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Original poster

42 and very little pension - advice greatly appreciated

38 replies

Bonnie2101 · 21/12/2023 08:55

I’m 42 and for various reasons i only started paying in to a pension a few years ago. In those last few years i’ve also had two maternity leaves. My pension pot at the moment is just over £9k which is pretty depressing but i’m trying to do what i can now to help me in the future. My employer is now matching contributions up to 8% so i am upping my pension contribution from 4% to 8% when i return to work in the new year. I could possibly up my contribution to 10% but as my employer doesn’t match above 8% i am wondering if i should that money (i think an extra 2% equates to just over £50 a month) in a different type of savings plan/private pension/stocks and shares?

My student loan should be paid off in a years time, so i will have the money that was paying that off available then. Current that’s around £75 a month on my pro rata salary.

My savings total £37k but approx £15k of that will be used on house renovations this coming year. I have just put a lump sum in a fixed rate bond for a year and that will pay out interest that will max out my tax free savings allowance next year. I also opened a ISA and put the rest in that.

My partner is due a decent pension but we are unmarried so i want to protect my own future and get my finances in order. There are just so many options and things to consider. Any advice greatly appreciated.

NC for this one.

OP posts:
caringcarer · 21/12/2023 10:00

Definitely match your employers 8 percent. If you have £50 spare each month I'd invest in stocks and shares. When your student loan is repaid you could up this to £100 per month. Look carefully over shares that are consistent over time. BAE have been my best shares over the last 2-3 years.

TheCurtainQueen · 21/12/2023 12:09

Get married. I’m serious. You’ve taken multiple maternity leaves which have left you in a very financially precarious position. Meanwhile your partner has been free to work on his career and secure a comfortable pension. Why didn’t he pay into your pension while you were on maternity leave?

Have you checked if you qualify for a state pension?

Original poster
Bonnie2101 · 21/12/2023 12:57

@caringcarer thank you i will look carefully in to investing money each month in to shares and will definitely be contributing 8% moving forward

OP posts:
Original poster
Bonnie2101 · 21/12/2023 12:57

@sonypony Brilliant thank you! Will watch these videos over the next couple of weeks

OP posts:
Original poster
Bonnie2101 · 21/12/2023 13:07

@TheCurtainQueen thank you, yes i agree marriage is something we need to seriously consider now, for many reasons.

I can really only hold myself accountable for my financial situation. My career has stop and started during my 20/30s for many reasons. However I worked hard in my late 30s and now have a good position on a decent salary of £43k FTE. However i am working PT (£32k pro rata) so i am not contributing to the pension as much as i could be FT. It’s my choice to work PT as i want to spend time with my children. My partner and I will sit down together though and see how he can help bridge this gap. He definitely would have contributed to my pension when i was on mat leave if i had asked him, but honestly it didn’t cross my mind. I know i have not made the wisest decisions so far regarding pensions but i am trying to be positive and proactive now and i have at least got a fairly reasonable amount of savings.

OP posts:
ShittingPeugeot · 21/12/2023 14:10

TheCurtainQueen · 21/12/2023 12:09

Get married. I’m serious. You’ve taken multiple maternity leaves which have left you in a very financially precarious position. Meanwhile your partner has been free to work on his career and secure a comfortable pension. Why didn’t he pay into your pension while you were on maternity leave?

Have you checked if you qualify for a state pension?

Getting your partner to temporarily pay into your mention whilst off for whatever reason is quite an unusual thing to do..

Bells2323 · 21/12/2023 14:21

How much could the husband have contributed? £2880 is the max.

Ralphthedug · 21/12/2023 14:30

Our daughter was married for 20 years got divorced and her shit of an x walked away with 134 thousand of her pension pot if youget married be very careful with you finances

ActDottie · 21/12/2023 15:07

Definitely put in the most to maximise the employer contributions. I always think of it as “free money.”

Personally I would put in more than 4% even though it’s not matched but that because I’m lazy and don’t like the faff of having a private pension elsewhere. It’s all invested in similar funds anyway. And if you wanted to you can still diversify it by selecting your own funds anyway.

ActDottie · 21/12/2023 15:10

Oh and you say it’s been eroded because of maternity leaves… but employers I think have an obligation to make sure they’re still paying. I’m about to go on Mat leave and I think I read something about employers having to make up the employee contribution shortfall.

TheCurtainQueen · 21/12/2023 20:39

ShittingPeugeot · 21/12/2023 14:10

Getting your partner to temporarily pay into your mention whilst off for whatever reason is quite an unusual thing to do..

Show quote history

Yes, sadly it is unusual. When I was on maternity leave we agreed that it was wildly unfair that for a year my husband could continue to pay into his ISA and pension but I couldn’t. So we did something about it.

