Was impact of 2008/9 financial crisis as bad as current events on Pensions?

Workerdrone

It does get easier with each crash.   Your first one can be extremely worrying.   Your second one less so. By your third or fourth it becomes a bit "here we go again".

Wise words. I have often seen it recommended here not to check your funds ever day, but for some, myself included its a bit of an obsession. The one positive I can draw from it is you get a real sense of the ups and downs. I wasn't specifically tracking things back during the 2008 GFC but I can look back and see from my history than in 2008 I was down 40%. Last December my fund was up 600% from the 2008 lows. (This is an old fund I don't contribute to). Its presently up 500% from 2008 lows. Im sure by the time the next crash comes around I'll be a lot less concerned having been through the wringer a couple of times.

Workerdrone

I have considered that many times. Of course buying into investments when their unit price is lower means more shares for less £. I never used to look at my DC pension, which I have been contributing to for 5-years. But I have done so daily since 1st Jan, making a note of the pot value, the increase or decrease. Every day. (planned retirement not far off) That has made me more aware of what is going on than ever before. I am sure that is why I am likely more concerned than I possibly should be. It's just hard justifying sticking in £3.5k every month + an annual bonus (contribution carry forward allows me to exceed £40k p.a.) and then seeing my pot value often worth less than it was prior to my last contribution. One step forward, 2 back.

I guess I have to hope world events calm down. But even then, I think it will be a couple of years at least for some form of normality to return to markets. I don't want to be working into my mid/late 60s, but necessity may dictate otherwise.

I absolutely understand your position, although I am only able to scrape together £1500 a month contributions (Not a fab wage), I do check every day. It's annoying to see the pot standing still. I've got 14 years until I'm 60. I can work beyond that if needed. I look forward to the eventual recovery when the sensible advice to hold firm and keep buying units at a lower price bears fruit.

NannaH

I’m sorry but someone able to put £1500 a month into a pension at age 46, (presumably with a mortgage and a youngish family ?)  isn’t ‘scraping it together’, most people on average wages only contribute that in a Year!
My 33 y/o daughter is on a very decent £50k and struggles with her 12% contributions to the TPS, especially with the cost of living spiralling. 

Workerdrone

NannaH said:

I’m sorry but someone able to put £1500 a month into a pension at age 46, (presumably with a mortgage and a youngish family ?)  isn’t ‘scraping it together’, most people on average wages only contribute that in a Year!
My 33 y/o daughter is on a very decent £50k and struggles with her 12% contributions to the TPS, especially with the cost of living spiralling. 

Depends where you live in the country and how you structure your finances. For us its, 46, married, wife also 46. She's a band 7 nurse (moved up fairly recently) so on around 42k after enhancements. My wage just went up to £37.5k. Two adopted kids 13 and 11. I had to give up any hope of career progress when we got them due to the neglect and trauma they suffered so I work from home and plod, hence my username workerdrone. 86k mortgage on £190k house which finishes in 2036 but likely sooner as offset fixed at 2.75% until December 2026 (live in north east England). Wife pays mortgage and critical illness insurance and own expenses, I pay household bills, gas,elec,tel, water, council tax insurance etc plus own expenses and small £220 loan on caravan. £50 a month into company share scheme which hopefully will mature and go toward a 25th wedding anniversary holiday. We each put £210 a month into a joint "food purse" account for groceries. Run two cars owned outright but I work from home so low miles. We also put £911 per month into a savings pot tied to the offset mortgage. This is split into pots for things like holiday, new car, Christmas, car maintenance, kids clothes etc. Accounts runs at between £28k and £35k depending on larger outgoings. No credit card or other debt. Do have a card, with 10k limit in case we are ever in America and caught out with a health emergency. Both credit scores of 999. Pension is sal sac. I put in 33% my company puts in 10% so around £1338 a month into mine. I then put £120 into a separate pension for her to bridge the gap between her retiring at 60 on 1995 section and her 2015 section coming in. Gov tops that up to £150 so total just shy of £1500 per month into pensions. Our finances are worked so we have around £350 each disposable income per month. Every year or so we review this as her wage differs month to month. We work out her average then massage the amount going into savings so we each end up with equal spare money. We shop as Aldi, make use of bluelight discounts, batch cook. Lots of short caravan breaks. Done Disney twice and Morocco with the kids, Europe next year. Used to do the carribean when there was just the two of us. Been an active moneysaver since reading Martins book, the money diet. Review direct debits every time they come up and swap companies. Only real luxury which is a terrible indulgence is daily coffee run even though I have a machine at home. I just need to get away from the house with working and living here for 20 mins or so.

