Worried about lack of pension

[Ritaskeeterdidit]

I’ve found myself in my late 40s with only around 50k in my pension pot. I’ve been neglecting it for years due to having seemingly more important things to pay for/working part time to raise children and now I’m really worried. I’m self employed so no workplace pension to join. I will get a full state pension (whatever that looks like by the time I reach retirement age) but I’m not sure what to do for the best to bolster my private pension. How much, realistically, do I need to have in the pot to be able to live comfortably? Do I need to open a basic pension with AJ Bell or similar (one where I can be hands off) and put away as much as possible? I won’t have a mortgage by the time I retire so that’s something but I’m worried about affording the basics.

If the state pension becomes means tested then it will not survive.

At that point you will be very glad to have your private pension.

Same for the NHS: if it becomes means tested it will very soon no longer exist.

They pay significantly less taxes in US.
Those who work there, especially at the higher pay levels, get substantially better services.

I'm not advocating US system by any means, but let's don't twist the facts.

Our current system does discourage savings or working more at a lower end.

If the state pension becomes means tested then it will not survive.

At that point you will be very glad to have your private pension.

Same for the NHS: if it becomes means tested it will very soon no longer exist.

If we get Reform in 2029 they will certainly dismantle NHS and sell UK to US healthcare providers. I don't think state pensions will become means tested, no party would dare to touch it, but state pension with no free healthcare won't be fun

Re: the triple lock, I must admit I am unsure why there is the 2.5% baseline but keeping up with inflation/ wage increases is a pretty basic expectation IMO.

This

under your gateway account

I’m get the full amount of £230 a week. A friend who se who doesn’t always pay her ni has £115 at the moment

Thats not my experience at all. State taxes, federal taxes, sales taxes. I definitely paid more

The US isn't as redistributive as the UK - although it does still have progressive (ie redistributive) taxation.

So if you are a low earner, in the UK you pay far less than your fair share of all the state services you benefit from. So you pay less tax than in the US.

In the US, higher earners will pay less tax to subsidise you, so their taxes are lower.

That's actually true of Norway too.

I also found funny that this poster mentioned 200K pot providing “comfortable retirement”.. yeah, sure, the mighty £800 a month.. why would anyone on this be in need of state pension indeed 😂

Jeez. I'm fucked 😅

It’s not too late. I would aim for 15% of your gross income into a global equities fund.
Have alook at vanguard - simple, low fees, good historical fund performance (I’d be looking for a historical 10% average return although this does not guarantee future growth of course)
Have you considered employment? The benefits and security usually outweigh self employment.

On top of the state pension and as one of a couple, it would take you up to what the Pensions Living Standards counts as a 'moderate retirement', which includes an annual holiday abroad, a car, and some spending and eating out.
https://www.retirementlivingstandards.org.uk/

It certainly wouldn't be enough to remove the need for a state pension: it's less than the £250k the state pension is worth!!! (it's not the magic 4%, since there's not the margin to make sure you don't run out)

I do sometimes think that people don't realise the high value of what they're given by the state - ie other tax payers.

And yes @Noelshighflyingturds I will have paid more lifetime tax than my lifetime cost to the state. Including the approximatly £250k value of my state pension, which I will absolutely not stand for having stolen from me. There may not be a signed social contract, but it's a balance which is very real in my head. As the state takes more, damn sure I'll change my life to give less. Which means less to subsidise others...

That 3rd 'lock' or guarantee of at least a 2.5% annual increase was added by the coalition government in 2010. It's supposed to reflect the increasing living standards that comes from a healthy, growing economy where GDP per person is rising.

Unfortunately, GDP per capita has flattlined since the 2008 global financial crisis. The 2.5% guarantee really should be removed, leaving just the previous double lock of inflation and average wage increases, and that should take the respective increase over eg 10 years into account so that you don't have extra increases die to the measures flipping.

All other state spending should also reflect the reality that there has been no per-capita growth since 2008. But that would mean eg cutting NHS spending by 20% £97 billion in 2008, which is equivalent to £160 billion after inflation versus £200 billion in 2025) .

No wonder people like me feel we're being completely screwed over for tax. Our shoulders definitely aren't broad enough to support a fairytale of GDP growth which doesn't actually exist.

I'm worried about this too. I'm 50, self employed, basically no pension pot. Dh has a pension pot, and because he's a higher rate tax payer (and I'm not) we're concentrating on shovelling as much as possible into his pension. We're effectively using a lump sum I inherited so he can increase his salary contributions by about £1000 a month. Tax-wise it makes sense but it leaves me feeling a bit vulnerable.

Depending on someone is scary @therapee but it does make sense to consider money as a family.

I remember my DM worrying in the same way after working part time to raise us, and my DF reassuring her. It's a bitter sweet memory because - 30 years later - my DM is now severely disabled and completely dependent on my DF, and he's a wonderful, committed carer. We put our future in our spouse's hands in so many ways, our pension is a tiny part of it. ❤

@Therapeejeepers that’s a risky strategy. Why do women do this. This is basically what my friend did then got shafted at 55 when he said he wanted a divorce!

My understanding is that I'm reasonably well protected in that eventuality - I'm entitled to half of all assets in a divorce, incl pensions.

Its not a given you'd receive 50% (you might get less or more).

Also, you won't necessarily be the beneficiary of the pension if your DH dies first.

Further, to be really cynical, unless you are reviewing his payslips or pension statements he could be claiming he is paying into a pension but actually the money is going elsewhere/being spent and there isnt actually a pension

Yeah, all of this.

It's absolutely not the case that it's always a neat 50/50 split