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With little chance of retiring, should I bother with a pension?

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ttaaffeedd
ttaaffeedd Posts: 3 Newbie
in Pensions, annuities & retirement planning
I am 34 and auto-enrolled in a pension scheme where I pay 4% per month and my employer pays in 9%. I was happy with this plan until I started reading about the unlikelihood of someone my age ever actually retiring. So should I continue with the pension pot? I am not a home owner but the few pounds per month going into my pension won't enable me to suddenly be able to afford a property. What happens to the pension if I continue paying into it and never get to retire?

Thanks for any answers as it is all rather confusing (and demoralising).
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  • mjdh1957
    mjdh1957 Posts: 657 Forumite
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    I didn't think I'd retire but now I have. I'm 58 and won't get the state pension till I'm 66 but now receive a widower's pension from my late partner's pension fund. Your situation might change as you get older. Pensions are a tax advantageous way to invest in your future, and you get free money from your employer.
    Retired in 2015.
    Moved to Ireland September 2017
  • worried_jim
    worried_jim Posts: 11,631 Forumite
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    You would be mental to stop! You'll notice all the people saying that you'll never get to retire etc etc are the ones with out a pension. Afters 22 years of pension saving (I'm 42) and compound interest I can tell you that they are brilliant! I pay a similar amount to you and am already choosing the colour of the Porsche I am buying at 55. Plus your company is paying 9% for you- free money!
  • xylophone
    xylophone Posts: 44,660 Forumite
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    Opting out of your pension scheme is, in effect, taking a salary cut.

    If you have no private pension savings at all, so that you are entirely reliant on the state pension at state pension age, then this really could mean that you are in harness until you are 70+!

    Having a private /occupational pension gives you the option of being able to draw it before state pension age, so that you can retire or semi retire before that age.

    You do not say whether or not you are married - if so, your pension can benefit your widow.
  • molerat
    molerat Posts: 32,073 Forumite
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    There is a big difference between retiring and getting a state pension. Make your own decisions and investments and you will be able to retire whenever you want
  • dunstonh
    dunstonh Posts: 116,716 Forumite
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    I am 34 and auto-enrolled in a pension scheme where I pay 4% per month and my employer pays in 9%

    Nice lot of free money from the employer there.
    . I was happy with this plan until I started reading about the unlikelihood of someone my age ever actually retiring.

    Change your reading habits then.
    So should I continue with the pension pot?

    Do you like free money or not?
    What happens to the pension if I continue paying into it and never get to retire?

    The money is yours to do with as you wish when you get to 55+. Do not mix up state pension age with retirement.
    Thanks for any answers as it is all rather confusing (and demoralising).

    If you pay a sensible amount towards your retirement then you will be fine. Stop reading rubbish that says otherwise.
    I am an Independent Financial Adviser (IFA). The comments I make are just my opinion and are for discussion purposes only. They are not financial advice and you should not treat them as such. If you feel an area discussed may be relevant to you, then please seek advice from an Independent Financial Adviser local to you.
  • enthusiasticsaver
    enthusiasticsaver Posts: 15,719 Ambassador
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    Yes of course you should pay into a pension. It is free money both in terms of tax relief and employers contribution. My OH is 58 this year and retiring at end of October by virtue of the fact we started paying into his pension when he started with his present employer 33 years ago. Even I have a LG pension in spite of a career break to have children and a significant portion of my working life has been part time. I have compensated for that by paying additional contributions and building up my savings and investments. I also intend to retire in 2 years time when I am 58 and will bridge the gap between 58 and 60 with my savings and my OHs lump sum from his pension. All the people saying they will be working until they drop are probably the ones without any pension provision. Total idiocy.
    I’m a Forum Ambassador and I support the Forum Team on the Debt free Wannabe, Budgeting and Banking and Savings and Investment boards. If you need any help on these boards, do let me know. Please note that Ambassadors are not moderators. Any posts you spot in breach of the Forum Rules should be reported via the report button, or by emailing forumteam@moneysavingexpert.com. All views are my own and not the official line of MoneySavingExpert.
  • xylophone
    xylophone Posts: 44,660 Forumite
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    58 and 60

    Your LG pension is payable without actuarial reduction at age 60?

    Have you obtained a new state pension statement?
  • uk1
    uk1 Posts: 1,839 Forumite
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    ttaaffeedd wrote: »
    I am 34 and auto-enrolled in a pension scheme where I pay 4% per month and my employer pays in 9%. I was happy with this plan until I started reading about the unlikelihood of someone my age ever actually retiring. So should I continue with the pension pot? I am not a home owner but the few pounds per month going into my pension won't enable me to suddenly be able to afford a property. What happens to the pension if I continue paying into it and never get to retire?

    Thanks for any answers as it is all rather confusing (and demoralising).

    I believe you should continue with your pension for two reasons.

    Firstly, the concept of "retiring" I think is evolving and may look different when you retire. It may be part time work, and your pot will give you extra options instead of those forced on you by comparative poverty.

    Secondly it makes no sense to forgo that employers cash. At your age it will make a difference later I promise.

    Don't be despondent, but preserve your options.

    :)

    Jeff
  • enthusiasticsaver
    enthusiasticsaver Posts: 15,719 Ambassador
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    xylophone wrote: »
    Your LG pension is payable without actuarial reduction at age 60?

    Have you obtained a new state pension statement?

    No, it is reduced from 65 actuarily and if at 60 we still have sufficient income from savings, OHs lump sum and pension and another GMP pension I have which kicks in at 60 then I will hold off drawing it until 65. I know how much it will be reduced by at 60 though and am willing to accept the reduction for the additional 5 years of claiming it. I am hoping for redundancy though in 2018 when the funding for my job ceases. If that goes ahead my pension will be paid at 58 without actuarial reduction if the redundancy package is similar to previous ones.

    Yes I have a state pension forecast of £155 per week from 2026 when I am 66.
    I’m a Forum Ambassador and I support the Forum Team on the Debt free Wannabe, Budgeting and Banking and Savings and Investment boards. If you need any help on these boards, do let me know. Please note that Ambassadors are not moderators. Any posts you spot in breach of the Forum Rules should be reported via the report button, or by emailing forumteam@moneysavingexpert.com. All views are my own and not the official line of MoneySavingExpert.
  • xylophone
    xylophone Posts: 44,660 Forumite
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    Yes I have a state pension forecast of £155 per week from 2026 when I am 66.

    Is this on the assumption that you will continue to contribute from 2016-17 up to state pension age?

    What is your starting amount?
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