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?

Don’t rely on inheritances. If your parents have to fund care for themselves in later life, this could eat away at anything earmarked for you. Why not go on the Citizens Advice website. They have pages about pensions and practical ways to boost their value.

This! My grandparents owned houses but neither of my parents inherited, it went on care. My in-laws did both inherit - in their early seventies! They both had a parent live into their nineties.

@KimFan good idea to visit CAB I'll try to go after half term

https://www.moneyhelper.org.uk/en/pensions-and-retirement/pensions-basics/pension-calculator

This might help?

A general rule of thumb is to take your pot and divide by 25 to give you your annual income from it - based on you having a retirement lasting 25 years and withdrawing 4% a year from the pot. So conversely you should multiply what you want your annual income to be (before tax) by 25 to get how much you need. So if you need an income of £10k per year from a private pension, that's roughly a pot of £250k. They say that for a comfortable retirement an individual should be aiming for £600k.

The people who suggest trying for a government job (with a career average unfunded pension) have the right idea. You’ve missed 20 years of compound interest. It’s going to be hard to make up for that. To get a decent pension, you need to be putting high hundreds to over £1000 a month in. It doesn’t sound like that will be possible.

When you get a job you really should use the company pension - a 3% contribution is better than nothing. You’ve been missing out on free money

Others have said it but I wanted to reinforce. Please, please don’t rely on your parents money. That will get eaten up frighteningly quickly if they need care in later life. It would also potentially put you in a horrible position of making decisions for them based on your own need for their money. They should be able to spend their money on themselves when they need it. They worked and planned for their retirements. You need to do the same for yours.

@Bobbie12345 if u actually bothered to read my posts you would see that I stated I am NOT relying on inheritance

I have read all your post and you haven’t said this anywhere. You’ve said you are expecting an inheritance but you are ‘not waiting around for it’ in regard to buying a house. Nothing at all about whether you are relying on inheritance for retirement planning.

The OP is in a stressful position and is trying to sort it out so probably best not to nitpick about choice of words.

Public sector may be the way to go to get some sort of pension. it seems like you would be at the lower end of the pay scale but it would be something. Your pot would currently pay you about £150 per year.

@Limesodaagain thank u for a nice reply

I'm currently today in the process of going through old work places and contacting them to see if I had a pension with them and who the provider is so I can transfer to my main pension. So far I've found an old pension only worth £400 but every little helps and I can now request this money into my main pension

Every little helps as Tesco say

Yeah it's peanuts, would last you about a month or so? Depending on inflation by then. I'm 39 and mine is just under 24k which is really rubbish. I'm trying to put more into it though.

You mean like accusing people of not reading something she never posted in the first place? That sort of nitpicking?

Anyway, no need to worry. If the OP wants to be deliberately nasty to people trying to help (and giving good advice about not relying on an inheritance), she can go ahead - she is the one who will find people decide not to engage further.

I know my pot is awful and I'm not banking on any inheritance but equally I know it's a very real possibility one day. However I know it's not guaranteed which funnily enough is why I'm trying to get on top of my pension asap. I don't have a huge pot and it's not ideal but it's better than nothing at all and I'm trying to put as much money into it as I can on a monthly basis which at the moment is only £50 a month but like I say I'm currently job hunting and interviewing so hopefully can increase this monthly amount soon

@greenmario have you had a look at public sector?

Well, my sister has not got a pension and is nearly fifty! They don't own their own home too! She is finally going back to work full time and her salary is extra so they are putting her whole salary into savings so they can buys a flat. Not everyone has been in a position to save. She has always had little part time jobs and has just retrained at uni and secured a job around 35k. Never say never!

We are in a cheap city at well so she should be able to buy something for 100k in five years!

@peebles32 thank u for sharing and yes I agree never say never. Good luck to your sister

In your position I would look very hard at jobs in the NHS or for your local council. The pension you would receive there is called a ‘defined benefit’ pension and would accrue much more quickly than anything you could ever hope to save in a ‘defined contribution’ pension such as the one you have now or the one you’d get in a retail job.

Op, can you please tell me what stakeholder pension you have? (With what company)

Im currently not working, a sahm, and dh self employed and we have no pensions

Have no idea which one to set up

Sounds like you’ll be better off relying on benefits when you both retire. Just save up to the savings threshold.
Just means you can’t choose to retire earlier than 67/68 although many people find a way to be on benefits before retirement age. Ill health etc.

Why would you not take the employer contributions no matter how small they are?
Over time that can build up.

that is what i would also suggest