So yes, it is a case of scraping it together. Ive not allowed my outgoings to expand to fit my income for the last 8 years. Every increase in tax allowance, every inflationary pay rise, every few pounds of savings on a DD has just slowly gone onto pension so I don't feel it. 

How contributions have risen since 2012 when I got serious

£372.16

£379.66

£418.80

£436.05

£440.49

£450.45

£534.54

£562.67

£573.93

£602.63

£645.33

£674.67

£704

£762.67

£778.06

£802

£828.93

£831.92

£843.89

£921.70

£1059.35

£1080.30

£1110.22

£1113.22

£1223.94

£1241.89

£1250.87

£1300.89

£1338.24

Plus started building the £150 into wife’s HL back in 2019

The way I look at it is incremental. I'm at £1338.24 now. My next little bump is up to £1350 so £12.Well really £9.60 as the tax saving will take it up to £12. So every time I renew a DD I try to improve on the rate offered. It might save a couple of quid on my car insurance so that goes into pension. In January I can switch my 2 years unlimited data mobile package (use it for caravan broadband so need to be unlimited with 2 kids) Currently £20 on three. I can pay £16 with smarty (also three) or £15 with ASDA (vodaphone although limited to 2mb download speed). 

Of course with rising costs I can't always make a nett saving, but even if I can keep the cost the same I still save the amount I would have lost. eg. Say I pay £20 for a bill. My renewal will go up to £22, or I can switch companies and still pay £20. I switch companies and put the £2 I would have lost anyway into pension.

It's just a bit of a game and addictive one, but one I quite enjoy. I suppose Im quite a deep thinker and planner by nature. Some people are just more relaxed about money.

It wasn't always this way. I was married before to a very financially disorganised first wife. Part qualified accountant who insisted on running all the household finances. I assumed that meant she was capable. I worked away a lot during the week so she dealt with the mail etc. Trouble is I didn't realise she was running up a lot of debt in my name £42k to be precise. All came to a head when bailiffs started visiting during the times I was home for missing council tax etc and I started getting phone calls re missing mortgage payments. Put the house up for sale, she had an affair, I moved out, she wouldn't budge so had to ask the judge to grant repossession to the mortgage company to get her out. She wasn't going to budge and kept making Anna Sorkin type promises she would take over the mortgage, meanwhile the debt was increasing. Lost my £35k equity in the house when the mortgage company sold it off cheap. Lived very frugally for the next 3 years. Fortunately managed to put £250 a month into new employers share scheme which paid off and cleared my debts. Funny thing. A few years later she made front page of the local papers for embezzling £87k from a company she was working for and went to prison. Karma. Im not bitter, just a very useful life lesson learned.

So yes, scraping together is the right word. Its been a long road, but as you can probably see from my experiences, one I choose to tread as I don't want to be poor again.

anonmoose

Worker drone a joint salary of £80k is good especially in an area that house prices are so low! 

I am also 46 and we are on jointly slightly less than you with 2 kids. Our mortgage was over £210k until recently when an inheritance has allowed us to pay it down closer to £140k. 

We are now paying in £1500 a month between us into pensions but before reducing our mortgage with the  inheritance  that wouldn't have been possible. 

I think you are doing a great job I am not criticising, but you have to accept what a fortunate position you are in. You are on a good salary in a cheap part of the country.

Altior

I keep reading on these types of threads that markets will bounce back, don't worry about it, we've seen it all before et al.

But the kind of global debasement of fiat currency that lockdown hysteria created, I don't think we have seen before. We can look to Japan, who historically have done mass QE in isolation, and there it took three decades to recover.

