Worried I haven't got enough pension due to claiming UC

[Worriedaboutmypension]

Hi all,

After seeing a thread on here a few days ago about someone who was worried that she didn't have enough pension when she retired it made me look at mine.

I was shocked when I checked it that it was only worth 18k and this is definitely the full amount of the pension not the yearly value.

I've been with my company for 8 years and its the first time I've paid into a pension. I only work 4 mornings a week and claim some top-ups in UC.

I'm 41 and work for just over minimum wage so are unlikely to find much higher paid employment.

What can I do to increase my pension?

That’s the downside from claiming UC and not working full time. It impacts the future. I’d start by upping hours and then contributions

What were you doing in your 20's/30's if you've been with this company 8yrs? Could you have other pensions from earlier jobs?

It’s not the UC that’s the problem it’s the working part time

Is there a chance you could increase your hours to up your workplace pension contributions?
My pension allows me to make payments into it, is this something you could do. Even £50 a month will add up.
You have another 20 plus years to make contributions so don't panic.

You need to work more hours thus make more contributions, problem solved

Well the obvious thing would be to work full time, if your circumstances allow. Also, look into moving to a job with a scheme where both you and your employer contribute more.

Not sure why universal credit is relevant to the situation. If you can afford to, make regular AVCs and top it up, keep increasing it any time you can when your circumstances change.

I’m surprised you’re shocked OP- you only started paying into a pension 8 years ago age 33 and only work 4 mornings a week, where did you think a bigger pension pot would have come from?

The average person pays into a pension for 35-45 years and by 41 would be probably 20 years into that so if you compare with other 41 year olds yours will be smaller.

To increase your pension you need to be working more therefore paying in more and making overpayments.

Are you able to work more hours? I assume you have children? That is going to be the only way.

I have recently moved a couple of tiny pensions from the past into a new one that I have started to pay into additionally to my NHS pension (only started in the NHS 18 months ago and currently part time whilst son is small) Once I am able to I intend to work full time again to build ut up. I am a similar age to you and it’s starting to worry me also!

What were you expecting given tou only started 8 yrs ago paid in the minimum on pt minimum wages.

additionally....If you work PT on minimum wage it is never going to be amazing.

What can I do to increase my pension?

Honestly go FT and get a government job (maybe local council) the pensions are, as we saw on that thread ,excellent vs private sector.

Honestly being this far down the line there isn’t going to be much more even if you up your hours. When the time comes you’ll be penalised by pension credit for having a small amount of private pension and as there won’t be much in the pot as it doesn’t sound like you’re able to save £1000 which is what realistically needs to happen to catch up don’t worry because either way you’ll be living off the same amount of private pension as you will pension credit top up. It’s very hard for people on low incomes and I really don’t think this is Spoken about enough to the youth.

What does the HMRC website say about how much state pension you'll be entitled to? See https://www.gov.uk/check-state-pension

A full state pension gives you approximately the same income as working 18 hours a week at minimum wage. You should receive it if by the time you are 67 there have been e
35 full years where you were either:

• employed and earning enough to pay any NI contributions
• in receipt of child benefit
• in receipt of Universal Credit

As you are currently working part time at close to minimum wage your income may not change that much.

I was working in retail, there was no company pensions.

Isn't it just simply because your auto enrollment employee pension isn't very good and also you haven't worked that many hours?

I don't see how claiming UC or not would affect it?

I wouid look at your state pension forecast, and do whatever you can to get the full entitlement there - specifically making sure you get NI credits which need you to earn more than £125 a week from a single employer (if you have kids under 12y, you will get the credits from child benifit even earning less).

Im guessing your current earnings aren't actually going to be much higher than your current earnings, so you might actually not see a nassive drop in income come retirement.

Other orople have mentioned increasing contributions through more hours or higher hourly wages.

I'm saying UC effected it as if I was working full time I would of contributed more to my pension. Both myself and my employer.

You have 25 working years left so plenty of time to completely change this situation. It's good news you have twigged now rather than in 20 years time.
The only thing you can do is put more money in. That could be via all or a combination of working more hours, contributing a higher % of your current wage, finding a better paid job and putting more in, finding a job where your employer puts more in, even better still if it is a public sector job with a DB pension.

Good luck!

Your decision to work PT is what affected it, the UC claim has no relevance as nothing would be any different with or without it.

It's your choice to work PT that's what has affected it, not receiving UC.

But perhaps the availability of UC might have affected your choice to work PT so UC may have indirectly adversely impacted your level of pension contribution.

At the moment I earn just over 1k a month take home and UC is 2.5k a month.
If I up my hours to full time I will take home 2k a month but will be worse off overall as my benefits will reduce.

If you google it, there are pension calculators which will forecast your future retirement pension based on what you currently have in your pot and what you currently earn. They'll account for your pot growing with interest, your future contributions (assuming your salary remains the same but increases for inflation), and add on your state pension.

Look at one of those before you panic.

But if the value it predicts doesn't look sufficient/sustainable then really the only way to increase it is to put more in the pot now and keep putting more in the pot for the future. Whether you do that by increased contributions, working more hrs etc is up to you.

I am the same age as you OP and I worry that state pension will be partially or fully phased out by the time we retire. (Maybe it's pessimistic but?!) .. So if I'm honest, I'm assuming I won't get one - and if I do it'll be a bonus.

My understanding was that on UC you would always be better off working/ earning more.

A personal pension is just to supplement thecstate pension though, because for most people who have got used to the income they get from full time work paid at significantly more than minimum wage, they can't inagine being able to survive on the amount that the state pension is. We all get used to what we consider a "normal" income. If you are getting by at the moment on minimum wage for 4 mornings a week, your normal income is close to the state pension amount, so you don't really need a significant separate pension if you can manage like that. Your current 18k pot will be bigger by the time you retire and will give you a little top-up - how much topup does UC give you excluding any elements you get specifically for having DC (which obviously you won't have by the time you are 67)

Sorry, can you explain how UC is 2.5k pm?

I’m really struggling to understand how you have a monthly income of 3.5k pm working four mornings pw?!