Success Stories - Pensions



  • sho_me_da_money
    sho_me_da_money Forumite Posts: 1,670
    Part of the Furniture 1,000 Posts Combo Breaker
    Such great stories everyone. Glad I started this thread as it really helps a lot of fellow community members.
  • Pat38493
    Pat38493 Forumite Posts: 2,233
    Ninth Anniversary 1,000 Posts Name Dropper Combo Breaker

    I think the key advise I would give anyone is once you have an emergency fund in place get as much as possible into your pension.
    Although this is probably not a popular view for standard financial advice, my emergency fund is pretty much zero.  I am the same age as you 54 and my reasoning is, next year I will have access to pension funds and I guess it would only take a few weeks to get some money out of one or other of my DC pots.

    I don't have debts other than mortgage, but I also have credit cards with large credit limit and overdraft limit in place.  Therefore my emergency fund for any emergency that requires the money within days is to go into short term debt.

    I suppose technically I do usually have a few grand more in my bank and savings accounts than what I need for the current month, so I guess you could argue that I have a month or two of capacity but in my thinking, that is "accruals" for costs that I know will happen later this year.

    Any money you have in an emergency fund is not invested so I see it as opportunity lost there.
  • ex-pat_scot
    ex-pat_scot Forumite Posts: 675
    Tenth Anniversary 500 Posts Photogenic Name Dropper
    I'm with Pat.
    No emergency fund at the moment but lots going into the DC pot, and not long until I can use my pension as my emergency fund if required.
    I'm on 3 months' notice, plus I have a couple of months of accrued holiday.
    That would leave me 6 months of exposure max. 
    In reality, I'd have to finish off the year's planned work before I left, so would be "safe" until Jan and still have 2 months of accrued holiday.
    It's not ideal, but we have huge drains on our day to day finances (school fees, university support, college fees) and a hefty renovation programme.
  • handful
    handful Forumite Posts: 472
    Part of the Furniture 100 Posts Name Dropper Combo Breaker
    I'm in the fortunate position of having a modest DC pension pot of around £300k + a DB of around £4k but recently received news of an unexpected inheritance (but not received yet) of about £260k ish. I was already thinking about when I could retire and this makes it possible far sooner at the spending level that I wanted to try and maintain.  Apart from paying off the last bit of my mortgage (about £38k on property value of £625k) and a further £25k of HP on a motorhome I should still be able to invest enough to allow retirement in the next couple of years.
  • noclaf
    noclaf Forumite Posts: 874
    Tenth Anniversary 500 Posts Name Dropper
    I've never 'properly' tracked my DC pensions performance taking into account varying contributions over a period of time but FWIW below are snapshots of my pensions 'total value' at points in time. This story isn't done yet but onwards and (pray/ fingers crossed) upwards in value too...well come retirement anyway!

    Oct14 £17.5k
    Nov20 £85k
    Jan21 £90k
    Oct21 £111k
    Nov21 £121k
    Jun22 £117k
    May23 £140k
  • DT2001
    DT2001 Forumite Posts: 710
    Fifth Anniversary 500 Posts Name Dropper
    I have a DB pension paying £9k p.a. having worked from leaving school for 17 years for Barclays. The pension came into payment at 51 1/2. I have been a self employed stay at home Dad for the last 20+ years except for a stint as a company director. I have a SIPP  which had £5k in it until 2015 when I received a bonus on the sale of a business which with the help of an IFA I ‘salary sacrificed’ utilising carry forward and George Osborne’s realignment of pension year dates. This has grown by 4-5 % annualised. Whilst many have done better, I’m sure, it has achieved my goal of being able to produce, combined with my DB and SP (and near cash to cover the gap to SPA) an income of circa £30k. My OH continues to enjoy her work hence we have not retired. She has a smaller DB but a growing SIPP (as in still contributing). 
    With children and a foreign property, pensions have not been our priority until our 50’s however living well below our means whilst still travelling a lot has allowed us to quickly build pots with enough to retire whenever.
    WYSPECIAL Forumite Posts: 583
    Part of the Furniture 500 Posts Name Dropper Combo Breaker
    Originally in a DB employer scheme. Started paying AVC’s aged about 30 not with any early retirement plan in mind, just didn’t like seeing large chunks deducted for tax, especially the higher rate bit.

    DB scheme was eventually scrapped and changed to DC. Fairly generous sweeteners were paid into DC pot to start it off. Took redundancy aged 55 and accessed DB as the reduced amount plus SP will be more than enough for my needs when I get to 67. Took a part time job with no intention of working full time again. Really enjoyed the job so boredom during Covid and a full time opportunity saw me signing a full time contract again.

    With the DB income plus full time salary the majority of it ends up being saved into a DC pot. Not sure when I’ll pull the plug and retire, or look at part time again, but knowing I can do it at anytime and live the, fairly simple, lifestyle I am happy with is enough for me. I work because I want to not because I have to.
  • GunJack
    GunJack Forumite Posts: 11,650
    Part of the Furniture 10,000 Posts Name Dropper Photogenic
    edited 27 May at 10:20AM
    After my company decided (after a short-ish consultation period) to replace our DB CARE scheme as of April 2024 with a (reasonably generous) DC scheme, I thought I'd better have a quick whip over my figures:-

    All at today's values....

    1. DB1 - Civil Service 20 years-worth - £12k pa full CPI-linked in deferement and payment, payable at 60 with no actuarial reduction.

    2. DB2 - current employer 16 yrs     - £9400pa with final year's service is added, will be preserved to 65 at CPI+1% (max 5%) with no actuarial reduction.

    3. Full SP                                             - £10.6k

    and around 7 years-worth of 23% of salary (9 me, 14 employer) to bridge between actual retirement (hoping at 62) and second DB becoming due. Both DBs come with lump sums (36 and 54k respectively) and Mrs.G-J will have full SP as well, giving a total at today's rates £42.6k p.a. We should be ok barring any major disasters!! I'm 55, she's 54.

    One thing to note, however:-

    having DB pensions is great for guaranteed income later, it's also very inflexible compared to DC, which many on this forum seem to (conveniently maybe??) forget. 
    ......Gettin' There, Wherever There is......

    I have a dodgy "i" key, so ignore spelling errors due to "i" issues, ...I blame Apple :D
  • DT2001
    DT2001 Forumite Posts: 710
    Fifth Anniversary 500 Posts Name Dropper

    One thing to note, however:-

    having DB pensions is great for guaranteed income later, it's also very inflexible compared to DC, which many on this forum seem to (conveniently maybe??) forget. 
    There are pluses and minuses for both and DB pensions come in various guises. Mine at 65 becomes all GMP with half increasing by CPI (max 3%) and half with no increase. It was flexible as I drew at 51 1/2. 
    Overall I do agree that DC pensions are more flexible and you can use part to buy an annuity (for life, fixed term, level etc) to give you guaranteed income.
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