I don't think anyone knows what damage and scarring this has done, or at least, if they do they don't want to talk about it. The market valuations at the end of 2019 are my benchmark, as with two years of covid neuroticism and now war disrupting commodities, I don't feel anyone can say we are in a stronger position now, than at 2019. 

We have massively pumped up asset prices, embedded inflation, climate / net zero hysteria is unrelenting, and no prospect of significant growth in the major western economies. I feel mirroring Japan is actually most likely, as in desperation politicians will always reach for the money printer. And as we have seen in the UK, culturally, young westerners with access to social media and 24 hr brainwashing 'news' feeds have absolutely no stomach to face up to the reality of the situation, and even live to current means, never mind start to pay off what has been added to the vast debt mountains. Delightfully exhibited by mass panic because mortgage interest rates have finally threatened to normalise after several years of unsustainable cheap borrowing.

So while markets could well spring back as they have done many many times through history, I feel it is quite dangerous to consider that as a certainty this time around. 
 

Cien

Workerdrone said:

NannaH said:

I’m sorry but someone able to put £1500 a month into a pension at age 46, (presumably with a mortgage and a youngish family ?)  isn’t ‘scraping it together’, most people on average wages only contribute that in a Year!
My 33 y/o daughter is on a very decent £50k and struggles with her 12% contributions to the TPS, especially with the cost of living spiralling. 

Depends where you live in the country and how you structure your finances. For us its, 46, married, wife also 46. She's a band 7 nurse (moved up fairly recently) so on around 42k after enhancements. My wage just went up to £37.5k. Two adopted kids 13 and 11. I had to give up any hope of career progress when we got them due to the neglect and trauma they suffered so I work from home and plod, hence my username workerdrone. 86k mortgage on £190k house which finishes in 2036 but likely sooner as offset fixed at 2.75% until December 2026 (live in north east England). Wife pays mortgage and critical illness insurance and own expenses, I pay household bills, gas,elec,tel, water, council tax insurance etc plus own expenses and small £220 loan on caravan. £50 a month into company share scheme which hopefully will mature and go toward a 25th wedding anniversary holiday. We each put £210 a month into a joint "food purse" account for groceries. Run two cars owned outright but I work from home so low miles. We also put £911 per month into a savings pot tied to the offset mortgage. This is split into pots for things like holiday, new car, Christmas, car maintenance, kids clothes etc. Accounts runs at between £28k and £35k depending on larger outgoings. No credit card or other debt. Do have a card, with 10k limit in case we are ever in America and caught out with a health emergency. Both credit scores of 999. Pension is sal sac. I put in 33% my company puts in 10% so around £1338 a month into mine. I then put £120 into a separate pension for her to bridge the gap between her retiring at 60 on 1995 section and her 2015 section coming in. Gov tops that up to £150 so total just shy of £1500 per month into pensions. Our finances are worked so we have around £350 each disposable income per month. Every year or so we review this as her wage differs month to month. We work out her average then massage the amount going into savings so we each end up with equal spare money. We shop as Aldi, make use of bluelight discounts, batch cook. Lots of short caravan breaks. Done Disney twice and Morocco with the kids, Europe next year. Used to do the carribean when there was just the two of us. Been an active moneysaver since reading Martins book, the money diet. Review direct debits every time they come up and swap companies. Only real luxury which is a terrible indulgence is daily coffee run even though I have a machine at home. I just need to get away from the house with working and living here for 20 mins or so.

So yes, it is a case of scraping it together. Ive not allowed my outgoings to expand to fit my income for the last 8 years. Every increase in tax allowance, every inflationary pay rise, every few pounds of savings on a DD has just slowly gone onto pension so I don't feel it. 

