My Pension History

CityOwl

I have spent the last couple of years planning mine and my husband’s escape from full-time work. This forum has been invaluable especially as I have not been very successful when trying to engage family and friends on this topic. I have literally seen their eyes glaze over when I have asked about their plans and this has been the standard reaction whatever their ages.

With 2019 fast approaching, I was updating my pension spreadsheet and it dawned on me that I had a pretty bad start to my pension journey.

1987 - Joined a bank at 18 years old, they had a non-contributory final salary scheme. I left after 16 months, so I did not qualify for a deferred pension as the minimum time in the scheme was 2 years.

1989 - Joined an American IT firm at 20, however the minimum age to join the pension scheme was 23 years old. In my mid-thirties during an employment law course I asked a barrister if this rule could have been challenged as it disadvantaged women, the answer was yes but that I had left it too late.

So at 23 I had been working over 4 years and I still had no workplace pension provision.

1991 - Finally joined my employer’s DC scheme and participated for 3 years before I left on maternity leave, never to return.

2000 - Contracting with no pension (my fault) whilst waiting for security clearance for my civil service job.

Late 2000 - At 32, I joined the Civil Service Pension Scheme, a DB final salary scheme that allowed me to transfer in the £12,000 pot from my DC pension. I worked part-time and the amount it accrued every year looked pitiful to me as I still did not appreciate how valuable it was.

Over the next 18 years, I moved into the Local Government Pension Scheme and returned to full time employment. At the age of 50 I have managed to built up a DB pension of just over £10,000 per annum (part CSPS and part LGPS). I am truly grateful, as my motivation for joining the public sector was their family friendly employment policies.

I am not completely sure what I am trying to say other than, my pension education did not begin until my mid-forties and I am where I am by accident rather than design.

tacpot12

I think your experience is a lesson to all; it's never too late to learn, and to do something about your pension. There is a lot of help available to people willing to ask for it. Thanks for posting.

LHW99

I started a few years earlier than you City Owl, and I think at least part of the problem back in those days was that however interested you were/are, it is only since the expansion of the internet that "ordinary people" have relatively easy access to information on pension types, and possbile investments. When I started my journey, advisers were paid by commission, and in general "with profits anything" was frequently offered. Which is not to say these types of insurance and pension policies didn't have some benefit, but I certsinly spent a good long time trying to work out exactly what they were invested in and where - with fairly limited success.

enthusiasticsaver

I think women particularly (myself included) don't pay enough attention to pensions. I kick myself when I think back 35 years when my husband, then 25 joined a new company and we read up on the various levels of contributions and rewards. I encouraged him to do the top scheme with highest contributions (then 7% which was topped up by employer) to give a booster DB scheme with the aim of early retirement. He travelled a lot and did erratic hours so I pointed out that he might not want to do that in his 60s. The scheme eventually was removed and changed to a DC scheme in 2008 but by then he had built up excellent benefits and we again paid the maximum of 10% which was topped up by company of 20% as reimbursement for withdrawing DB scheme. He retired at 58 with a lump sum of £160k and a pension approaching £30k a year.

I worked for a bank from 1978 until 1985 when I went on maternity leave for 3 years whilst having our daughters then went back part time on and off for the next 15 years then 10 years full time then 5 years part time until last year when I retired aged 58 also. I paid the bare minimum all through my working years and retired with a lump sum of around £12k and an annual pension of about £5k. I get another GMP from my bank pension in just over a years time and as yet I am unsure what that will be but best guess is around £4k per annum. Luckily we share our income so the fact my pension is around a third of my DHs is not a problem as such but I do wonder why I never increased my contributions but paid attention to my DHs. I think it was because my salary was so much lower than his due to being part time and lower rate per hour, losing more to my pension every month would have meant me working for even less each month effectively.

Peelerfart

Yes,thanks for posting.

I think things will be ok for you. Not so perhaps for others in less generous schemes these days, but hey!

Well done city owl :-)

Prism

I started paying into a personal pension at the age of 26 when my bank detected a pay rise I had just been given and invited me in for a meeting with their advisor. I started a Norwich Union pension (now Aviva) and have been paying in ever since. It was a multi asset fund which I used for the next 15 years and paid almost no attention to.

I went self employed in 2003 (limited company in 2011) but since it was a personal pension I just carried on paying in. There was a period around 2007 when I had some money issues through lack of work so I reduced my payments to just 360 a year for 4 years. I know realise this coincided with the financial crash but at the time didn't pay much attention to it. I would say, except for that period I have paid in around 10% of my gross salary.

