Miniscule pension, mid 40s, should I increase it?

dunstonh

50k is probably above average for mid 40s. 

I would say it's below-average if it's the total provision.  The problem with average measures is that many people hold multiple pensions.   So, one person could hold three pensions of £50k.

However, its not a disaster and can be recovered with an increase in contributions.

On the other hand, with my pension being so I miniscule anyway, part of me thinks I should just live for today.

You are at a stage where you can either do something about it or be prepared to live on the breadline for 25-35 years.

[Deleted User]

Billy_B_North said:

Beardybaldy said:

My total pension pot is miniscule. It currently stands at about 50k as at last statement nearly a year ago.

So it's fair to say I'm on course for a very frugal retirement.

In other news, I've just had a small pay rise at work. I'm thinking of asking HR to direct that pay increase straight to my pension.

On one hand, I want to get used to a lower income, so its less of a shock if I make retirement age.

On the other hand, with my pension being so I miniscule anyway, part of me thinks I should just live for today.

Thoughts please? 

It sounds like it’d be worth you exploring whether you can find a job which pays more.

[b] You mention on another thread that you are just about to buy a property to rent out, which is strange if you are struggling to fund your pension appropriately. Would it not be better to take advantage of the tax breaks and put say £100k of that money into a private pension, taking advantage of this year and previous years’ allowances?[/b] 

My logic there is with a pension, I might put hundreds per month in (as I am now) but get next to nothing back.

With property, if I put hundreds per month in now, I should still have the same value in assets, plus a rental income, all on top of my miniscule pension.

But a pension is like gambling in a way. Every time I pay into my pension, sorry to be morbid, but I'm placing a bet that I'll still be alive in 20 years. I expect to be of course, but there's no guarantees. With property the same is true of course, but if I lose the bet, I still have assets to leave to my next of kin.

Realistically I want to do both, add to my pension and buy property. I really don't like have all my eggs in one basket.

The question is, do I take my small pay rise that I've just been awarded, and ask HR to divert it to my pension, or just accept the small amount of extra readies now?

jimi_man

Beardybaldy said:

Billy_B_North said:

Beardybaldy said:

My total pension pot is miniscule. It currently stands at about 50k as at last statement nearly a year ago.

So it's fair to say I'm on course for a very frugal retirement.

In other news, I've just had a small pay rise at work. I'm thinking of asking HR to direct that pay increase straight to my pension.

On one hand, I want to get used to a lower income, so its less of a shock if I make retirement age.

On the other hand, with my pension being so I miniscule anyway, part of me thinks I should just live for today.

Thoughts please? 

It sounds like it’d be worth you exploring whether you can find a job which pays more.

[b] You mention on another thread that you are just about to buy a property to rent out, which is strange if you are struggling to fund your pension appropriately. Would it not be better to take advantage of the tax breaks and put say £100k of that money into a private pension, taking advantage of this year and previous years’ allowances?[/b] 

My logic there is with a pension, I might put hundreds per month in (as I am now) but get next to nothing back.

With property, if I put hundreds per month in now, I should still have the same value in assets, plus a rental income, all on top of my miniscule pension.

But a pension is like gambling in a way. Every time I pay into my pension, sorry to be morbid, but I'm placing a bet that I'll still be alive in 20 years. I expect to be of course, but there's no guarantees. With property the same is true of course, but if I lose the bet, I still have assets to leave to my next of kin.

Realistically I want to do both, add to my pension and buy property. I really don't like have all my eggs in one basket.

The question is, do I take my small pay rise that I've just been awarded, and ask HR to divert it to my pension, or just accept the small amount of extra readies now?

You do with a DC pension, they can be left to n-o-k as well. In fact pensions are outside of Inheritance Tax as far as I'm aware. If you die under 75 they aren't subject to any tax - after 75 I think they are only subject to the n-o-k's marginal tax rate. 

Not sure that property is quite as tax efficient - hopefully someone will be along to give a better idea of this. 

Billy_B_North

Beardybaldy said:

Billy_B_North said:

Beardybaldy said:

My total pension pot is miniscule. It currently stands at about 50k as at last statement nearly a year ago.

So it's fair to say I'm on course for a very frugal retirement.

In other news, I've just had a small pay rise at work. I'm thinking of asking HR to direct that pay increase straight to my pension.

On one hand, I want to get used to a lower income, so its less of a shock if I make retirement age.

On the other hand, with my pension being so I miniscule anyway, part of me thinks I should just live for today.

Thoughts please? 

