I’m 58 and I have this much in my private pension

[elsaandanna]

I have £75,000. In a Nest Account
My chances of retiring early are not looking good.
I genuinely did not understand the principles of a private pension despite being self employed for 30 years.
These things should be taught in schools!
My mortgage is paid off and I have about £8k in a rainy day fund.

I wish I hadn’t looked now.

F

This is a really cool idea. OP you could offer online training and consulting for people who are curious about becoming childminders, and raise the next generation in your field. A good childminder is worth their weight in gold.

Another avenue would be posting advice videos on youtube or other platforms, although a lot of them aren't paying well anymore. Youtube in particular has just made it difficult to even get started with making money.

You’ve clearly got a good head on your shoulders. Running your own business is not for the faint hearted. I think the best weapon in your arsenal is the 9 years to retirement. I am the same age as you. 10 years ago when I got divorced I had £99k in pension and traded my entitlement to ex’s pension for equity (like many women wanting to keep a roof over my child’s head). I’ve been quite focussed on my pension since then and my pot has quadrupled.
I do think once I got to 55 and the money became accessible in theory it felt much more like savings with great tax benefits than something far off into the future.

There's a post ongoing about how cheap retirement is. Lots of people sharing views.

Agree with the previous poster about doing Rebel Finance School. I've not read the full thread but it would be helpful to know your income now and your expectations in retirement.

@PaperFlyingFucksMy income varies hugely as Im a childminder.

Many reason for this: children can leave at any point due to a changing circumstances, so while I’m full now it’s not guaranteed.
Also funding changed. The local council used to pay a set rate per child. Now the amount I’m paid decreases as the child gets older, so my income can halve and I’m still looking after the same child. Here is an example

Babies to 2 £10 ( before tax and expenses) per hour ( maximum number of hours 30 in term time. We are not allowed to charge a top up fee)
2/3 years £7
3 to school £5
Not many jobs can you get half pay after 2 years doing the same job!

It’s really hard to budget. Some months I have bigger expenses than others ( new equipment, toys etc ).
I have started to look for something else but I’ve been childminding for decades so I’m institutionalised and maybe unemployable ( I have a thread on this too)

It’s a bit woe is me written down but childminding was a good idea for many years.

My main aim is to stop working as soon as I can.

OP I think you need to stop for a
minute and actually congratulate yourself. You own your house outright, have a successful business, have started a pension - all without the support or instruction that many people have.
Could you get work at a local authority nursery to go employed or try and get some sort of civil service role? Or if remaining self employed is needed for your job stay where you are but plan to sell and downsize to a 1 bed when you retire as that’s when you will need the money?
To supplement your income could you do babysitting at the weekend? A bit less full on than childminding during the week? Even doing one weekend night per month could add a bit to your pension.

Can you employ an assistant and expand the business?

On the plus side your mortgage is paid off.
Could you work in the public sector for a bit ? We get quite a few end of career switchers who come into the public sector to really beef up their pension
It's also v good at supporting flexible retirement

If you have been a childminder there may well be Local Authority roles that are relevant
Or my niece works in a nursery but her employer is the NHS so she gets NhS pension

Or just start cutting your budget now and living on nearer to retirement income so you can bulk up your savings

Well no retiring early takes a lot of forward planning, it takes proactive education, not blaming the school system.

My mum is a similar age to you, she’s working class, but she paid into her pension. It doesn’t really take education, it takes a bit of forward looking and common sense. Heck even my MIL has a pension and she is the most chaotic person I know, she gives no thought to the next day, she doesn’t own her house, but she has a pension.

I just don’t think there’s any excuse for ignorance or pleading innocence, I’ve been working for 20 years and it was drummed into me by the media etc, you were still in your 30s 20 years ago. I can’t believe it’s only come up now.

I’m 52 and we have only really this year started to focus on our pensions. I worked part time self employed for years, but also had other part time jobs some of which had little pensions attached, I’ve recently consolidated them and currently have about 90k. Aiming to get over the 100k as fast as possible and we’ve planned that with contributions of £700 per month in the next ten years we should have grown it to around 300k if current rates continue. So feeling your pain, but all you can do is keep paying in as much as you can sto allow that compound interest to kick in and do its job. Second the suggestions to maybe find an employed role with good employer contributions.
I wish we had paid more attention a lot earlier!

I'm 62 and have less than you do in my pension pot OP but a bit more in savings. Desperate to retire early but can't afford to.

How much can you afford to invest monthly OP? Your £85k will continue to grow, on average tacker funds have grown 8-12% per annum average the lat 20 years. At 10% growth you fund will double every 7 years so your nest pension could be £170k even if you don't contribute more. Alternatively explore a civil service or local authority role their defined benefit pensions are a great safety net. Remember the best time to plant a tree was 20 years ago - the next best time is now.

You'll get tax relief on every pension, but keep the employer one because they also make contributions into it. Doesn't mean you can't move it at some point though.

Also start another one / SIPP if you have more money available.

Everyone should put £100 in premium bonds I think too.

Currently if you put £100 pm away & tax relief for the next 10 years, you would be able to draw circa 5k per annum.

As others have said, you can save more into both a pension & a S&S ISA. A permanent job in either childcare or something else would give you the employer contributions - it would also then allow you to rent a room out for up to 7.5k per annum tax free. Think what that could do for you?!

Not relevant to the op and no judgment but yes they do teach it at school. My child has a lesson a week at sixth form called skills and choices , it helps with ucas or Oxbridge applications, getting into work and finance skills.

Do you have a partner and do they have a pension pot? Collectively you might be ok.

If not, you could always semi-retire by continuing to do a few hours of something you love.

The Nest Higher Risk fund actually has pretty decent performance. You don’t need another pension. Pensions provide tax relief meaning you get a better return versus other form of investment when every £100 allocated only costs you £80 and less again if you are a higher rate tax payer. However also building up a Stocks & Shares ISA will be worthwhile to give some better accessibility options. AJ Bell and Vanguard have some “off the peg” investment options to save you doing too much research yourself. Putting £100 in Premium Bonds as suggested by another person is a waste of time imo. And you should try and also save up some money in cash or cash ISA - a few thousand to help cover unexpected emergencies.

I agree. DH and I started building it up quite late; we had other commitments; but all of a sudden 50s hit us and that is when we started worrying as retirement is approaching and energy levels aren’t the same to continue working until 67

Glad that you’re taking things in hand OP and that the thread has been largely supportive.

As a pp has said…… the next best time to plant a tree is now and I reckon that you’ll get to where you want to be.

All the best!