Advice for someone with no pension.

Mmm, yes. We need to know. Does it start with a 1 or a 2 ?

Only a 1 but it is the context of being a pretty easy, low stress job with very normal hours. To give that up and the money that goes with it would be a big choice, especially if I don’t mind doing it and still have time to do a lot of what I want to do. I could go down to 4 days a week and it would still start with a 1 so for me that would be the choice I will be taking some time soon.
My pension pot is pretty good but if I retired now and live to say 85 (cycling lifelong vegetarian so should live forever statistically) that is 30 years so it will need to be.

So, less than £20k.
Or >£125k which is what you’re clearly suggesting.
If the latter, you could help STW by becoming a paying subscriber; the cost would be less than small change to you.

HALF your age. HALF. So start at 20y, 10% for life. 30y = 15%.

It doesn’t work though, because if you start at 60 you’ll not have much in a pension pot by the age of 67 even if you’re putting 30% of your salary in. It’s a good thing to think about based on zero info about the person, their situation, their salary growth etc

If the latter, you could help STW by becoming a paying subscriber; the cost would be less than small change to you.

Were you a chugger in a previous life?

Regardless of income it’s absolutely nobody else’s business what they choose to spend their money on or not.

If the latter, you could help STW by becoming a paying subscriber;

No thanks, I only use the forum. Used to buy the magazine back in mid 2000’s when single speeding was big and it was a lovely magazine for me at the time but the forum is certainly not worth paying for as I can argue the toss with other people for free…

People recommending Vanquish. Are they noticeably better/ easier than other companies?

There’s no place for smart-arse arseholes like Kerley here surely? Absolutely no need for that sort of person. I hope you are happy in yourself Kerley, you certainly aren’t making other people smile.

wow

People recommending Vanquish. Are they noticeably better/ easier than other companies?

vanguard. low cost in terms of fees. if you’re not too savvy (i am not) then a lifestrategy investment with them gives broad exposure to the markets without you having to screw around at minimal cost. if you need a home for some money in an ISA and acn average over a decent time period (years) which ‘should’ work out to 5% growth over that time they’re a go to IMV.

The best time to start a pension was whenever you started working. The 2nd best time is now*.

Understandably there’s a lot of people in a tough spot but hoping you’ll die before it becomes a problem is a hopeful strategy. I think at the moment the average life expectancy in retirement is 20+ years and the vast majority of us will reach retirement age, with a fairly decent chance that a sizable minority of us will live to 100.

*Caveats being you earn enough to benefit from 20 or 40% tax benefit and an employer contribution, and don’t have any immediate financial crises to deal with

To give that up and the money that goes with it would be a big choice,

Yep, thoughts and prayers mate 🤨

Johndoh – that is a bit harsh

There’s no place for smart-arse arseholes like Kerley here surely? Absolutely no need for that sort of person. I hope you are happy in yourself Kerley, you certainly aren’t making other people smile.

made me smile!

t
Johndoh – that is a bit harsh

in the context of this thread, nope, not at all. He comes across as a very horrible person and it’s not nice.

Because his personal situation may be seen as enviable? Yes he might be a bit brash with it, but unless I’ve missed something (and I’m willing to be shown where if I have), I’m not sure that warrants calling him a very horrible person.

I’m happy to be proven wrong though!

The clear emphasis on VERY feels completely at odds to the question the OP raised. Apologises if I am misreading, but it feels, to me, very much like they are bragging about their comfortable situation when others are, quite rightly, very concerned about their financial situation going into retirement.

Not bragging about anything. One of the things that comes with my autism is that I am VERY honest and not very sensitive/don’t have empathy in the right situation. Those who know me realise that, those that don’t can be put out by it.
Benefits come with it, such as being very analytical and very objective which helps in my job for example – which pays okay (is that better?).

Still, being called a horrible arsehole because of the way I am is not unusual. Everyone pretends to care about neurodiversity until when they don’t.

I may not be as nice as you but then you don’t seem that nice to be honest – I am always honest 🙂

Its not because of the way you are, its because of the way that post sounded.  It sounded very ” I’m allright Jack, sod you”

However I have read enough of your posts to realise that is not what you meant.

Its back to missed nuance in text based conversations

Thanks, yes it is and no I am very much not an I’m alright jack person. I was particularly discussing the retirement discussion around what people do, age of retirement etc,. without thinking back about the start of the post around having no pension.