How contributions have risen since 2012 when I got serious

£372.16

£379.66

£418.80

£436.05

£440.49

£450.45

£534.54

£562.67

£573.93

£602.63

£645.33

£674.67

£704

£762.67

£778.06

£802

£828.93

£831.92

£843.89

£921.70

£1059.35

£1080.30

£1110.22

£1113.22

£1223.94

£1241.89

£1250.87

£1300.89

£1338.24

Plus started building the £150 into wife’s HL back in 2019

The way I look at it is incremental. I'm at £1338.24 now. My next little bump is up to £1350 so £12.Well really £9.60 as the tax saving will take it up to £12. So every time I renew a DD I try to improve on the rate offered. It might save a couple of quid on my car insurance so that goes into pension. In January I can switch my 2 years unlimited data mobile package (use it for caravan broadband so need to be unlimited with 2 kids) Currently £20 on three. I can pay £16 with smarty (also three) or £15 with ASDA (vodaphone although limited to 2mb download speed). 

Of course with rising costs I can't always make a nett saving, but even if I can keep the cost the same I still save the amount I would have lost. eg. Say I pay £20 for a bill. My renewal will go up to £22, or I can switch companies and still pay £20. I switch companies and put the £2 I would have lost anyway into pension.

It's just a bit of a game and addictive one, but one I quite enjoy. I suppose Im quite a deep thinker and planner by nature. Some people are just more relaxed about money.

It wasn't always this way. I was married before to a very financially disorganised first wife. Part qualified accountant who insisted on running all the household finances. I assumed that meant she was capable. I worked away a lot during the week so she dealt with the mail etc. Trouble is I didn't realise she was running up a lot of debt in my name £42k to be precise. All came to a head when bailiffs started visiting during the times I was home for missing council tax etc and I started getting phone calls re missing mortgage payments. Put the house up for sale, she had an affair, I moved out, she wouldn't budge so had to ask the judge to grant repossession to the mortgage company to get her out. She wasn't going to budge and kept making Anna Sorkin type promises she would take over the mortgage, meanwhile the debt was increasing. Lost my £35k equity in the house when the mortgage company sold it off cheap. Lived very frugally for the next 3 years. Fortunately managed to put £250 a month into new employers share scheme which paid off and cleared my debts. Funny thing. A few years later she made front page of the local papers for embezzling £87k from a company she was working for and went to prison. Karma. Im not bitter, just a very useful life lesson learned.

So yes, scraping together is the right word. Its been a long road, but as you can probably see from my experiences, one I choose to tread as I don't want to be poor again.

Thank you for sharing this. I always wondered how people can manage such large contributions every month but over time you make it look very easy.
Glad to hear your ex got the karma they deserved!

Workerdrone

anonmoose said:

Worker drone a joint salary of £80k is good especially in an area that house prices are so low! 

I am also 46 and we are on jointly slightly less than you with 2 kids. Our mortgage was over £210k until recently when an inheritance has allowed us to pay it down closer to £140k. 

We are now paying in £1500 a month between us into pensions but before reducing our mortgage with the  inheritance  that wouldn't have been possible. 

I think you are doing a great job I am not criticising, but you have to accept what a fortunate position you are in. You are on a good salary in a cheap part of the country.

Oh I do count my blessings. Chiefly amongst them is when I got together with my wife (i.e second marriage), she still had a house. I suppose I could say had it not been for my earlier experiences we would be in an even better position, but hey ho. I don't take offence but NannahH's comment was "I’m sorry but someone able to put £1500 a month into a pension at age 46, (presumably with a mortgage and a youngish family ?)  isn’t ‘scraping it together". She then goes on to say her 33 year old daughter is on 50k but doesn't mention if there's a partner etc. I was simply seeking to illustrate how we structure our finances and how I've built that amount up over the years through a change in attitude to handling money. Ive been with my current employer 15 years and started on 23k, wife was on band 5 salary of around 18k back then. Of course I don't take it as criticism but fortunate is a word with connotations of blessed, lucky, charmed etc. I've certainly had more than my share of financial and life misfortune. My current circumstances are as a result of specific planning and preferences on my part largely as a result of being burned. I did choose not to go to university as I felt is was very much being overdone at the time and foresaw a glut of graduates with debts, hence I never acquired student debt. I am not attracted to the cosmopolitan nature of cities and am quite a home bird so I stayed in the county I was born. Im not sure if being born in one of the poorer parts of the country could be considered fortunate or unfortunate, certainly fortunate in terms of affordable property but likely cancelled out by up until now generally lower earnings potential. Whilst as I say I don't take offence at her comment and comparison with her daughter situation, her comment is denigrating to those of us who plan finances carefully. It rather smacks of "I couldn't do it, therefore you somehow had it easy". My rather long reply was to illustrate that a.) Ive not had it easy and b.) How I got to where I am by "scraping it together". I have friends on very good money who bitterly complain they'll never get to take their kids to Disney, but they eat out several times and week keep buying 60k cars on pcp and are always clothes shopping. It's about choices.

