Bridging the gap before retirement

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Could anyone offer some pension/financial advice please?

I left a career in teaching some 10 years ago, and have been paying around 10% of my self-employed earnings into a government pension ever since. It does not compare with a teaching pension by a long way.

Like many other women, I compromised my earnings and pension contributions to raise a young family. I've got 5 - 10 years left to contribute to my pension pot. I'd like to ensure I can financially stand on my own two feet when I eventually retire.

Is there anyone here willing to share recommendations, expertise or top tips on anything I can do to bridge the gap please? I'm hoping I've not left it too late.

If you can afford it then get financial advice. If not, or not willing, then (I worked in payroll in a council):

• Lots of free advice and calculators online for retirement(Martin Lewis etc)
• Assuming you were in Teachers Pension (great scheme, especially before 2015 watering down of it)- check with TP themselves about your record, make sure it's all there with no errors (mistakes can be made)
• Get in touch with Councils /academies you worked at and chase them up if they need to submit more payroll data for you. Check payslips and HMRC for figures if you have them.
• You can pay to cover some TP gaps I think so maybe ask TP about that and get some cost predictions, it could be worth it.
• Make sure you have /will have 35 years of NI coverage by age of state pension age. Pay to cover gaps if needed. You may have credits from childcare when under 12 years possibly.
• I'm not sure what you mean by paying into a government pension? Like NEST or something. I presume will be a defined contribution scheme (cash input and investment performance scheme). Anyway, stick with that if you can afford it, and shop around for lower annual fees on personal pension if confident to do so. Check exit fees as well. Prioritise enhancing TP payments to cover gaps above this though. But cover NI state pension gaps before doing extra TP payments.
• For your personal pension, most people do income drawdown these days as can be better value than an annuity. So you draw money from cash pot and leave rest invested, means it doesn't last forever but tends to give you more per year than an annuity. Still a gamble and depends on life expectancy.
• You want as few costs as possible in retirement so maybe aim to pay off your mortgage if applicable, get solar panels/heat pump/good insulation etc for low bills if you can. Downsize your car to a cheaper one if applicable.
• I'm not a financial advisor but you can look further into the above points online.
• Good luck

First step check you state pension forecast to make sure you are on track for the full state pension - if not, there is an opportunity to fill gaps in previous years, but confirm which ones will be beneficial as not all necessarily are.
Check your State Pension forecast - GOV.UK

When you refer to 'bridging the gap', this is usually taken to mean when people want to retire at an earlier age than when they can claim their pension - the usual advice then is to start saving some money outside of your pension, usually in an ISA, and use that to live off until you can access your pension(s).

You need to check what the normal retirement age (NRA) for each pension is, the earliest you can take it and what penalties there are (if any) for taking it early. I'm guessing that your teachers pension is a Defined Benefit (DB) one which promises to pay a certain amount each month until death, whereas the 'government pension' is a defined contribution (DC) one where you are accumulating a pot that you can take money from at any point once you reach the minimum age (about to increase to 57).

You also talk about wanting to 'financially stand on your own two feet when you eventually retire', which suggests to me that perhaps at present you foresee a potential gap between income and expenditure when you give up work. If you see that as a issue, where you might run out of money to bridge the gap before you die, then the options would be looking at ways to make additional income in retirement (e.g. could you continue in your self-employment on a part time basis, take in a lodger etc ?) or to cut back on your expenditure.

It's helpful to sit down and make a list of your current expenditure and think about how this might change in retirement of you haven't already (e.g. would you want more or less holidays, will you still need to run a car ?) to get an idea of what sort of income you need to aim for.

Wow - such comprehensive advice.
Thanks so much.
I'll work through these options.

I wouldn’t invest in a heat pump if you want to save on bills - gas heating is far cheaper than electric presently. You would have a massive outlay and have to change all of your radiators and improve insulation to a very high standard.
As for finances it’s best you find an advisor - can you ask friends? Gather all your info and forecasts together alongside your budget.
I feel much better off since I’ve paid off my mortgage and have savings in an ISA.
Planning for what you’d like to do in the next chapter is a matter of personal preference - I can live on a small pension and still travel; your ambitions may be more costly.