What will happen to those of us who can’t afford to pay in to a pension?

[whatnooow]

I’m starting to get a bit worried about how we are supposed to support ourselves as we get older as we basically live hand to mouth each month.

My DH and I are minimum wage workers and had to come out of the company pension contributions about 7 years ago to be able to get by, day to day. we’re both early 40s and are both knackered already. Another 30 years will definitely kill us off!

Will we just have to work until we drop dead? What if we can’t work due to ill health, but not actually disabled? Luckily we will have paid the mortgage off in about 20 years, but how will we survive, pay bills, buy food etc?

Neither of us will receive any inheritance. Time feels like it’s speeding up and I’m very worried.

I thought this too

It wasn't Labour who busted BTL, it was the Tories. Landlords have been selling up for years.

As others have said if you are part of a couple and have your mortgage paid off then you'll have 2k a month to live of which is perfectly do-able. Any private pension you can save into will be a bonus.
It is the single women who for whatever reason don't have a full pension or private pensions who struggle but there is pension credit to top it up.
I work in benefits advice for older people and the vast majority are managing ok really as long as they access the benefits available to them.

What do you mean by pension credits please? Is that if youve not paid in enough to get the staye pension?

https://www.gov.uk/pension-credit

I doubt pensions will exist my the time you come to retire. , jobs will also be scarce so we will all be on universal income

I know it's hard @whatnooow but you have to contribute to your workplace pension. I've been where you are and that extra money would have really helped day to day (eg some days I couldn't afford bus fare to actually get to work). I didn't stop and my balances are now really good. I have increased my income, which certainly helps, but those earlier contributions compound and can turn into a decent balance over time. It's never too late to start.

Is there a minimum amount to pay into your pension to make it worthwhile?
I'm looking at this now and wonder what I should pay in..

Do you mean your state pension? If so, yes.

To get the minimum state pension you will need 10 full qualifying years of national insurance contributions. The average needed for full state pension is around 35 years of National Insurance contributions. Some people need slightly more and some need slightly less. It all depends on when you were born etc.

You can check your contributions on your online tax account or you can call the future pension centre at DWP and get a free pension statement.

If you have any gaps in your NI contributions, there are options to top it up with voluntary payments.

I did it through work. The AVCs are with the Prudential. To be honest, I hadn't really thought about it but a few years ago my workplace put on a session about planning for retirement. I went along because I was very conscious that I hadn't paid into a pension for several years and so had a gap in my work pension.

The talk covered AVCs and how thet worked, so I set up an AVC plan. I started off paying in a very small monthly amount but I've increased that over the years. When we paid off out mortgage last year I switched the payments to my AVC so I didn't notice the difference.

Apologies I meant my workplace pension

What does your workplace pay in, for example mine doubled what I paid in up to 10% so the best value for me and to get the most out of the my workplace was for me to put in 5% to get the max 10% the company paid in, I also found this still affordable.

You’ve had some good advice here about ensuring that you get the maximum state pension.

You should definitely find a way to go back to paying into your employer pension, because otherwise you aren’t getting all of the money from work that you’re entitled to.

As an example, you pay in £100 in a month. That actually only reduces the money you take home by £80 because it’s deducted before tax. But your employer also has to pay in £100 too. So you get £200 in your pension for a cost to you of £80. Plus you get interest on the money so, that £200 might be £400 by the time you retire.

Lots of people on here are really good at helping with how to progress at work. It might be worth posting what you do, and see if anyone can suggest a way to move sideways or up a bit to get a bit more than minimum wage which would make a huge difference.

Also, do you have kids? If so once they leave home you’ll be in a good position to save hard. So you want to aim to continue working for at least a good few years after they leave.

That’s another worry, for those who want or need to work, albeit part time maybe after 60ish, what kind of jobs will be available to us in 20-30 years?

Anyway, I’m going for a long walk this morning and making some short term plans. If anyone has any career advice, I’m all ears 😂

Im a cleaner atm, and it’s getting harder every day, physically.

Apply for an entry level job in the public sector. You write very well and clearly could do admin or similar.

Then there's lots of scope to be trained and progress.

There are free online courses in team leadership etc you could do one of those and start looking for ,team leader cleaning roles

I know people who have progressed from cleaner to facilities manager of a large organisation on v decent pay

No that’s not actually true. If your pension is going to be tiny, it’s best not to. Because pension credit opens you up to a raft of other benefits which outweigh it.

Thanks @Fruitcakewithcheese

when you say public sector, do you mean like the civil service? Sorry, I’m not up on the corporate jargon!

Yes but also local government..
Honestly I have seen so many people climb the career ladder from entry level . And you get good pensions and sick pay too

Are you self employed or employed? could you start your own cleaning business?
if you’re self employed could you look at getting an evening or Saturday employed cleaning job in an office, supermarket or other establishment to top up salary?
other ideas, Lidl and Aldi both pay above minimum wage and have management opportunities for higher salaries, as does McDonalds.

Full time at Aldi (40 hours) for example would be £27k starting salary, both of you on that is £54k a year with promotion and salary rise opportunities.

You can't get a balanced view on here. People just can't vision that some people just can't 'progress' or even wants to be a manager of something. Some people will do what they've always done when it comes to work because that's the hand they've been dealt.

Get back into your employer pensions scheme I think OP, you'll get used to not having the money and buckle up.

I'm doing a job at the moment without qualifications or experience after doing the same job for 26yrs and I'm now on over £45k, I am 47, with a 3&8yr old, but I got the opportunity as I spend time doing lots of free learning and online stuff, it takes dedication to put the effort in, my husband went from minimum wage 9yrs ago to a low level Local Authority job and has progressed and is now hitting £60k, he has gained a degree Health and Safety qualification through work.....work both work hard all the time

You've really got to bother rejoin the work pension scheme from April when the NMW increases. If you dont you will live in poverty when you are old.

Can we stop with the bashing of people on minimum wage?
I earn minimum wage. It is not due to lack of ambition or aspiration. My DS has autism and is unable to care for himself. His twat of a father will not do anything for him, and my partner died. I am unable to work anything outside of school hours, and have to be able to check on my son at minimum every 2hours, and leave work whenever necessary.
I am therefore stuck in my low paid, but very local, and understanding (which has been well earned, I promise) job. I am lucky enough to have savings and to be able to pay into my pension, but not everyone has the ability to do these things.

My God!

Do you really believe that crap? its thanks to Labour we have a state pension.... or an NHS or even universal education.

No party, none whatsoever, will get rid of the state pension.