Worried sick about low pension balance

Myrtle77

I'm 47 and worked almost non-stop since graduating. I've been paying into the pensions of of the various places I've worked over the years, and looking at the combined balance of these pensions I'm terrified. All those years, and it all adds up to less than £30k.

A recent guide I read said I should have about £200k in there by now in order to afford a reasonable retirement. I'm in a single income household, just gone self-employed, moderate debt, no property to my name, no kids to care for me when I'm older, and getting seriously concerned. Any advice on conquering the anxiety?

kimwp

Best thing is to work out what you need in retirement, rather than going by a number in a guide. As a first step, fill out a statement of affairs (link in my signature) or use the mse budget sheet, with your spend from the last year. Then modify it by taking off things you won't be spending on in retirement, and add for additional things you will be spending on. Then come back here with the retirement income you think you will need.

NB, if you are in debt and not paying it down quickly, it's worth popping over to the debt free wannabe board.

Bostonerimus1

How much are you contributing to your pension?...a goal of 10% of gross income is a good one. How is your pension invested and what fees are you paying? Do you have any Define Benefit Pensions? What is your NI record like? You mentioned something about "self-employment" make sure you sort out continuing NI contributions.

kempiejon

Myrtle77 said:

I'm 47 and worked almost non-stop since graduating. I've been paying into the pensions of of the various places I've worked over the years, and looking at the combined balance of these pensions I'm terrified. All those years, and it all adds up to less than £30k.

A recent guide I read said I should have about £200k in there by now in order to afford a reasonable retirement. I'm in a single income household, just gone self-employed, moderate debt, no property to my name, no kids to care for me when I'm older, and getting seriously concerned. Any advice on conquering the anxiety?

So you've made a start. That's good. Keep paying into the pension but I think a good idea is to now look at where it is invested and what it costs you. Too late to do anything about the previous performance but work out what you're doing now and compare it to a low cost global investment.

Another poster suggested 10% of gross income, a guide but if you have "modest" debts that should be addressed. No property in your name suggests no mortgage, really a mortgage is the only sort of debt that is acceptable for the financially secure. Generally you're retirement pot will grow quicker if you clear your debts and redirect your payments to your pension.
Check your pensions/NI record here https://www.gov.uk/check-national-insurance-record

I've never understood the idea that kids are to look after you but if that's part of the plan you should start looking...

I made a 15 year plan to financial independence, it took a couple more years than that to get just right but if you started now you could be ready by 67/8/9 when you'll hopefully be getting your state pension.
If the anxiety is the kick you need to make a plan it's a good thing.

Linton

Myrtle77 said:

I'm 47 and worked almost non-stop since graduating. I've been paying into the pensions of of the various places I've worked over the years, and looking at the combined balance of these pensions I'm terrified. All those years, and it all adds up to less than £30k.

A recent guide I read said I should have about £200k in there by now in order to afford a reasonable retirement. I'm in a single income household, just gone self-employed, moderate debt, no property to my name, no kids to care for me when I'm older, and getting seriously concerned. Any advice on conquering the anxiety?

I find it difficult to see how you can only have £30k in your pension as a graduate having been employed and a member of your employers schemes for say 25 years.  A salary of £30k and an employer contribution of 3% on its own ignoring any contributions from yourself should easily have given you £50k plus.

Were you on comparatively low pay, minimum wage or near to it? What % contributions did you and your employer make to your pensions? Were you ever in a DB (eg final salary) scheme perhaps as a government or local authority employee?
Perhaps there is some confusion somewhere.

dunstonh

I'm 47 and worked almost non-stop since graduating. I've been paying into the pensions of of the various places I've worked over the years, and looking at the combined balance of these pensions I'm terrified. All those years, and it all adds up to less than £30k

The simple fact is that if you pay in peanuts, you get back peanuts.    No matter what you do, the single biggest thing when it comes to saving money is the amount you save.

I have known people that started £30pm in 1988, which was a very good contribution back then but failed to increase it each year with inflation and are still paying £30pm today.   They completely blew their good start.

Or others that start a pension with a minimum contribution just to tick the box to say "pension: done" without any thought on the amount being totally unsuitable.

I had someone yesterday ask me what the minimum contribution they could pay.  I lied and said £100pm  and then pointed out that £100pm is completely pointless for them.   They were paying more per month on their Sky subscription then they wanted to pay into the pension.   

