Pension worry…help.

[Pensionworry1]

I posted in AIBU accidentally, meant to post here.
NC’d for this…basically I was a sahm and had a late career change 5 years ago. I’m 40…My current pension is at 33k…projected at 240k. I’m aware this is not enough
now I do have a separate extremely small pension elsewhere and by that I mean about 1.5k per year once retired.
it’s also worth noting that I’m still at the lower end of my career ladder right now and have no intention on stopping here. My wage increases about 4.5%annually, my company pays 10% and I pay 5% (I can’t pay any more than this as I have a mortgage etc) I usually pay some of my bonus into my pension so I might put it all in going forward (usually about 8%)…is there anything else I can do? I suppose that’s it really isn’t it? Should I be worried? I feel like I should be 😩

Were your NI contributions being topped up when you were a SAHM? it’s worth checking to see if you are up to date and top up if not.

It doesn’t sound too bad at all. Put your plan in action and stop worrying!

Ok I will do this thank you.

I have just checked this. I am entitled to a full state pension as it is and if I keep going.

Average pension pot in the UK on retirement (at 67) is something like 120k, so you are expected to have double that.

Are you single, assume if having been a SAHM you have a partner, what is their pension situation as presumably you want to retire together.

No not single. I have a partner.

Each time you get a pay increase, you could consider increasing your pension contribution by 1% until you’re at the desired level.

A much mooted rule of thumb is to take the age you are when you begin contributing (35?) - divide it by 2 (17.5) and that’s the % contribution you need to have in totality. There’s so much more that goes into it, and so it’s not a hard & fast rule as such, but might help you to focus on a number.

and what is their pension like?

Much better than mine but I want to have mine in a good place too and not rely on them.

I’ll admit my first reaction was you’re catatrophising a bit - I’m mid 50s, about the same in my pension pot, single, private renting and will be til the day I die!
however I get that people get used to a certain lifestyle - I live very frugally so I know I will manage in retirement.
It all depends what your plans are and how you want your retirement to be.

Sounds like you are doing ok.
Just keep increasing your % contributions as you get pay rises / mortgage reductions and you could be comfortable. Your DB pension isn't that bad, it will be index linked too, every little top up to your SP helps.

@NC4thehaters I don’t agree. I think a lot of people leave it too late. The earlier you start, the more you can benefit from the compounding effect of investments. I joined my scheme age 19 & makes my stomach curl when I see how little some people have saved. A serious portion of my pot is the investment growth.

I don’t have a pension, I plan to be dead by then tbh!

Good for you but the OP is asking about her pension not your plans.

see you next Tuesday

you need to check what your invested in in your workplace pension. The default funds tend to be conservative. You need to review your options and make sure you’re in a diverse fund that’s 100% equities. There will be volatility but over 20+ years you’ll max growth. Closer to retirement you can review your progress and reduce risk if appropriate.

You're actually in a much better position than you might think! £33k at 40 means you're already well ahead of the average for women in their 40s (average for women aged 40-49: £19,591).

The big thing is you've recognised this needs attention at 40, not 55 - that gives you 25+ years for compound growth to work its magic, which is huge. The fact you're aware and thinking about this now puts you ahead of most people.

You have real options and plenty of time. If you can increase your contributions even modestly - say an extra £100-200/month - you could realistically target a £400k-£500k pot. Combined with the state pension, that would give you a comfortable retirement (depending on your expectations of course).

You've got this ❤