
Tv licence - 14
Home insurance - 15

Am sure there's other outgoings but currently no debt

Allowing 150 for food and £200 petrol/car tax and insurance leaves you £850 a month for eating out and holidays! That sounds ok to me.

So you will need to find about £500pcm plus food.

22,000/12 = 1833 adjusted for tax about £1675 pcm.

I can't see what the problem is.

For a pension of about £12k from the TPS I am guessing you had years where you didn't contribute or were part-time.

No costs wont stay the same, but teachers pensions will be index linked so will track price rises and state pension is even better than that. Reports are that this year alone it will increase by 10% which would mean nearly an extra £1000pa

It’s rubbish, without state pension mines predicted to be 12-15k a year and I’m just hoping our house will be paid off. Definitely not as good as pensions use to be. I need to look into it more and see if investments might be better returns etc

I am bringing a child up on my own in less than that I'm afraid!

Well I'd try to save a bit more if I had the option @meddlesomemarch

Having to survive on x isn't the same as asking whether that amount is going to give you a comfortable or luxury lifestyle - looking at which you certainly have some cause to take any actions you can.

Yes, Rose I had significant gaps due to child-rearing.

Hahahahaha!!!
Come back to us when you're back on this planet OP!

FFS. Really?

Honestly it sounds plenty to me.

My ex FIL gets about £18k per annum and has since retiring 10 years ago, he has a car, similar other outgoing and expenses and has built up about £10k or more in savings just from his pension. He's not particularly frugal (admittedly he's a non smoker and only drinks at Christmas) goes away on short breaks at least once a month, and eats out regularly.

I can't see why £21k would be hardship! I'll be lucky to have £10k a year...

That's a good pension?
Honestly, public sector are clueless sometimes.
How much do you think you/employer have paid in to your pension to get that annual amount back?

Financial advisor has said at the age I am now (59), it won't be worth paying into pension but if I have any spare monthly cash to put into AVCs instead.

I don't understand this point. AVCs are payments into a pension.

Is the £21k gross or net OP? What is the difference between your current net pay and the projected net pension income? Remember that you don't pay NI or pension contributions when you are a pensioner so comparing gross pension to gross pay can be misleading.

Are you used to a much higher net income? Also are you supporting student kids? It may feel like you have a lot more going out at the moment. You could spend the next 8 years building up a buffer so you have a lump sum tucked away as a just in case.

As you have employment gaps did the financial advisor mean voluntary NI contributions so that you get the full state pension, rather than AVCs which are into the pension? That is usually worth doing.

To add to the suggestions of PPs if you did want a bit of extra cash while retired, exam invigilating is an option as well.

Interesting thread as I could be around that amount too.

It is fine those posters saying that is plenty, but that is based on today's cost of living. Not 5 or 8 year's time.

Interesting.

I need to disect this whole thread at some point.

Before I had children I was earning £21k a year working 40 hours a week, paying rent etc 🙄

It’s index-linked.

It is fine those posters saying that is plenty, but that is based on today's cost of living. Not 5 or 8 year's time.

The OP is in the teachers' pension scheme which has pretty decent inflation protection so she has much better protection from cost of living increases than many.

If you have a defined contribution pot instead then models tend to base what you can withdraw on assumptions about growth after inflation. Obviously at the moment many of those assumptions are quite far out.

Yes! 4 of us managed on that for 3 years.
We budgeted every penny (money dashboard), had a mortgage, loan and bills to pay but still managed to save enough for a decent Christmas (£500 food and presents) and 2 cheapo holidays a year (one camping, one chalet uk £650 in total accommodation, petrol, food shopping and spending money)

If it's just you, no mortgage, that's plenty.
But it does depend on your lifestyle now and what you're used to.
You cut your cloth.

What is your monthly income now? If its currently higher than it will be at retirement then maybe start looking at trying to live on a similar amount that you would have at retirement I. E £1600 a month. Then start saving anything left to give yourself a cushion that can be used to pay for holidays, cars or house maintenance. If you don't have a mortgage at the moment then your costs can't be that high really
I hope to have a similar level of pension at retirement but I am married but I do think one person could live quite comfortably on it without housing costs

Whole families live off that and have rent to pay.

How the other half live... to expect that not to be enough and no rent to pay....