31, no pension and concerned

adonis10

I started proper work late due to Uni etc., and now find myself at 31 with no pension and am starting to get a little worried about it.

I'm a low earner on 24k so will struggle to put much away, maybe £100-200 a month. Is it even worth it? Where should I start? On the positive side, my outgoings are quite low (no rent/mortgage).

I literally know almost nothing about pensions due to a care-free, live for now attitude which is fine, but I'd rather not be eating smart price beans on toast every day at 65!

Any help greatly appreciated.

d70cw6

yes you should save for your retirement.

adonis10

d70cw6 wrote: »

yes you should save for your retirement.

Kinda accepted that given my original post, so not too sure what positive input your reply has had.

Linton

Does your employer have a pension scheme? If so it is almost certainly the best idea to join that as they will contribute something.

adonis10

Linton wrote: »

Does your employer have a pension scheme? If so it is almost certainly the best idea to join that as they will contribute something.

Not at the moment (v small employer) but I believe something is to materialise in the near future, however I do not know how 'near' we are talking.

CLAPTON

adonis10 wrote: »

I started proper work late due to Uni etc., and now find myself at 31 with no pension and am starting to get a little worried about it.

I'm a low earner on 24k so will struggle to put much away, maybe £100-200 a month. Is it even worth it? Where should I start? On the positive side, my outgoings are quite low (no rent/mortgage).

I literally know almost nothing about pensions due to a care-free, live for now attitude which is fine, but I'd rather not be eating smart price beans on toast every day at 65!

Any help greatly appreciated.

basically you get out of your pension what you put in plus a bit of tax relief


1. so in todays money : what income do you want in retirement?
2. what will your state pension be (in todays money)
3. so how much to fund?
4. assume you live to 85 (at least ) and retire at 65 then thats 20 years of income you need
so if you need say 5,000 more than thst state pension you need to have saved about 5,000 x 20 = 100,000 at least
5 if you are 31 now then you have 34 years to save so
100,000/31 = 3,225 per year


the above is a starting point

you can enhance this by
- remembering you get 20% tax relief on pension contributions so you only actually need to pay in 3225 x0.8 = 2,580 per annum

-hopefully your employer will start paying into your pension soon so that will reduce the amount needed

If you don't own a property think about how important that is

adonis10

CLAPTON wrote: »

basically you get out of your pension what you put in plus a bit of tax relief


1. so in todays money : what income do you want in retirement?
2. what will your state pension be (in todays money)
3. so how much to fund?
4. assume you live to 85 (at least ) and retire at 65 then thats 20 years of income you need
so if you need say 5,000 more than thst state pension you need to have saved about 5,000 x 20 = 100,000 at least
5 if you are 31 now then you have 34 years to save so
100,000/31 = 3,225 per year


the above is a starting point

you can enhance this by
- remembering you get 20% tax relief on pension contributions so you only actually need to pay in 3225 x0.8 = 2,580 per annum

-hopefully your employer will start paying into your pension soon so that will reduce the amount needed

If you don't own a property think about how important that is

Informative, thanks.

In today's money, probably 20k/year.

State pension - haven't really considered that as I assume that by the time I retire it will be worthless/been abolished anyway. As such, 20k/annum is totally unrealistic! :shocked:

With that in mind, probably more like 12k/year. It's ok, I like baked beans!

I do own a property, so that's not a pressing issue at this time.

atush

Ok, so first off ask your employer when is their Staging date ie the date they HAVE to start a work pension for everyone. Join that when it starts.

2, what can you save now? With 24K income, you aren't a 'low earner'. And with no mtg or rent you should be able to save more than 100-200 per month. You 'should' be able to save what it would cost you in rent to live somewhere?

3, what savings have you got now, and what debts? At what % interest? You should have 3 months spending saved in emergency cash, or at least a few K.

4 once you have taken care of emergency savings and high cost debt (as opposed to low cost such as mtg and older student loans) then open a personal pension. If you have plans for the medium term, split your money in 2 and put half in pension, half in S&S isas.

adonis10

atush wrote: »

Ok, so first off ask your employer when is their Staging date ie the date they HAVE to start a work pension for everyone. Join that when it starts.

2, what can you save now? With 24K income, you aren't a 'low earner'. And with no mtg or rent you should be able to save more than 100-200 per month. You 'should' be able to save what it would cost you in rent to live somewhere?

3, what savings have you got now, and what debts? At what % interest? You should have 3 months spending saved in emergency cash, or at least a few K.

4 once you have taken care of emergency savings and high cost debt (as opposed to low cost such as mtg and older student loans) then open a personal pension. If you have plans for the medium term, split your money in 2 and put half in pension, half in S&S isas.

1. Yeah, will do. From looking online, it appears that all employers MUST auto enrol by 2018, correct?

2. I don't live in a cheap area, so I feel like one. I guess I value living life whilst young so I do spend more than I probably should on travel, socialising etc. Could cut this down, though. I'd probably say £300 tops/month because, whilst there is no mtge or rent, I do pay £160 for maintenance charge, ground rent and insurance as i own a flat.

3. Not a great deal of debt, an ok amount of savings. It's basically a ratio of 8:1 savings to debt, so no big deal. Will be paid off by September.

4. I'd say that is taken care of, although I have a figure (10k) in my head which I want to achieve and never go below (in cash savings). Once this is achieved, I will then open a pension.

Any advice as to who to speak to regarding different plans? I am well aware of the vast array of conmen and dodgy plans out there, which is my main worry.

Tango130

3. Not a great deal of debt, an ok amount of savings. It's basically a ratio of 8:1 savings to debt, so no big deal. Will be paid off by September.

Pay your debt off now and save all that interest your throwing away.

adonis10

Currently have a Virgin All Share Tracker S&S ISA. Opened it a while ago, then had a dip in earnings so didn't invest anything but have now started to top up £50 a month, as a starting point.

Any thoughts on this fund?