Luckily I don’t care about how people perceive me, I got over that 20 years ago although before that it was a bit of a struggle at school, early jobs, social activities etc,.

Everyone pretends to care about neurodiversity until when they don’t.

My response to your post was nothing to do with caring (or not) about people with neurodiversity, it was about how you came across in the post. As it happens, I am a foster carer for a child with complex needs, one of which is suspected autism, so in this case I do care.

Well people come across differently based on things such as autism.  Admittedly not easy to pick up on a forum but you need to be prepared to sometimes give people the benefit of the doubt and not just label some as a horrible arsehole who should not be allowed on a forum.

Just think about how that may feel to some people…

“It doesn’t work though, because if you start at 60 you’ll not have much in a pension pot by the age of 67 even if you’re putting 30% of your salary in. It’s a good thing to think about based on zero info about the person, their situation, their salary growth etc”

If you’ve not got a pension by 60 you’re bollox’d IMO anyway really, and will be relying pretty much 100% on the State (or inheritances and/or selling assets) to get through retirement.

The “half your age as a percentage” is good advice on the whole for folk who want an equivalent lifestyle in retirement to the one they had while working.

Just think about how that may feel to some people…

I felt I covered that in an earlier post when I said ‘Apologises if I am misreading’.

It’s worth pointing out that you should maximise your state pension if you can. You now need 35 years contributions by the time you retire (just hit mine at 56 and retire at 67). Current state pension is £10,600 per annum and subject to the triple lock. For valuation purposes that’s a fund of 20x annual or £212,000. Annuities are higher than that, so you would need a fund probably 30x or about £318,000. Now why you should max out your state pension…

Each year contributes 1/35 or £302.85, and you can buy a year for about £850. Assuming you live three years beyond retirement age, it’s neutral. You won’t get the tax allowance on contributions at your marginal rate, but this is a very good deal. And the closing dates have been extended.

Half your age is a good starting point for long-term contributions. I have tried to maintain that at considerable cost (new cars, holidays, etc…). But with nothing at 60, I’d be looking at state pension maximisation (you may already), then as much as you can afford for maximal tax relief for a few years. You’ll likely be able to get back 25% of it tax free completely, and the rest will be under the tax threshold. That and a part-time barista job in a small independent cafe to meet people 😉

IANAFA but ” I have a considerably larger pension pot that yew” comments aren’t helpful.

growing really old looks a bit shit

until you consider the alternative.

My younger brother died at 36 from bowel cancer – i’m good with growing old, even if it is a bit shit.

I was genuinely surprised to find out that I’ll hit mine at 51 – the minimum age possible.  It never occurred to me that I’d been paying enough NI to qualify for all those years, but thinking back, even as a student I was never unemployed, I’ve always had a full time job from 16 and even when at uni, I was part time for 6 months and full time for 5 months.

Definitely worth checking what TiRed said above and what others have said about tracing pension pots.  I believe it was  2008 when the workplace pension law came into effect?

49 here and paying the minimum workplace pension requirements. I won’t be able to increase anything untill kids are through uni which will make me c.53/4 when I start piling money into pension and ISA. I’ll also be starting to fund their pensions on a small scale, because young people don’t think about that stuff and time is a very good thing for pension growth.

In a situation like this, I’d be looking very carefully at the time/tax/borrowing scenario and possibly look to start early.  You biggest lever in pensions is the ability to salary sacrifice, but you can only do that to a point.  So slamming huge sums in to it in 4 years might cost you more than paying a less later and more now, even if you have to zero percent card that debt for a few years.  Also – don’t forget the compound rates, at these rates, putting 20% away every month at a 40% rate will only cost you 12% and you’ll get up to 6% compound interest on everything you can put away in that 4 year period – finance the rest on a zero percent card for the 4 years.

At the end of that period, continue paying the 20% and use the extra you would’ve slammed away to clear the debt.

