Rubbish Retirement/Pension

[RedStarLight]

I'm 57. Throughout my adult life, I made sure my priority was to raise my only child and to provide a normal, decent life for her. I went into jobs that were rubbish, mainly NMW ones and never thought I'd be the one without a decent pension.

I live in a housing association property, so I'll not be able to pay for it out of my state pension so I'll have to either carry on working past the expected pension age at 67 or I claim benefits. I didn't grow up with anyone telling me that I ought to save for my pension. I worked two jobs that had pension schemes that I paid into, but I got it all back when I left them. I'm in a job that's only paying 24,500K and I've paid the minimum amount until about 8 months ago when I thought, shxt I need to up my game and started paying in 12%. I know I need to be increasing this a lot more.

I'm not sure exactly how much it is forecasted to be, but I reckon it's only about £3Kpa. I did a pension forecast thing and it suggested I pay around £600pm towards my pension if I wanted a comfortable retirement. My disposable income is around £700pm. I have about £7000 in savings. What do I do?

@RedStarLight I have reached the threshold for NI contributions so I'll get the max. state pension (34 years, right?)

You need 39 qualifying years of National Insurance contributions to get the full amount. You'll still get something if you have at least 10 qualifying years, but it'll be less than the full amount.

you need to 39 years not 35!!! think you can still purchase the extra years though. you can check that!

Regardless of savings, you won't be getting pension credit, OP, because your total weekly income of state and private pension will be more than the £218.15 threshold.

SP is £221 a week….and you may get some help with your rent….put your figures into one of those benefit checkers ….definately get some advice….sometimes it’s just not worth having a private pension unless it’s a certain amount as it cancels out your benefits

I did the gov. thing to check and I've paid enough. I wasn't sure if it was the right no. of qualifying years. I started working from 18 onwards with a couple of years missing.

Is that right? Sure it’s 35 years?

As you don't own your own property, I think you have to be very careful about private pensions and how they interact with housing benefit. Small Pensions seem a better deal for home owners! But I dont fully understand the rules and benefits can always change.

Are you sure you can't get a lodger?

I've known people who are on benefits and their life is so limited in terms of not being able to afford nice things, and some of them have resorted to getting things on credit which I'll never do. They live from paycheck to paycheck. I don't want to be scrimping and saving just to afford an essential purchase like if my washing machine broke down or if I was on long-term sick leave and have used up my sick pay and would have to pay out of my own savings in order to live.

You can’t if you live in social housing

It’s definitely 35 years ….I just checked

Can you get a local authority or nhs job for your last 10myears ….they do a decent public sector pension

Your approach doesn't make much sense. Living on benefits will be less limited than not having the benefits and having even less money.

"God doesn't let selfless people down"

I've heard it all now 🙄

It's definitely 35 years for ni

In general, are all LA jobs have generous pension schemes? I've pooh-poohed them out of hearing bad management in my LA from other employees. I've a friend who retired from the civil service and they're living on a nice pension plus SP. Also, they're a home-owner, so they're living a comfortable life.

I just feel bad most of the time amongst my peers as most people are coupled-up, are home-owners and have decent pension pots. I never got that chance previously when all my relationships weren't successful in the slightest, so have had to single parent my child on my own since she was 9 months old. No CMS either.

Honestly, I think it might be too late for the private pension to be worth having. It will just reduce the amount of housing benefit you get, and mean you don’t qualify for pension credit and the associated extras (like winter fuel allowance). I know people in that position and they would be better off without their tiny private pensions. Plus if you will not have a lot of money in retirement, having a good social landlord (if your HA is a good one) means you won’t have to worry about repair bills etc. I know this isn’t what everyone else has said, I’m just basing this on people I know who are in a similar position only are retired. HA rent should also be well within the LHA limit so you should get your full rent paid if you’re only on a state pension in 10 years.

They have decent pensions. It is dependent on salary level and length of time paying in, of course.

At 67 you'll get state pension. That's a lot more than out of work benefits. You'll also get housing benefit on top of that and unless your HA rent is astronomical housing benefit will cover it. You won't have to worry about bedroom tax.

If you have more than £16k in savings you won't get housing benefit.

Any private pension will reduce your housing benefit. Any private pension would also make you not eligible for any additional help.

Therefore unless you have enough of a private pension to cover your entire rent and entire living costs it's probably not worth having one that you only access at 67. You would actually be worse off. Or, at best, no better off than having just state pension and housing benefit.

I would continue to pay into your pension for now but I would seriously think about accessing it age 60 and clearing it out in chunks. You could go part time then. That would be quite nice. Maybe work part year and have holidays the rest of the year.

Then claim everything you can at 67. There's no point breaking your neck pension wise if it's not going to benefit you. You've worked all your adult life and how the system works is entirely outside of your control.

My SIL just retired from LA at 62….she’s was on around 25k ….so just above MW really….had 26 years in …..got 35k lump sum and is picking up around 750 a month in addition to her state pension. She is actually picking up around the same as she was when working.

This is good advice

It sounds like you have given your all to parenting and now it’s time to focus on you.

In your shoes I would:

• ensure I had a 3-6 month emergency fund
• do the free rebel finance school course (or listen to free meaningful money podcasts or similar) to understand more about pensions and investing. Ensure fees in my pension are low and invest for diversified growth
• take advantage as far as possible of the tax rebate from pension contributions- this may possibly increase after the October budget for lower tax rate payers
• investigate side hustles, getting a raise or any qualifications that could lead to increased income
• consider a job with a public sector db pension if at all possible
• make a hobby of cutting down on the less important things that cause me sy to flow out - have a look at mse martin forums

You may be surprised at how much of a difference a combination of some of the above can make over a decade.

I was going to say the same. This has happened to my brother. It could be that you end up between a rock and a hard place. You won't have enough of a private pension to give you a comfortable retirement but will have too much in order to claim pension credit, housing benefit etc. Look at what's happened to the winter fuel allowance. It's a tough one.

It sounds like an awful risk to go p/t at 60 and take chunks out to spend, and then at 67 to apply for benefits. I'll be too scared to do that if it doesn't work out for me in the end. I wouldn't want to get in trouble. Isn't there a deprivation of capital (?) when you claim benefits?

(Off to bed now, but shall pick up tomorrow night). Thanks so very much to all who's taken time to reply and given me lots of suggestions.

Could you speak to an IFA? I used to work with a lady who was in her fifties and a council tenant when auto enrollment came in. Obviously her situation was different from yours because she didn't have a private pension at all but she did get advice and the advice was not to start paying in because with a small pension and a lifetime commitment to pay rent she would be worse off.

Please - people need to stop saying 35 years NI = full SP - that is not the case for everyone who started work before 2016. Everyone needs to do what OP has done and log onto gov.uk and get their own personalised forecast.

I would recommend thinking about how much income you need in retirement in excess of the SP. Another 5kpa? 10k? Then you can work backwards from there to determine how much pot you need.