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Original poster

Pensions....am I the only one not to have on

16 replies

happydays · 07/03/2003 15:27

I know we should have one both dh and myself early 30's, do not have a pension, work or otherwise. Am I alone?, Also what one is best and how much do you suggest we pay into it each month, although we are not struggling, we do not have masses to spare.

OP posts:

EmmaTMG · 07/03/2003 16:50

DH has a pension through work but I've got nothing apart from the bits I contributed while working which will probabaly amount to about £50 per month when I eventually retire.
I know a few people who don't have one and have put money into property so when the kids leave home and they can sell up and buy a smaller place and so live off whats left, which once I start working again is probably what we'll do, any money I earn will pay the extra on a mortage for a bigger house so when the kiddies fly the nest all my 'pension' money will be in the house.

mam · 07/03/2003 16:51

I only have one which is probably pathetic my dh has two which he has paid a lot (IMO) into and the way the financial world is at the moment they are going to be worthless if it continues much longer! So who can tell unless you are a multi-millionaire I reckon it only gets the rich richer - better end now! Sorry happydays I'm the last person who should reply as you can see! Hope someone pension-wisely replies as I'd like an answer to this question too!!

Cityfreak · 07/03/2003 17:11

happydays, I don't have a pension and never had as I am self-employed and there is no spare cash at the moment. I have spent time worrying about this, but having seen the way the stock market is going, I am thanking my stars that I never bothered with it. Instead, I have "invested" in having a ds, paying for his welfare and education so one day he will support himself and hopefully earn a good wage, and whom I know will not watch his mummy starve when she is an old crone. I have also been working like a dog and scrimping to pay my mortgage, which is another type of investment. You have to look at your life overall, eg your earning and saving potential in the future, other ways that you can invest for old age, and the fact that you are not going to be in the position of some childless spinster with no living relative to help her out when you are old. I think that a lot of us are in the position that even if we scrimp and save and struggle to take out pensions, we would not be able to pay in enough, so by the time we are old, allowing for inflation and the probability that the health service will have been privatized, our pension fund would be comparatively useless. However, I do know that my professional income is likely to increase in the future, so I expect to be able to save and invest later. Are you working? Do you think you will be able to earn more in the future? Do you know how your outgoings are going to change in the future, ie will you have an opportunity to save and invest later? I get really annoyed that there is very little financial advice out there aimed at women. Salesmen ring me up at work all the time offering pension plans, life assurance, critical illness cover and so on, and whenever I ask what would happen if I had a maternity break, they have got no policy that would cater for it. Time and again, I say, "So, this policy is going to be a bad deal for me. I would be better of saving in the bank or in bonds, wouldn't I really?" and they have to say yes.

Jzee · 07/03/2003 17:27

Nope your certainly not alone. DH now has 4 frozen pensions which he obtained through various permanent employers-. We've decided that now he is self-employed and also given the economic climate we are better off not having pensions have opted to invest into property. We know we won't be able to afford a high standard of living in the uk when we retire so we are off to Spain and shall rent our our uk property as an income.

breeze · 07/03/2003 17:32

If you have a mortgage, you could do one of those things (sorry do not know name), where they buy the house from you and let you live in it till you die, and give you a monthly income. (ok as long as its not richard hillman).

rosehip · 07/03/2003 17:40

Agree with Jzee. Have now frozen my pension, husband doing the same from April and we are going to pay extra off our mortgage. I hear pensions are a bit of a dinasour.

Alibubbles · 08/03/2003 10:15

We've stopped making any payments into our pensions too. We have bought two flats over the last two years, One has gone up from £90,000 to £170,000 and the other from £125,000 to £180,000 in a year!

We have just been to look at another this morning and put in an offer. Both are rented out for twice the mortgage and the new one will bring in a net income of £500 a month after the mortgage and letting agent fees.

They are totally self funding, it's easy to get a mortgage with The Mortgage business and as you don' t have anything to sell, you can often get a good reduction in price - kie today, the flat is £215K and they will accept £205K, completion in four weeks.

Tenants lined up for beginning of June!

fallala · 08/03/2003 23:59

Alibubbles do you mind me asking in what part of the country you bought your flats? Old or new? Where did you get the motrtgage from and is it a special type of buy to let mortgage?
Do you have any worries about the housing market collapsing?
Thanks. I have been thinking about doing this for some time.

bossykate · 09/03/2003 07:33

buy to let was discussed previously here

we decided not go ahead with this in the end. having done a pro-forma yield calculation, numbers did not work out for us. i recommend anyone thinking about this do the same thing - these investments are not automatically self-funding, it depends on what has happened to house prices and rents in the area you want to buy, together with how much you would need to borrow to finance it.

also, pensions are still a very tax efficient form of saving, why not see a financial adviser before stopping contributing? you can find an IFA in your area who will give you an introductory free session at IFA Promotion .

bossykate · 09/03/2003 07:35

this is a good place to start if you are thinking about buy to let Association of Residential Letting Agents

fallala · 09/03/2003 20:35

brilliant thanks bk

Alibubbles · 09/03/2003 21:02

fallala, we bought new, buy to let mortages and we are in St Albans. Flat prices seem to be more than London, (judging by thge Sunday Times today)

We have lost so much money over the last 18 months on our investments thsi is the best way for us to be sure of a future.

The next two falts or house will be purchased wherever DD and Ds go to Uni next year and the year after. DD wants to French in Paris or law at Nottingham!

fallala · 09/03/2003 22:52

thanks Alibubbles. I have been thinking about this for some time but not looked into it seriously. My ISAs are worth about a third of what I put into them. My father's pension fund is worth half what it was two or three years ago. I am not loaded which is why I want to be really careful what I do with any money I can save.

Two questions if you don't mind.Are you at all worried about a big crash in the property market as happened ten(?) or so years ago so that the value of your flats will plummet below the price you paid ?
Second, it all sounds so simple why isn't everyone doing it??
Are there any obvious pitfalls?
Okay that's three questions, sorry!

Jzee · 10/03/2003 12:46

On a related subject: Does anyone know how I should go about opting back into serps ( state pension).I'm reluctant to contact my accountant over this as no doubt they will try and sell me another type of private policy.

StuartC · 13/03/2003 21:01

Hi Jzee - You can't join Serps for an additional pension. The new scheme (since March 2002) is the State Second Pension (S2P).
You can get info from here

There is a theory that women should consider joining it after age 49.

If you go to a search engine and enter "serps" and "contracting in" (use the quotes) you'll get loads of leads and advice.

Bozza · 13/03/2003 21:37

As long as Alibubbles isn't going to need to realise the capital from her flats in the next few years a housing crash shouldn't affect her. House prices here are much more than they were before the crash - ie they have crashed and recovered and then some. Thats just my logic btw - I'm no expert.

Wish I had that kind of income/investing capability but it is not so. DH has a money purchase pension which he and his employer contribute to (I think he puts in 6 % of salary). I have a final salary scheme pension (5% contributions) so if I work for 40 years I should get 40/60 of my final salary. But every year I work 3 days a week only counts as 3/5 year so I will be about 90 by the time I get to 40/60! Also because final salary schemes are good but costing companies a lot due to stock market losses it has been closed to new entrants. So I think I will be lucky if it is still in its same form by the time I get to 60 or 80 or whatever.

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