Flip it around and say you’re now putting in 40%, most of that would only be covered at the 20% rate (for most wage earners) an so your tax saving might be as little as 25% rather than the 40% you would’ve achieved.  Say you were putting £1000 a month – that costs you £600 a month in the first scenario, but at the end of 8 years it’s worth ~£120k and you’ve paid £56k.  In the second scenario you have ~£105k, but it cost you £72k.  You’ve essentially made £30k! in 8 years.  All you have to do is juggle cards and payments for the 8 years and likely pay some balance transfer fees at around 3%.  Make the finance sector work for you!

choppersquad – two recent posts strike me as being (potentially) very relevant to you:

– auto enrolment was introduced in 2012 making it compulsory for employers without a company pension scheme to enrol all employees. Your employer had/has a company scheme which you were in but then stopped making contributions; in that circumstance would your employer have been required to auto enrol you into NEST or similar?
It’s worth getting absolute clarity around that.
– TiRed’s post regarding ensuring you have no gaps in your NI contribution history.

I think it was konagirl who suggested a spreadsheet to record/calculate disposable income which would then enable you to make an informed decision about how much you can afford to save/safely invest – if that’s your objective; would definitely endorse that advice.

Is your ‘frozen’ pension defined contribution or benefit?
Can your employer provide a forecast (best guess, really) of it’s value when you reach 60 or 65?
I would suggest you get a transfer value from your employer as this will give you a basis for deciding what to do next – leave where it is or investigate putting it into a SIPP.

JFC, ive just checked my NI contributions and ive already been working (enough for full years) for 29 years.

What happens when you get the required qualifying years, do I get a carriage clock?

Oh no hang on, ive seen one number of needing 30 years and another saying 35 years. Looks like 35 years as thats for the full state pension and not some sort of proportion if less than that is contributed.

That “number of years thing” is a bit of a red herring as it can be affected by any private pension scheme you’re been part of during your working life.

without thinking back about the start of the post

Everything else aside, this single statement qualifies you to be in this forum.

How so Jolsa?

Daffy – been thinking about something like that for exactly the reasons stated.

I went and had a look at my NI record (state pension forecast) as i thought it was 30 years, not 35 years.

As of today, with 29 qualifying years, I am forecast to get £199.23 per week (maximum is £203.85 per week)

So another 6 years contributions will net me £4 odd per week

However the landscape could change before I get there…….

But you don’t stop paying NI when you reach 35 years though – you continue to contribute until you stop working (you can work past your retirement age and your pension actually goes up a bit).

How so Jolsa?

Tongue in cheek comment regarding the amount of thread drift

thought I’d posted this, but the forum must have done its thing again….

State pension – I believe when you are in higher education, those years count don’t they?  Mine are down as no contribution.  Was there something I was supposed to know about as an 18 year old that would have meant they had counted, or should it have happened automatically through the fact I went to a uk uni?  Any way of getting those years reinstated?

scotroutes – your recent post is not my understanding; can you explain?

I believe Scotroutes is talking about being ‘Contracted Out’

https://www.gov.uk/contracted-out/new-state-pension

Check if you were contracted out

If you were employed before April 2016, you were probably contracted out at some point. Almost all public sector workers were contracted out – for example, NHS workers, council workers and teachers.
If you’re under State Pension age

Check your State Pension forecast. If you were contracted out, your forecast will include a ‘Contracted-Out Pension Equivalent’ estimate.

@DT78
Student National Insurance contributions (NICs)

You don’t start paying National Insurance until you’re over 16-years-old. Students who are older than this are not exempt; if they earn enough, they pay like any other worker.

If students don’t do paid work, they’re not credited with NICs for the years they are studying.

This creates a gap in their contributions record, although most will still work for enough years after qualifying to merit a full state pension.

Which would explain why only half my Uni years contribute – i took summer jobs during those years.

– auto enrolment was introduced in 2012 making it compulsory for employers without a company pension scheme to enrol all employees. Your employer had/has a company scheme which you were in but then stopped making contributions; in that circumstance would your employer have been required to auto enrol you into NEST or similar?

My understanding is that employers were required to provide pensions, so long as the employee agreed to contribute, and employees could still “opt out”.  It is easy to hear of those who did opt out and roll our eyes as that is clearly not the best long-term financial decision, but some people were (and definitely now are) so cash strapped that those few % of earnings were worth keeping to themselves to put food on the table rather than have their employer chuck more on top and then the government add more again.  I think some also opted out because they didn’t trust their employer / pension provider / government etc.  That may have been well-founded but in most cases was probably misplaced – but I’ve had conversations with 20-somethings about pensions, life insurance etc as part of benefits discussions and its difficult to get them to perceived the value in these things.

Tongue in cheek comment regarding the amount of thread drift

Went straight over my head. 😁