My Pension History

crv1963

CityOwl wrote: »

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.

I feel very fortunate reading others stories here. I never really paid a great deal of attention to my pension other than to make sure that I stayed in it throughout the different roles that I took. Having been told by an old (to me as a 21 year old, in reality he was probably in his mid 50s!) charge nurse, that pension is your ticket to a good old age, spend a bit, gamble a bit(investments etc) and save a bit (for what you want, cars, holidays etc), but never don't have a pension membership.

My epiphany took place in reality nearly two years ago following my heart attack, compulsory resting meant having time to read thoroughly many threads on here and to proactively plan our retirement.

Motivated if I am honest by wanting to make sure Mrs CRV is able to retire if I'm gone. Luckily for me and maybe not for her following treatment I'm now judged to be able to assume that I have a normal if not extended lifespan by my cardiologist!

Mrs CRV has had a different pension path and we are now playing catch up. My sons have watched what I'm doing, the older one has at 22 set his path to FIRE, and the youngest has at 21 set his pension saving up with the goal of retiring 10 years before his SPA which he thinks will probably be 70 by the time he gets there.

I'd like to thank everyone for their tales and the lessons I and my sons have learnt.

Happier_Me

Interesting thread...I watched my parents struggle to better themselves throughout my child and early adulthood (they were teenage parents and started married life living with my grandparents). Needless to say, paying into a pension has never been a priority for my parents and they didn't teach me the importance of saving for retirement. Through their own actions though, they did teach me the importance of working hard and being sensible with my money.

At 18 I got a job in the private sector, no pension available so I set up my own private pension. A sensible move for someone so young, but 18 months later I started working for local government and I didn't immediately join the pension scheme because 'I already had a pension'. I was 22 when I joined the scheme and I estimate that delay has cost me around £1,400 a year in lost pension from the age of 60. In comparison, my private pension is now worth £6.5k.

I'm incredibly fortunate to still be in the LGPS at the age of 43. I've known it's a great scheme for a long time but it's only since turning 40 that I have come to fully appreciate its value. It's only since turning 40 that I have stopped sleep walking towards retirement and actually started to plan out what we need in terms of income and the gaps we have to address. When I say 'we', my husband is still sleep walking towards retirement, he's just happy to follow whatever plan I set as long as he hasn't got to give it any thought himself and I shut up talking about it (I'm sure he'll thank me one day!)

I consider myself fairly intelligent and money savvy yet it still took me until I reached my 40's to start properly planning towards this thing called retirement. And I know of just one other person in my circle of friends and family that is as focussed on retirement as I am, the rest save the bare minimum or nothing at all.

Herbalus

The different stories on here are great.

I'm nearly 30. Most of my peers went to university so had no pensionable income until 22. I was 24 as a 4 year course and gap year in Germany.

I joined a FTSE100 company that caused big disillusionment around the time I joined because of the transfer from DB to DC. I've never had a sniff of DB schemes. But this company pays 17% of my salary into DC and I contribute 7%. So in 3.5 years the DC pot is around £30k with growth (well, it was £30k when I last checked before the market started to slip in recent months).

Who knows where this will end up, and whether it will provide anything like a DB scheme. LGPS sounds great. All I can focus on is putting what I can into pension as early as I can.

MallyGirl

That is a good start - the more you can add now, whilst still enjoying your 20s, the better. As a late developer I am now contributing 5% to get the employer 10% plus an additional 40% catchup. If I had ramped up earlier I wouldn't have to be hitting it so hard now at age 51.

Novice_investor101

I got lucky - at 24 my manager shoved a piece of paper under my nose & told me to sign it. It was an application to join the company DB scheme. I was in it for 10 years til they closed it. Now worth £3.5k a year from age 65.
I then left to work for an insurance company, who taught me about pensions. I'm in their DC scheme where I pay 8% and they pay 14% salary sacrifice. I also have a LISA. I only pay £100 pm to that atm but will increase it as I get payrises in my job.
I'm 37 now & eventually aiming to retire or go part time at 60. I've a stocks & shares ISA too, so that forms part of the plan. If my premium bonds numbers come up I'll be retiring asap!

JoeCrystal

In my case, I didn't think about pension until I was about 24 and only I stumbled into this helpful forum. At the time, my employer only offered a stakeholder pension with no employer's contribution. With the useful comments, I decided to find a local IFA and set up my private pension which is cheaper and more extensive for a very reasonable fee.

Five years down the line, I used the same IFA to transfer the pension over to the cheaper platform. As I was aiming to contribute 25% of my salary throughout my working life, I managed to build up a private pension pot of 58k by 32. My employer, on the other hand, is only contributing the minimum amount of 3% so only 5% overall. My work pension since 2013 is only £5k which is disappointing, but I am glad that I had a will to do it myself privately.

Otherwise, I would be in a bad position already if I only relied on auto-enrolment.

badmemory

What really worries me are the people who have autoenrolment pension schemes. They think they are doing the right thing. But unless they are starting at 16 with the full meagre total 8% contribution it is not going to fund anyones retirement. And let us not forget the companies that have high access to this & low top limits for contributions. Will this take 30 years to become the scandal it should be?



Comes under the heading of we (as in government) are actually going to reduce your state pension (by removing SERPS) & fool you into thinking you are going to get more, which will cost you more of course, thereby upping the value of anyones DB pension & devaluing the rest. Tell me which MPs voted for increasing their already inflated retirement income by over £30 a week? Gotta love those noses in the trough!

Terron

Kynthia wrote: »

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.

My first employer's pension schem was only open to managers. IAfter a few years I took out a private one which thanks to the GAR is looking like it will be pretty good.


My second employer had what appeared to be a classic final salary scheme, paying 1/60th of final salary for each year of contributions, but my job was sold to anotgher company after 5.5 years The final salary used for the calaculations is being raised by inflation and is now higher than I ever earned in any job. However indexation once the pension is in payment is entirely at the trustees discretion, and since 2002 they have only given 2 raises of 1% each, So that is looking much worse than expectedd, even though the GMP should provide some indexation eventually.


IIRC DB pensions earned from 1997 onwards are required to be indexed.

kidmugsy

Terron wrote: »

IIRC DB pensions earned from 1997 onwards are required to be indexed.

Which is why if a DB pension falls into the PPF the pensioner will get a nasty surprise when part or all of the inflation-linking evaporates.

Malthusian

badmemory wrote: »

What really worries me are the people who have autoenrolment pension schemes. They think they are doing the right thing. But unless they are starting at 16 with the full meagre total 8% contribution it is not going to fund anyones retirement.

For low earners, State Pension plus a fund formed from contributions of 8% of their earnings throughout their career is likely to fund a perfectly good retirement. For illustration, someone working a 35-hour-a-week minimum wage job (earnings £14,250 a year) and saving 8% of their earnings from 22 to 67, and assuming a modest growth rate of 2% over inflation, would accumulate a fund of £85,000 in today's money (i.e. after allowing for inflation).

4% of £85,000 plus a full State Pension is an income just shy of £12,000pa - likely to be perfectly adequate for someone used to living on £14,250pa in their working life. It is well over the 67% benchmark, bearing in mind the ratio of [pension income needed] to [working income] increases the lower your income is.

As for those whose earnings increase above minimum wage during their career, or want to retire earlier than SPA, it's their responsibility to save more and always has been and always will be.

Obviously auto-enrolment is not going to help those who've got to 40 or 50 without making any pension provision but want a retirement income higher than £8,500-odd a year. What would? Other than giving them free money from the taxpayer?