Retirement planning when you're 50s, not a home-owner and don't have a decent pension pot/savings

Goose_Grass

Hi, In_spired.  I want to encourage you, as others above have.  You have a lot of things going for you: secure tenancy, long employment history, decent wages, generous employer contribution to your pension, some existing private pension, no debt, savings, a savings habit, accountancy training, and a habit of living within your means.  Be proud of yourself!

My personal take: people who save and invest have less to fear from inflation and benefit changes in retirement than people who don't.  I recognize that means-testing may change the equation for you, I can't really speak to that.  But as the future is always uncertain, I'd always want more assets of my own, so I have more choices in the future.  It's an opinion/philosophy, your mileage may vary.

I'm also an efficiency fan: I can't afford to do it all today, so what's the biggest impact I can make at the least cost?  To that end, these are the three things I would vote for (on top of all the great things you are already doing):

1. Check that state pension forecast, that's why so many people are suggesting it.  It's a website check, and if you are missing any years NI subsequently a phone call to find out whether buying them back would be profitable (your rates may even be reduced to do so).  This is often very good value-for-money, as an inflation-linked defined benefit.

 

2. As a basic-rate taxpayer, any money saved in a pension (at work or in a SIPP, which presumably your Vanguard lifethingie is) is subsidized by the government.  The employer matching at work is deferred wages, your wages, you earned that.  I know it cuts into your take-home packet to participate in pensions and SIPPS, but this is value I wouldn't leave on the table if I could afford to take it, as others above have said.

3. That accountancy accreditation sounds valuable, and you've almost got it now after I'm sure a lot of hard work.  I'd think about how best to work that advantage, as others said before me.

You know that all the hope in the world won't change the past, and that the second-best time to plant an oak is today.  It's really great that you are thinking about this now.

moving_forward

https://forums.moneysavingexpert.com/discussion/6228191/how-much-to-live-on

Ok I  have tried to link to a thread that is extremely useful. It features retirement planning and alot of people don't have mega pensions. It encourages you to think about what you need in retirement and plan accordingly.
If I've not managed the link please pop over to the how much to live on thread on the over 50s board.

NannaH

I think that most people on this board have no idea that for low earners who also rent,  having a small pension pot can be hugely detrimental to their retirement.
Someone with no personal pension provision, who is pennies under the limit for housing benefit/pension credit etc.  will end up far better off (as in their rent paid plus other benefits) than someone a few pennies over the limit, it’s a cliff edge and very unfair.  
They also use wildly optimistic figures for actual income from capital / £4 per week per £1000, it’s insane.  Then if you actually spend that amount, they want to know why and can stop any/all benefits.   

The people who try  to put money away for the future are actually penalised for doing so.  

I’d argue that for a renter who may only be able to get a pension pot of £50k, it’s absolutely NOT worth having.  You could end up far worse off and your pension would be gone within 5-7 years anyway.  

It is, thankfully,  different if you are disabled and on non-means tested benefits.  

People who haven’t lived it/seen someone else live it,  generally have no idea just how ludicrously unfair it is.
It will also be more widespread in say 20+ years time, it’s obvious what’s going to happen. 

Kim1965

Yes i believe  the benefits system is uncertain. Youcome across as a determined, independent person. So i guess you will try to improve your finances.
I think i would attempt to simulate via a benefit checker what you would get if you dud nothing. Then equate this to what size pension you would need to have to be better off and whether its possible. 

Dazed_and_C0nfused

Bimbly - yes, I would think my NI is ok - i was thinking of working longer to defer the state pension to increase it and to gain more income & savings in those 3 years rather than thinking i have an incomplete NI record.

Deferring your State Pension increase it by revaluing what you have already accrued, it doesn't add more contributions/qualifying years.

So deferring for a year might add 5.1% (for ever) but it doesn't mean your original starting amount would be increased because you have worked an extra year.

You stop paying NI once you reach State Pension age.

NannaH

That’s a very good idea Kim.
I saw my Sister brought to financial ruin because she had a tiny annuity of £40 a month from her divorce.  She was threatened/forced into taking the annuity even though she wasn’t yet state pension age.  I doubt it was even legal but she didn’t tell me until it was done. 

  She had a benefits income of £70 a week and was being charged £59 rent by the HA.   If I hadn’t been able to help her she would have been evicted. 

She was then ‘fortunate’ enough to become more severely disabled so got PiP.  
There must be so many, especially Women, caught in this trap. 

Nebulous2

What were your plans with your accountancy qualification that would mean a lower salary? 

I have a friend who started off doing her husband's books - he's a tradesman, then undertook a part-time accountancy qualification. Whilst studying she undertook to do the books for some other tradesmen they knew. She now has a good career as a finance manager for a large company, but still does the books for some family friends. These have become a bit of a drag now she is in full-time work, but she struggles with the idea of turning them away. 

What I'm saying is accountancy encompasses a great deal, and some of it can readily be done from home, part-time, as an add-on to another job. You could make use of your skills for some additional money and it could at least add to your savings if it didn't lead further. 

p00hsticks

in_spired2 said:

xylophone - I've not had a state pension forecast, I've just assumed I would get the (currently) £179 a week.  Maybe I should get a forecast though in case I'm going to get less.

https://www.gov.uk/check-state-pension

in_spired2

The Vanguard thing is a  S&S ISA Lifestrategy fund, not a pension.  I'm planning to add to this rather than to some of my lowest interest bank accounts in the future, with any spare cash, and fingers x'd it outperforms them in the next 13 years.

I wasn't able to check the pension forecast as I don't have a passport or mobile phone contract or a national identity card to prove I am me.  I will phone them "in the very near future".

I will continue saving for retirement and/or house deposit and monitor how things look between pension pot vs benefits from time to time.

I have 0 accounting/finance experience so would be starting from scratch there in employment - hence not expecting more than about £20-25k at best.  Not sure I'd be happy doing other people's books due to no experience. I suppose ideally I can find a 1 day a week part time job to get some experience, while still working 4 days in my current position.  

Side hustle not really an option at the moment as I have little time left over after work and commute and studying, (and sometimes have to work Saturdays too).  After I'm qualified and take a break for a bit of "me time" I will think more about job opportunities.

Thanks for the encouragement and links to "useful stuff to read" folks No thanks to my housing association whose "welcome to your £20+ a month rent increase from April" letter arrived today

One other thing that occurred to me was trying to find a council swap with someone that DOES have the right to buy - again, something to pursue when I have a little more free time.

I'm sure it'll all work out in the end.... (think positive)

AlanP_2

An alternative to film and TV industry is to move in to the public sector, working in finance. 

Access to a good DB pension which will give you guaranteed retirement income.