If you don't take saving seriously, then it will catch up with you and you are looking at a retirement of 25-30 years with low income.  That comedown can be a massive shock if you live a consumer lifestyle in your working life.

A recent guide I read said I should have about £200k in there by now in order to afford a reasonable retirement. I'm in a single income household, just gone self-employed, moderate debt, no property to my name, no kids to care for me when I'm older, and getting seriously concerned. Any advice on conquering the anxiety?

For context, having around £35k by age 35 is another often-mentioned benchmark.   

As it stands, your £30k is good for just over £1000 pa income in today's terms.  Hopefully, it will be a bit better than that unless you have selected a deposit fund or bonds fund for your pension investments.  But its a quick and dirty guide to your current position.   With a state pension of around £11.5k (assuming you get full qualification), you are looking at a retirement income of around £12.5k per annum in today's spending power.

If you earn £15k a year, you may not think that is too bad.  If you earn £50k a year, then you are in for a horrible change in living standards.

You have around 20 years to do something about increasing that.  Its not too late but you need to take it seriously before it is.

Sometimes, people misread their figures on pensions.  So, double check what you have in case you have misread.

Marcon

Myrtle77 said:

I'm 47 and worked almost non-stop since graduating. I've been paying into the pensions of of the various places I've worked over the years, and looking at the combined balance of these pensions I'm terrified. All those years, and it all adds up to less than £30k.

This makes no sense. Are you looking at defined contribution schemes, or a mix of defined benefit (aka final salary, or possibly CARE) and adding the wrong numbers?

m_c_s

Myrtle77 said:

I'm 47 and worked almost non-stop since graduating. I've been paying into the pensions of of the various places I've worked over the years, and looking at the combined balance of these pensions I'm terrified. All those years, and it all adds up to less than £30k.

A recent guide I read said I should have about £200k in there by now in order to afford a reasonable retirement. I'm in a single income household, just gone self-employed, moderate debt, no property to my name, no kids to care for me when I'm older, and getting seriously concerned. Any advice on conquering the anxiety?

What profession are you in? Have you been employed in public service for all or part of your time since graduating? 
If you can post details of your pension scheme(s) and approx salary and contribution rates then that will help to inform what £30k actually means and will allow better feedback on this forum.

BlackKnightMonty

Do you mean you will be paid £30k p/a on todays terms?

If so, that’s pretty good!

Myrtle77

I've spent my whole life working in the charity sector where pay and pensions are notoriously poor. I've also spent most of my adult life caring for my mother. Even though I achieved Senior Management roles, money was always tight. Judgements about not 'prioritising' savings? Well that's a privilege some have, but others don't, so please keep such nonsense to yourself.

No, I won't 'start looking' for someone to have children with at 47 - what a disgusting response! You've no idea why I don't have them.

There's some useful advice in here, but sadly a hell of a lot of judgement, belittling and one-upmanship. Thanks to those that took the time with the former, but I'm stepping away from the thread because of the latter. I came for help, not to give nitwits and excuse to make themselves feel good by being unpleasant. Perhaps those individuals should question what they're on MSE Forums for . . .

kimwp

Myrtle77 said:

I've spent my whole life working in the charity sector where pay and pensions are notoriously poor. I've also spent most of my adult life caring for my mother. Even though I achieved Senior Management roles, money was always tight. Judgements about not 'prioritising' savings? Well that's a privilege some have, but others don't, so please keep such nonsense to yourself.

No, I won't 'start looking' for someone to have children with at 47 - what a disgusting response! You've no idea why I don't have them.

There's some useful advice in here, but sadly a hell of a lot of judgement, belittling and one-upmanship. Thanks to those that took the time with the former, but I'm stepping away from the thread because of the latter. I came for help, not to give nitwits and excuse to make themselves feel good by being unpleasant. Perhaps those individuals should question what they're on MSE Forums for . . .

@myrtle77, the work on finding children advice was a bit lacking in awareness, but a lot of people don't know how much of a raw subject this can be. Otherwise it's just been factual statements, albeit quite bluntly stated. If you want help with understanding your pension situation, this is a good place. If you take umbrage easily, the internet is not the place to ask for advice and an independent financial advisor or similar might be a good idea 

The good thing is, that if you are used to living frugally, then you don't need £200k in addition to your state pension.