Is my pension pot terrible?

[greenmario]

I have a stakeholder pension and in the pot is £3,700

I'm 40

Is this an awfully low amount?

Better than nothing but I'm sure you know less than £4000 will not last for 30 years retirement. Do you have an employer pension?

I'm not working at the minute so no employer pension. When I do find work (in a actively looking) , I can only work 2/3 days a week cos of childcare and the type of work I do is retail so not very well paid and so the pension payments from the employer would be and have been next to nothing so I would rather just pay into my own pension

What is your state pension forecast?
Are you married to someone with a good pension / pension prospect?
Do you have other ways of supporting retirement, e.g downsizing property?
Will you be able to work f/t in the future?

Lurking as this is me

I don't think you need to ask, you know it is terrible. The question is what are you going to do to improve it

It’s not very much, no.

Step 1 is to check your state pension forecast.

Once you have a job, you should be automatically enrolled into the pension scheme. This is a better option than doing your own thing as you’ll get employer payments - free money.

It's peanuts, but at least you're asking now rather than when you're 60.

Are you in a relationship? If your partner works and has a pension but you've been off work due to kids, wise up - he's got security and you don't.

How long have you been out of work? Did you make voluntary contributions to national insurance to protect your state pension? You can probably still do this, you can backdate it a bit I think.

Pension payments from an employer that are next to nothing are still better than nothing. It's free money.

Genuinely, I mean this kindly. Do you really not know it’s very low?

To answer some questions

My partner doesn't have a pension he really needs to pull his finger out but I'm leaving that to him to sort out he's a grown man etc

We rent currently but saving to buy in some shape or form in the future

I was paying 30 into pension but have upped it to 50 and once I get a job I can up it to 100 a month

My state is all completely up to date as have checked and no gaps etc

I do plan to return to work once kids are older so in a couple years

That's meant to say I plan to return to work FULL TIME in couple years. For now I'm actively seeking part time work so hope to be lucky soon. Have been out of work 6
Months

Rule of thumb is half your age as a percentage of gross pay when you start paying in.

So if that’s now you need to be paying in at least 20% of your gross pay into a pension. Never turn down employer contributions.

If you’re already 40 you’ve missed the opportunity to open a LISA as well.

There's no point sugar coating OP that is a low pension and if you're 40s and not in a position to work full time yet, and if it will be low paid work when you do manage to return, it is going to be very low. Have you managed to buy a house?

It is very low but it is good that your state pension is fully up to date! I really wouldn’t be leaving it up to your partner to sort out his pension but would be pushing hard. You have children together and you have taken a hit to raise those children, he needs to be providing a pension for both of you. I don’t work so don’t have much of a pension but I am married and DH is building a good pension. At the moment we are paying stuff off and building up day to day savings (all savings are in my name but of course we are married so they are both of ours just as his pension is) but once we reach a comfortable point I will get DH to start paying into a LISA in my name as well.

Have you got a deposit saved for a house? Just because you’ve worked i retail before doesn’t mean you need to return to retail. Why not join local authority or civil service as they pay nearly 1/3 of earnings into pension?

Can I ask why your partner has been in workplace for 25 years and does not have any pension? This may be more understandable if you prioritised saving for a house but as you’re not homeowners I’m unsure how he could have worked all this time with no pension or property? Obviously I understand it is hard with young kids etc but from your posts it sounds like you were doing the childcare and sacrificing your career. Your husband should have taken this generous arrangement to get his finances in order to benefit the family unit. I hope you didn’t sacrifice your earning potential while he has not progressed for quarter of a century! Ill health aside of course but I couldn’t see any mention of your husband having a condition that makes working more challenging:

No house but op said she wanted to buy in the future?

@Linkedin721 I'm sorry I missed that.

I would definitely prioritise that OP, at least then you won't have rent costs into retirement. And if you can stretch yourselves you could downsize in retirement to free up some cash (but then depends how much that would impact what you pay into pensions, you'd need to consider which you'd rather prioritise: investing more in property or pension).

And yes very good shout to look at public sector, that would be a much easier way of building a bigger pension in a smaller time period. Also flexible so easier to manage part time/flexible working, tbh it's worth looking at now, I wouldn't delay any longer.

I assume you wouldn’t be posting unless you wanted an honest answer so yes, that is a terrible amount. It will give you less than (and probably much less than) £200 per year.

If you can’t manage to contribute significant amounts each month, you may as well stop, particularly if you haven’t bought a house. You will still be grindingly poor in retirement but there are some means tested benefits available on top of the state pension which by the sound of it (unless you have huge savings / valuable assets) you will be entitled to.

To answer some more questions

Partner is self employed and he was never really taught about finances as a child and pensions etc (his parents are lovely but a rubbish with money also). I'm trying to encourage him now to set up a monthly stakeholder pension plan and with my help he probably will

Don't own but am saving towards it so is work in progress. Not to sound horrible but both my divorced parents own a property each so inheritance will come my way at some point which will help but I'm not waiting around for it as don't wish my parents to die just yet and also want you to try to buy asap. Prob will do shared ownership but is a start

Also what is an average size pension pot to aim for? Whether that is achievable for me or not I don't know but I'd still like the answer to my question if anyone has it please?

General rule is ten times your annual salary.

@greenmario average will be meaningless to you unless you're an average earner and spender now. You need to work out how much you want a year in retirement, outgoings should be lower than what you need now if not working (commuting, childcare) housing costs if you've bought etc, but then it depends also on the quality of retirement you want. When you've worked out what your target is, then you can work out how feasible that is.

That is shockingly low. I don't think you're going to be able to buy a house either sorry, your age is working against you