Original poster
Bonnie2101 · 21/12/2023 21:59

@Ralphthedug so sorry to hear that

OP posts:
Yocal · 21/12/2023 22:23

Don't stress yourself OP. You can build on what you have.

You have a healthy sum of savings and 9k in a pension is a start! You have a good income and a willingness to save. Your partner works and has a pension. You have a home/asset. Hopefully you're in a healthy relationship by what you say. You can easily make this work.

I like Dave Ramsey for his baby steps advice. He is American, but you can convert the equivalents of his advice to apply to the UK quite easily. He supports marriage because he is a religious man, but if you can put that aside his financial advice is pretty solid and straightforward. It's about financial peace of mind.

Hope this helps

theresnolimits · 21/12/2023 22:33

I didn’t start paying into a pension until I was 38. Fear not. I overpaid for years and ended up retiring at 60 with a tax free lump sum and a pension of £1000 per month. I think in the end my employer’s contributions were 6% and mine 14%. I think it’s important that you plough pay rises etc into pension once you get over 40.

I was also short of NI (lived abroad for 10 years) so bought back past years. It can be done you just need to be on it.

TwinklingLightsEverywhere · 21/12/2023 22:38

Bonnie2101 · 21/12/2023 13:07

@TheCurtainQueen thank you, yes i agree marriage is something we need to seriously consider now, for many reasons.

I can really only hold myself accountable for my financial situation. My career has stop and started during my 20/30s for many reasons. However I worked hard in my late 30s and now have a good position on a decent salary of £43k FTE. However i am working PT (£32k pro rata) so i am not contributing to the pension as much as i could be FT. It’s my choice to work PT as i want to spend time with my children. My partner and I will sit down together though and see how he can help bridge this gap. He definitely would have contributed to my pension when i was on mat leave if i had asked him, but honestly it didn’t cross my mind. I know i have not made the wisest decisions so far regarding pensions but i am trying to be positive and proactive now and i have at least got a fairly reasonable amount of savings.

I understand why you'd think like that, lots of women are very happy for their career to take a back seat whilst their kids are young because they want to spend the time with them. But in terms of financial fairness you having the kids means your DP can carry on with his career pretty much unfettered, he's benefitting from you taking on more of the childcare and so some equalisation is needed. This is especially important if you are unmarried.

A friend was a sahm for 9 years and I never even knew she was unmarried until they split up. He's had 9 years to further his career (Inc weekend working) and build up a pension which he would not have been able to do if childcare was equally split, she even looked after the step daughter every other weekend. She now has no pension and her career has been set back by time off. All she is entitled to is basic child maintenance. It is beyond unfair.

cestlavielife · 21/12/2023 22:41

If you joint own the house
Your dp can invest in the reno
And you can invest in your pension

Original poster
Bonnie2101 · 21/12/2023 22:44

@Yocal i really appreciate these words of encouragement, i’m trying hard to not get too disheartened - so thank you! I will definitely check out the advice you have linked.

OP posts:
Original poster
Bonnie2101 · 21/12/2023 22:48

@theresnolimits wow that’s amazing what you have achieved! Congrats! So encouraging to hear stories like this. I did check my NI and i am on track to receive the full state pension if i carry on working but will double check again.

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Original poster
Bonnie2101 · 21/12/2023 22:57

@TwinklingLightsEverywhere completely agree, the system is generally very unfair towards the mother. Sorry your friend had such a horrible experience!

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Original poster
Bonnie2101 · 21/12/2023 23:02

@cestlavielife yes we joint own it. We have already done a lot work on the house which my partner has completely paid for so far, he also put up 100% deposit for the house. So actually his savings pot as dwindled significantly over the last couple of years where as mine has slowly grown. Moving forward we really need to sit down and look at our finances and come up with a proper plan as at the moment it’s all a little disorganised!

OP posts:
Yocal · 22/12/2023 07:46

It sounds like you have no debt either, is that right? If so you really are in a good position now to start building you financial security. Just keep your lifestyle in check and plough away investing (in your property and pension are good investments) and paying off your mortgage early. You'll be sorted in retirement. Don't compare yourself to other people and build your life around things you value, which should be non materialistic things anyway. The financial advisors I follow all say buy a secondhand car and live modestly, that is a sure fire way to be richer - most people fall into the trap of trying to look rich whilst going broke.

Original poster
Bonnie2101 · 22/12/2023 08:03

@Yocal thank you. Yes neither of us have any debit/credit agreements other than the mortgage and I have a small amount of student loan remaining. We own a second hand car and have always done it this way. We will start tracking our spending better in the new year and continue to make overpayments on the mortgage.

OP posts:
IDoLikeToBeByTheSea · 22/12/2023 08:08

How old are your DC? Do you need to consider saving for future uni costs etc?
Has your DP ring fenced the deposit he put in?