Aged 35 - I don't have a pension!

Rollinghome

Starbrite wrote: »

If your meant to have 35k saved by 35yrs old are you meant to have 40k at 40 and so forth?

I only started my pension at 34 and a half yrs old. I feel like I'm playing catch up and have realised I won't be a rich pensioner

Goodness gracious, at 35 you have just 15 or less earning years years behind you but 30 years ahead of you when you might expect your earning power to be at it's greatest. Why shouldn't you be a wealthy pensioner?

At 35 I had virtually no pension entitlement as I remember but still managed to end up more than comfortable. Grab your opportunities and you've still got plenty of time to accrue capital, preferably as tax efficiently as possible.

We shouldn't be too irresponsible in our youth but it's there to be enjoyed and can't be bought again at any price. Most of all, at 35 we should never be afraid of the future.

dtsazza

Rollinghome wrote: »

Goodness gracious, at 35 you have just 15 or less earning years years behind you but 30 years ahead of you when you might expect your earning power to be at it's greatest. Why shouldn't you be a wealthy pensioner?

That's very true, it's not like someone would be out of time. What they have missed out on, is 15 extra years' worth of compounding that they would have got with investments at 20 (which is partly offset by likely higher contributions in later years).

If you assume 6% average growth, £1 paid in at 20 will have grown to £13.76 by 65 (1.06 ^ 45). Paying in £1 at 35, you'll see it grow to £5.74 by the same age.

One might mentally expect that investing one-third of the way through your career will still produce two-thirds of the same potential growth, but compound growth doesn't work that way! In fact to play catch-up (under the assumption of 6% growth), you'd have to pay in £2.40 at 35 to get the same results as £1 at 20.

So the game definitely isn't over; but the later you leave it, the more you'll need to put away, in an exponential (not linear) fashion.

At 35 I had virtually no pension entitlement as I remember but still managed to end up more than comfortable. Grab your opportunities and you've still got plenty of time to accrue capital, preferably as tax efficiently as possible.

We shouldn't be too irresponsible in our youth but it's there to be enjoyed and can't be bought again at any price. Most of all, at 35 we should never be afraid of the future.

This is all true of course - the main thing is about taking action and thinking about pensions at all! Starting retirement planning at 35 is still fine (whereas planning at 55 would likely be too little, too late).

Starbrite

Oh so I still have a chance to save enough to buy my massive yacht and sail the seven seas in my old age prentending to be Captain Jack Sparrow?

OK I have the worst pension ever according to this forum. I set it up before I found this fourm I was like S**t I need to do something and choose one whaich made sense to me....

I have a Virgin Stakeholder Pension, I pay £165 a mth as from April 2012, and my employeer pays £100 a mth then I get the tax releif on top...

I know there are far better pensions out there I just need to speak to a FA to find out what better deals there are, I just havn't got round to this yet....

atush

Actually, how much time you have to make up lost ground depends on other things in your life. If you have already had sprogs, and ont plan any more then maybe. But at 35, if you haven't started yet and will- well they cost a LOT of money to raise.

So, starting at 35 'might' be OK, but we don't know enough to say. Just that you should get your skates on and save hard!

coastline

I'd guessed the typical average pension pot in the UK was about 40-50 grand....this article from Aviva reckons the over 55 yo's have only 30 grand...so anyone with very little savings is not alone..
At 35 yo...you've still got time...and if its to be compulsory soon then theres your incentive...being realistic if you can match the state pension payout then you should be ok...mind I'm not sure everyone will agree..

http://www.people.co.uk/news/uk-world-news/2011/12/07/over-55s-savings-pot-down-27-102039-23616041/

gadgetmind

coastline wrote: »

I'd guessed the typical average pension pot in the UK was about 40-50 grand....this article from Aviva reckons the over 55 yo's have only 30 grand

Nice quote.

"However, the report found that more than a third (37%) of economically active over-55s have yet to make plans for their finances in retirement, with the majority only starting to think about it at age 48, and then waiting until they are 52 before seriously worrying about it."

How odd that people haven't built up a retirement fund given that they've not actually put any thought or work into it!

jimb0

There seems to be a lot of different figures out there for this.

ONS statistics mentioned in one article suggest an average (nearly always a misleading stat) of £91k for people retiring between 50-64. Something else I read elsewhere suggested that the average amount saved for women aged 56 is just £9k.

I am in the same boat as the OP with minimal pension savings at 36, although I have several years full ISA and >50% equity in my house and my kids are teenagers. I am thinking of diverting all higher rate income into pension for a few years at least in order to catch up. The one thing that makes me nervous is the lack of control and those rotters in government changing the rules.

gadgetmind

jimb0 wrote: »

I am thinking of diverting all higher rate income into pension for a few years at least in order to catch up.

Top notch plan!

The one thing that makes me nervous is the lack of control and those rotters in government changing the rules.

So enjoy higher rate tax relief while you can!

jimb0

I've opened a SIPP with HL in order to get access to a Vanguard LifeStrategy fund just to get things started after reading various things on Monevator etc. I am just waiting to find out what my new employer is going to do with pension provision under the new rules. They currently only offer a non-contributory stakeholder which is a bit crummy for a largish financial services firm...

gadgetmind

jimb0 wrote: »

I've opened a SIPP with HL in order to get access to a Vanguard LifeStrategy fund just to get things started

My wife is currently doing exactly the same.

They currently only offer a non-contributory stakeholder which is a bit crummy for a largish financial services firm...

Agreed.