Do we lack security in old age ?

[Busytimes]

I have been niave about money most of my life i think .
my df was well off and he passed away giving it all to his wife my step mum .
she has since gone to luve with another man .
i am late 50s and I work oart time . i worked for public services all my life and am now burnt out .
Dh similar and is now low earner.
we have no mortgage , the house being worth about 260 k .
we have pensions of
1.5 k a month - dh ( of which i get half if he dies )
450 pm - me .

we have savings of just under 30 k .

money was never important to us - we wee both devoted to our public service Jobs and giving to society .

we live simply , eat well but cheaply and dont go abroad .

people around us seem very comfortable and they have told us ( after us saying we cant afford to do rounds in the pub - which is true ). . Follwing a few beers.. that they consider themselves not rich but comfy wiith more like 300k in the bank. .. and that we are ‘ vulnerable ‘ ?

id appreciate opinions .

i now feel a bit daft that we have never been money motivated and I now , being older , do actually feel vulnerable ?
let my dc down ?
( by not thinking ahead or differently)
. We plan to out the house jnto trust or something so that dc Will get some supporr.

The question you need to ask is 'is your income sufficient for your desired lifestyle not other people's who want more'.

You look pretty comfortable for the basics. Are you receiving those pensions now, or is that what you expect later and at what age? If you're late 50s and have worked in public services, I'll assume that you get these at 60, ie very soon? You also have a decent chunk of savings and own your own home.

However, if you won't receive your workplace pension until you're 67 then you might have to work longer than you really want to, but that probably doesn't apply to you? But don't forget you'll also get the (full?) state pension at 67, which at today's prices is £7/800 pm, so will be £1500-£2000 pm between you.

You say you 'live simply , eat well but cheaply and dont go abroad' and don't sound like you're unhappy with that lifestyle.

You're not responsible for facilitiating other people's wants and needs or keeping up with their expensive lifestyles, if you don't want to, whether friends or DC. You sound like you could give your DC a bit of money/help them through university, but it's absolutely not up to you to keep working to fund the lifestyle of young adults who should be able to stand on their own two feet.

It's fine to say you don't want to get into rounds, especially if you're out with people who drink more and/or more expensive drinks than you. You'll only make yourself 'financially vulnerable' if you to to spend up to their level, instead of keeping within your own means. Fine to do it occasionally, but not as a matter of course, that's where you risk running out of money.

Sounds good to me, OP.

As above, what other people have is irrelevant.

Are you in the UK? Have you paid NI for 35 years? If so you'll be entitled to a full state pension which will give you roughly £800 a month each from age 67 or 68 depending on age.

So from now until your late sixties, you have £1,950 a month plus whatever you earn, and then £3,550 a month. Plus a mortgage free house. That's very comfortable compared to a lot of people.

If you're in your 50s and worked in public services all your life, it's likely that you were 'contracted out' of the state pension for a significant portion of your working life (everything before about 2016 depending on which area of public services)

This may mean a lower than expected state pension as you'll likly have less than 35 qualifying years.

If you haven't applied for a recent forecast, it may be worth you applying to the DWP for one for a full picture of your pensions.

If that's the case about the pension, it might be worth using some of your £30k to buy added years.

This is one of Martin Lewis's current campaigns but it needs to be done this financial year for maximum benefit.

Check your state pension entitlement. If you each get the full state pension, you’ll be very comfortable after 67. From next April, it’s £10k per person. So with £2k per month private pension between you, and with ~£1.8k in state pension and no mortgage, once you hit retirement age you will have a monthly income of almost £4k between you and no mortgage. That’s a household income of £45-50k.

Early retirement may be tricky with low savings.

Thank all .. i do appreciate it

dh retired at 60 . From career .. still works pt
i took my pension at 55 so ot is lower rhan it could be if waited but was so very exhausted i chose that route to supplement my now low Earings .
i did take 5 years out to look after dc as i had 2 under 2 years and was guarenteed a job at my grade on return … and nursery fees wd have cancelled my wage / i absolutely never never wanted promotion in my field as i worked in a very highh stress area .
so .. yes must must oay jnto my pension ! ( state )

OP, if you were claiming child benefit while not working, the govt will have paid your NI for those years, so you may already have your 35 years. you can check here https://www.gov.uk/check-national-insurance-record

You sound fine to me.

