Planning for retirement as a single person - any hints or tips

OneInTheHat

I am 43 soon to be 44 :j

I have 2 children, one turns 17 this year and the other 16. I work full time and bear all the costs for the children.

I have been single for some time (divorced) and I'm starting to think I should actually plan for retiring being single. Not that I haven't been, but obviously when I was married we were planning for retirement as a couple. After the divorce, I think I hadn't really wanted to think about being on my own for that long but the longer I am single, the more I think the sensible idea would be to plan to retire on my own.

So I know I get a council tax discount for being single. Is there anything additional I'm likely to get a discount on as a single pensioner?

I'm guessing if I am still single, it's more likely that I'll end up needing to downsize because a house (even though it's a tiny, terraced cottage!) will be costly for one pensioner.

kidmugsy

A defined benefit pension will be less use to you as a singleton because the widow's pension will be of no use. So if you do have any DB pension rights accumulated you may want to consider transferring them out to a DC pension if your DB scheme qualifies for such transfers out

As for your cottage: I recommend that you do what you can by way of saving to allow you to keep it. If you were a tenant you'd pay your landlord the rent, and he has then to pay income tax on it. An owner-occupied house escapes that tax burden, and has done ever since 1963 when the tax on "imputed rent" was scrapped. Put otherwise: we owner-occupiers have huge tax privileges - you'd do best to hang on to yours.

OneInTheHat

thanks. I don't have a DB pension - just a DC one through work (that isn't huge but I'm prioritising it)

I have a mortgage on the house but with my current financial estimate, I should be mortgage free before I retire though hard to know what more the kids will need (I think both will end up at university, I'd like to help them out as much as I can)

xylophone

A defined benefit pension will be less use to you as a singleton because the widow's pension will be of no use. So if you do have any DB pension rights accumulated you may want to consider transferring them out to a DC pension if your DB scheme qualifies for such transfers out

The OP presumably has a pension (or soon will have) as she is employed?

But (gloomy thought), there could be support for her children in further education if she were to die suddenly while they are still so young.

She could also nominate them for the death benefit.

If she does have a DB pension then she would almost certainly have to take specialist advice before transfer so the full picture would no doubt be considered.

xylophone

I work full time and bear all the costs for the children.

Surely their father should be contributing?

When you divorced, there was no pension sharing order?

Have you obtained a new state pension statement?

https://yourstatepension.campaign.gov.uk/

If you contributed more to your occupational pension would the employer match the contribution?

kidmugsy

OneInTheHat wrote: »

hard to know what more the kids will need (I think both will end up at university, I'd like to help them out as much as I can)

On this be hard-headed. They have huge "personal capital" i.e. future earning power. Let them worry about their student loans. You should try to give them the peace of mind that when you retire your finances will be in a stable condition so that you won't have to call on them for financial help late in life.

OneInTheHat

it's a long story (the divorce). Was a clean break divorce - so all settled with no ongoing maintenance. I earned more than him so had to buy him out of the house. He had a very large pension (but was also older than me) so got to keep the whole pension. I got a mortgage on the house but now own it and will have paid off the mortgage fairly soon. I had virtually no pension (his was a very large final salary one, we had always assumed we'd live off his pension and mine would be a small top up). So the last 5 years, I've been trying as much as I can to get going with a pension pot. If any woman reads this, if I could give one piece of advice it would be to make sure you have a similar pension to your husband because you never know when things could go wrong!

Re child maintenance, he does not pay regularly because he refuses to give me money (because he feels I earn more than him fgs - despite the money being for the kids). I have lost the will to fight in court (he stretched the divorce out so it took almost 4 years). So what I do is I get him to do things like pay for the school trips (they are both at state school so it's not huge but it's something), when my son needs cricket kit or football boots I get him to pay for those. He will pay stuff directly for the children and I just make sure these bills go to him - so uniform etc. I said I would set up children's ISAs in their name and he could contribute - he just never does. But at the moment, it is fine because he will pay for their things directly and as they get older, this will get easier as they can go directly to him.

No, the employer won't match a higher contribution but I am doing my best to contribute what I can. I have accumulated around £100k in a pension now but also have historic ISAs of about the same amount. So it's a start.

I think I will need around £2k-3k gross to live comfortably (I live in London so I think my bills are higher than some on here) so I still have some way to go if I want to be able to bring that in on my own.

OneInTheHat

kidmugsy wrote: »

On this be hard-headed. They have huge "personal capital" i.e. future earning power. Let them worry about their student loans. You should try to give them the peace of mind that when you retire your finances will be in a stable condition so that you won't have to call on them for financial help late in life.

thanks that's a good point. They are good kids and both are getting jobs this summer as they want to start saving themselves.

xylophone

Good grief! Did you have a solicitor acting on your behalf?

Have you obtained a new state pension statement?

Had you considered starting a personal pension in addition to your occupational pension?

AnotherJoe

OneInTheHat wrote: »

I'm guessing if I am still single, it's more likely that I'll end up needing to downsize because a house (even though it's a tiny, terraced cottage!) will be costly for one pensioner.

What could you downsize into that's cheaper than that ? A flat will have maintenance charges and possibly unexpected large bills. Both will have council tax.
Unless it's a one bed house in Mayfair or Kensington selling up would seem to be unlikely to release enough to buy cheaper elsewhere.
If you like the house and location I'd plan on staying there

OneInTheHat

Yes had a solicitor. It was a big battle and in the end we decided to settle to avoid it continuing for another 5 years. I took my solicitor's advice and also went and got another independent solicitor's advice and both gave me the same advice. I don't want to go into the details but we were both high earners and exh quit his job and took a far lower paying job just after we split up. That meant his future earning potential was assessed to be far lower than mine (adding in the fact that he was 10 years older too) so the settlement was always going to be against me. I knew he had done this deliberately and argued that the minute the divorce was done, he would go back to a high paying job. In the meantime, the only people benefiting from us trying to sort out the settlement were the lawyers (can you imagine 4 years of legal fees).

Anyway I agreed the settlement, got divorced. 6 months later he quit his low paid job for a high paid one. He has a new girlfriend - a very wealthy one- and they are v happy. C'est la vie.

I actually bear no grudge now though it's taken me a while to say that. But I must admit it has put me off a new relationship .

I contribute the max I can afford into the company pension to get the tax relief at the moment. Do you think it would be better elsewhere?