About 5 years ago I transfer the pension within Aviva to a different plan which allowed me to manage it online and I started taking an interest in funds. For some reason it was split across two plans and I transfered one of those to a YouInvest SIPP last year for better fund choice.

This last year I haven't paid anything into my pension as I have been trying to build up a better cash reserve in case of illness within the business. I still have possibly 15 -20 years of contributions left but I hope to retire slightly earlier at around 60.

jonnygee2

Late 2000 - At 32, I joined the Civil Service Pension Scheme

Your story is interesting but also potentially serves as a cautionary tale.

These days many (I imagine the majority of) private companies offer the bare legal minimum. Without some attention or thought to pensions, not everyone will be as lucky as you were.

As a 35 year old I do wonder what will happen to my generation on retirement. I think like you a lot of people don't know much about it at this age. But unlike your generation, we are less likely to find ourselves in generous pension schemes or gain from inflation busting house price rises.

kidmugsy

Membership of my first employer's pension scheme was compulsory for me. It was a money purchase scheme: 5% me, 10% employer. (I have no memory of the details but that's what Google tells me.) I do remember that the money ended up in insurance investments.

Later I transferred the assets into a Final Salary scheme, mainly - if memory serves - on the advice of older colleagues. My surviving paper records begin only some time after that transfer. Unless some are hiding in the attic.

MallyGirl

Membership of my first employer DB scheme was compulsory but was into a different part of the scheme from age 21 to 25. At 25 I joined the main scheme but only stayed there another year. This is my only DB scheme and will contribute £1400 pa at 60 plus GMP plus some other mysterious benefits that they won't tell me till I retire. I could transfer and get £83k but I like the idea of something guaranteed (however small) as my bedrock.
Next job was a small company and the MD introduced us to his mate the FA so I ended up paying in to a Sun Life of Canada pension for 5 years. With hindsight it was expensive in terms of fees but at least I was paying into something- no employer contributions.
Next job was my first intro to a company scheme - a GPPP and a couple of other personal variations as the company changed hands / merged twice in my 4 years. I always contributed enough to get the max employer but no more - maybe 5% me 10% them - and paid zero attention to what it was invested in so it stayed in the default.
Next one was another company scheme- same approach getting the max from the employer but leaving as default funds.
Current job is another company pension scheme but I finally woke up at about 49 and started thinking about retirement (early).
I have now transferred all the old pensions to a SIPP apart from the tiny DB. I have massively increased my contributions to the company scheme to take me below high rate tax and have changed the funds to fit with my overall portfolio plan - all held on one big spreadsheet.
I wish I had woken up earlier than 49 but at least I have always had a pension and always got the max from my employer.

LHW99

As a 35 year old I do wonder what will happen to my generation on retirement. I think like you a lot of people don't know much about it at this age. But unlike your generation, we are less likely to find ourselves in generous pension schemes

This is very true, however your generation will benefit from the recent rule change that allows inheritance of residual DC pension pots. Although this may not be helpful to everyone, it was also the case that in the past many people were left surviving on only the state pension. Autoenrollment may not be as good as private DB pensions were, but they will reach a much broader spectrum of (currently) younger people.

Kynthia

jonnygee2 wrote: »

Your story is interesting but also potentially serves as a cautionary tale.

These days many (I imagine the majority of) private companies offer the bare legal minimum. Without some attention or thought to pensions, not everyone will be as lucky as you were.

As a 35 year old I do wonder what will happen to my generation on retirement. I think like you a lot of people don't know much about it at this age. But unlike your generation, we are less likely to find ourselves in generous pension schemes or gain from inflation busting house price rises.

Don't make the mistake of comparing the best that some received in the older generation to what the majority of our generation will get.

I probably have some of this wrong but these public sector DB schemes often only allowed full time workers to join, and only once they were 25 years old. You had to stay for 5 years in the scheme to have a deferred pension when you left. It wasn't until the 70s that a widows pension was included, so wives often didn't have their own pension and they had to live on the state pension once their husband died. There was no widowers pension until the late 80s, and the widows/widowers pension only started accruing at those points. I've also heard that private sector pension DB schemes didn't used have to be indexed up each year if you left the scheme. So I know people retiring now who had deferred pensions from their 20s and 30s which initially looked valuable but are now worth very little due to inflation. Obviously not every employer had DB schemes and many never had anything.

Things are always changing and all we can do is try to ensure people kniw they need to educate themselves about pensions as early as possible.