You have nearly £2k a month without a mortgage.

To put it into perspective, if you have worked in the private sector, you would have needed to have saved at least £500k to equate to that.

You’ve been very lucky in your naivety - lots of public sector workers are like this and don’t realise how good the pension is.

£2K/month with no mortgage is more than enough to get by - the public service sector makes up for their piss poor wages by having decent pension schemes.

£1000/month will cover bills quite comfortably; leaving you another £1000/month to piss up the wall.

Sounds fine day to day, but I’d be worried about £30k in capital to last the rest of my life. You will need a new roof/ new boiler/ new car / etc every so often which (alongside inflation, probably) will chip at that amount.

I’d be making sure you keep some of your income assist for those kinds of eventualities, rather than relying on your current savings.

You are probably better off that the people with £300k savings if they don’t have DB provision and will be relying on draw-down or buying an annuity from their DC pension pot.

To buy an annual pension which is index linked and has spousal benefits worth £1.5k per month - ie £18k per year is likely cost over £400k.

You are far better off than most.

People forget that in t retirement, most won’t be making pension contributions or paying much tax and if without a mortgage won’t need nearly so much money.

Look at WHICH? To see income levels suggested for couple for comfortable, moderate, basic retirement etc. Get your state pension forecast and you will likely find you are actually fine.

What do you mean by “ contracted out” ? I have an NHS pension , and with Agenda for Change the terms were changed some years ago ( less favourably obviously) and I had to choose between retiring at 67, or at 60 with fewer benefits. I chose the later. But I didn’t think that was contracting out, just the NHS changing the terms of their pension package. Am I wrong there?

'Contracting out' of SERPS:

www.which.co.uk/money/pensions-and-retirement/state-pension/what-was-contracting-out-ascMg4t2I7Hk

State pension used to be in two parts: Basic and Additional. You could opt out of the Additional tier and pay a lower National Insurance contribution. This was very common to do if you were paying into a work pension scheme.

When the two tiers were replaced with a single state pension, people who had opted out of the higher tier won't accrue the full amount of state pension entitlement for the years they were contracted out (ie paying less National Insurance).

If you were contracted out,you would have had a period where you paid lower National Insurance, in return for a lower state pension.

The intention was that your occupational pension would make this up.

It would be your state pension that will change if you were, not your NHS Pension

www.gov.uk/contracted-out/check-if-you-were-contracted-out

Gosh I had no idea, I have just checked my forecast and indeed I was contracted out so lose £44 pw of state pension. 😯

Once you know the impact of contracting out, you can look at whether buying additional years would benefit you

www.moneysavingexpert.com/savings/voluntary-national-insurance-contributions/

My DP works for the LA ....hexwas contacted out for 11 years ......we naively didn't really think about it at the time .....he will actually still have 35 years in when he retires but thats more luck than judgement

It’s not 35 years for people who are about to retire. that is for young people starting paying now. For older people It is really complicated but the only way to check is to register with Government Gateway and Check Your State Pension.
my OH needs one more year and he has already contributed 39 years.
Everyone should check their NI and State Pension at least once a year

You say you have pensions of £1500 and £450 a month. Are your part time earnings on top of that?
If so then that's a decent amount of monthly income if you're mortgage free
Even though bills are high I'd be looking at boosting my savings while still working

It sounds ok to me.

@isthewashingdryyet I find the government state pension forecast very confusing.

It says I need to pay in for 3 more years to get the full state pension. But I contracted out for a couple of years about 25 years ago and paid into a private pension. The government forecast says this amounts to £20 PW. So will that be deducted from my state pension when I eventually receive it in 2037 when I'm 67?

I'm 52 now and plan on working for another 10 years.

If you're mortgage free and have an income of £2k+ per month I think you're doing pretty well

Thanks for the link @chocoshopoholic definitely worth considering.

I've been worried about this and in a far worse situation than you after my divorce. Only renting so no security of having my own home. Like you I have £30k in savings and I receive £1k a month pension. I work freelance so I do earn but it's a bit hit and miss. I know I have more than many but feel I should have much more at this stage of my life ( I'm 55) and sometimes it really worries me