Grumpy_chap

I'm in much the same position as the OP - currently maxing out pension contributions and the fund value has fallen by more than the contributions over the period.
It is hard to keep faith, but I see it as I am buying "cheap" units and they'll bounce back spectacularly.  It evens becomes a case of being in the right place at the right time, insofar as my circumstances meant I was maxing contributions at the time of the fall.

carrspaints said:

someone contributing so much of my salary to my pension, whilst living on the sniff of an oil rag. 

A sensible balance needs to be taken between living for today and planning for the future.  Both from a practical level and from a tax level.  No point in sacrificing income now to the point of avoiding basic rate tax only to then have a massive pension in the future that suffers higher rate tax.

anonmoose

Workerdrone said:

anonmoose said:

Worker drone a joint salary of £80k is good especially in an area that house prices are so low! 

I am also 46 and we are on jointly slightly less than you with 2 kids. Our mortgage was over £210k until recently when an inheritance has allowed us to pay it down closer to £140k. 

We are now paying in £1500 a month between us into pensions but before reducing our mortgage with the  inheritance  that wouldn't have been possible. 

I think you are doing a great job I am not criticising, but you have to accept what a fortunate position you are in. You are on a good salary in a cheap part of the country.

Oh I do count my blessings. Chiefly amongst them is when I got together with my wife (i.e second marriage), she still had a house. I suppose I could say had it not been for my earlier experiences we would be in an even better position, but hey ho. I don't take offence but NannahH's comment was "I’m sorry but someone able to put £1500 a month into a pension at age 46, (presumably with a mortgage and a youngish family ?)  isn’t ‘scraping it together". She then goes on to say her 33 year old daughter is on 50k but doesn't mention if there's a partner etc. I was simply seeking to illustrate how we structure our finances and how I've built that amount up over the years through a change in attitude to handling money. Ive been with my current employer 15 years and started on 23k, wife was on band 5 salary of around 18k back then. Of course I don't take it as criticism but fortunate is a word with connotations of blessed, lucky, charmed etc. I've certainly had more than my share of financial and life misfortune. My current circumstances are as a result of specific planning and preferences on my part largely as a result of being burned. I did choose not to go to university as I felt is was very much being overdone at the time and foresaw a glut of graduates with debts, hence I never acquired student debt. I am not attracted to the cosmopolitan nature of cities and am quite a home bird so I stayed in the county I was born. Im not sure if being born in one of the poorer parts of the country could be considered fortunate or unfortunate, certainly fortunate in terms of affordable property but likely cancelled out by up until now generally lower earnings potential. Whilst as I say I don't take offence at her comment and comparison with her daughter situation, her comment is denigrating to those of us who plan finances carefully. It rather smacks of "I couldn't do it, therefore you somehow had it easy". My rather long reply was to illustrate that a.) Ive not had it easy and b.) How I got to where I am by "scraping it together". I have friends on very good money who bitterly complain they'll never get to take their kids to Disney, but they eat out several times and week keep buying 60k cars on pcp and are always clothes shopping. It's about choices.

Totally understand what you are saying with this.  

With regards to university though I am your age and I went and came out with just £3k student loan which I had used to buy a £3k car.

Back then this was possible as I was the last year I think to get no student fees and a grant. I even ran a car throughout my time at uni.

And no I didn't get a single penny financially from my parents but I worked full time every holiday in an office. So uni could be done back then with no debts if you cut your cloth and worked full time in your time off.