Peoples pension stay or go?

CH

I hope someone can advise, I enrolled in the peoples pension via my employer, I am 56 years old, divorced, I have a mortgage of 52k, due to end when I am 69, currently valued at £200k. I earn living wage so my contributions are not great, neither is my employers, I'm single so just the one income. My current pension statement has forecast just £17,450 at retirement age of 67 which makes wonder if it is worth contributing given I could use the money now! Incidentally, on enquiring as to my state pension value at retirement, I was told I would receive just 8k per annum! Are there any wise souls out there who could advise? This keeps me awake at night!
Thank you in advance

penners324

Keep paying into it. Look at the investment options and go for a higher risk investment choice, if you like.

The forecast is based on a worst case scenario.

Terron

You are worried that the state pension you might get will be too low, and are considering lowering your private pension contribution? There seems to be a lack of logic there.
Did you check your state pension on the government website? What did it say?
The value you were shown was likely in todays terms.
£8k is lower than the current full state pension (>£9k). You will be covered by the transitional arrangements, so that seems low unless you were contracted out, in which case you must have an older pension. Or maybe you were abroad and not contributing. The government forecast may show a COPE and will show how many years you have been contributing.
Pension scheme forecasts have to follow certain rules which mean they are generally very pessimistic. 
Your employer should be matching your contributions (up to a certain level) so not contributing means giving up free money.

dunstonh

 My current pension statement has forecast just £17,450 at retirement age of 67 which makes wonder if it is worth contributing given I could use the money now! 

Pension projections are pessimistic.  It is also showing the benefits in today's spending power.  Not what it will actually be.

If you need the money now whilst you have an earned income, then just think how desperate for money you are going to be when you have no earned income.

Opting out of employers scheme is like burning £10 notes each month.

Dazed_and_C0nfused

dunstonh said:

 My current pension statement has forecast just £17,450 at retirement age of 67 which makes wonder if it is worth contributing given I could use the money now! 

Pension projections are pessimistic.  It is also showing the benefits in today's spending power.  Not what it will actually be.

If you need the money now whilst you have an earned income, then just think how desperate for money you are going to be when you have no earned income.

Opting out of employers scheme is like burning £10 notes each month.

And as People's pension appear to operate both net pay and relief at source methods it's quite possible you would be paying extra tax for the privilege!!

Sherpa

I’m in a similar position to CH as my Peoples Pension is forecast to be £16800 and I’m on living wage too. I would echo what the other posters are saying, we’re getting free money from the government and as my pot is only worth £6.5k ish I’ve set my investment risk to “adventurous” to maximise growth.

I rang Pensionwise for some guidance and they will explain the different options. One of the options is to take the lot out, but only 25% is tax free and you have to pay tax on the rest. I’m inclined to let it build up and go for a flexi drawdown pension when I retire. If my health allows, I may continue to work until I’m 68, take my state pension (at 67) and invest this into my private pension.

CH

Thank you so much for your helpful comments, they have given me some clarity, I think I need to educate myself on this topic to ensure a good outcome in the future, I appreciate you taking the time to offer your advice.

Albermarle

CH said:

Thank you so much for your helpful comments, they have given me some clarity, I think I need to educate myself on this topic to ensure a good outcome in the future, I appreciate you taking the time to offer your advice.

Link to government website on the subject.

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