It sounds like it’d be worth you exploring whether you can find a job which pays more.

[b] You mention on another thread that you are just about to buy a property to rent out, which is strange if you are struggling to fund your pension appropriately. Would it not be better to take advantage of the tax breaks and put say £100k of that money into a private pension, taking advantage of this year and previous years’ allowances?[/b] 

My logic there is with a pension, I might put hundreds per month in (as I am now) but get next to nothing back.

With property, if I put hundreds per month in now, I should still have the same value in assets, plus a rental income, all on top of my miniscule pension.

But a pension is like gambling in a way. Every time I pay into my pension, sorry to be morbid, but I'm placing a bet that I'll still be alive in 20 years. I expect to be of course, but there's no guarantees. With property the same is true of course, but if I lose the bet, I still have assets to leave to my next of kin.

Realistically I want to do both, add to my pension and buy property. I really don't like have all my eggs in one basket.

The question is, do I take my small pay rise that I've just been awarded, and ask HR to divert it to my pension, or just accept the small amount of extra readies now?

You can hold your pension on cash if you want no investment risk, but yes, if it were me I’d be putting the extra in to my pension.

dunstonh

My logic there is with a pension, I might put hundreds per month in (as I am now) but get next to nothing back.
With property, if I put hundreds per month in now, I should still have the same value in assets, plus a rental income, all on top of my miniscule pension.

Unless you are gearing, there will be no difference.    Investments get growth on the assets (like property) and income (like property).   So, why would property make a difference but investing not?

But a pension is like gambling in a way.

Nothing like gambling.      Investing is buying an asset with a variable value.  Just like property.    A pension is just a tax wrapper that contains your investments.

Every time I pay into my pension, sorry to be morbid, but I'm placing a bet that I'll still be alive in 20 years. 

Statistically, four out of 5 make retirement.    The gamble is being on the 1 in 5 cases that do not.

With property the same is true of course, but if I lose the bet, I still have assets to leave to my next of kin.

As you do with a pension.   

Realistically I want to do both, add to my pension and buy property. I really don't like have all my eggs in one basket.

That would pretty much rule out property as being suitable then as a single rental property is putting your eggs in one basket.

The question is, do I take my small pay rise that I've just been awarded, and ask HR to divert it to my pension, or just accept the small amount of extra readies now?

What would your older self say to you now if you did either of those?

Albermarle

My logic there is with a pension, I might put hundreds per month in (as I am now) but get next to nothing back.

Your logic is flawed, there is no reason why you would get 'next to nothing ' back .

What is true is that to generate a decent income you need quite a big pot . Just like with property , to get a decent income you need to shell out a large sum in the first place. 

MaxiRobriguez

Mid's 40's means at least 10 years left until pension accessible.

Which is plenty of time for injecting capital into equities to ride out volatility and hopefully get some decent growth.

You'll thank yourself in the future if you do it.

onthebench

As someone in their mid-40s myself, I am curious what the average total pension pot actually is at this age?

I assume as people's standards of living and expectations vary so much a better rule of thumb might be "X time annual salary"?

I am 44 and my total pot is about 4x what my annual salary was until I switched jobs last year and took a big pay cut. It's more like 7x my current annual salary (although I supplement that salary with freelance income).

JustAnotherSaver

Bit of snobbery going on here.

Anyway, what's the deal with statistics and averages - what do they even matter? They don't impact me any. Most of you will be better off - still doesn't impact me any.

I see above the average mortgage is £600whateveritsaid. Makes no difference to me, mine is £390. The average wage is whatever it is, mine is around £27k. These figures really mean nothing tbh. 

What matters is your own figures - and whether they're good enough, or not. Not someone else's figures. 

onthebench

JustAnotherSaver said:

Bit of snobbery going on here.

Anyway, what's the deal with statistics and averages - what do they even matter? They don't impact me any. Most of you will be better off - still doesn't impact me any.

I see above the average mortgage is £600whateveritsaid. Makes no difference to me, mine is £390. The average wage is whatever it is, mine is around £27k. These figures really mean nothing tbh. 

What matters is your own figures - and whether they're good enough, or not. Not someone else's figures. 

Absolute figures don't matter, of course - someone who has been accustomed to living on a six-figure salary probably wouldn't be happy with the same things that would satisfy me in retirement.

But I can see the use in averages in terms of "by the age of X you should have Y times your annual salary saved in your pension pot", as it helps you to see whether you may be on track for a comfortable retirement. But finding those rules of thumb doesn't seem to be very easy!