Worried sick about low pension balance

german_keeper

Marcon said:

ILoveSkaMusic said:

Just thinking about it, as i'm a similar age. There's a very strong chance that much of OP's working life has been spent without paying into any workplace pension simply because they weren't a legal requirement until the tail end of 2012.  

I know that I have to make increased contributions to make up for lost time.

That's already been suggested - as you say, there's a strong chance OP may not have been in as many schemes as she believes. Pity @Myrtle77 doesn't seem to have come back to take advantage of the helpful comments on this thread, especially the post of 7 August from @universidad which is both informative and should make her feel better.

When we have seen the worst side of human behaviour these last couple of weeks (not making any judgement of either "side" by the way) it's a real shame that the better side of human behaviour, decent people just doing their best to help others, appears to have drawn a blank. Come on Myrtle get back on board!!  

Mutton_Geoff

Although I read a lot of posts where people say they prioritised paying the mortgage off (eg by age 50) then start serious pension saving, this is not necessarily the right thing to do.

Compound interest and investment market patterns mean early pension contributions are going to do the most "Heavy lifting" for you.

I was in my late 30s before I took pension saving seriously but once I viewed it as deferred salary and my own responsibility, I contributed 30-50% of my salary for almost 30 years. This left me with a much lower income to live on but now I've retired, my pension is equivalent to my net salary and it feels like I just stopped working but still being paid a full salary.

It took a serious amount of effort to get to with lots of overtime, renting out spare rooms in my house etc but from a new retirees point of view, it was well worth it.

https://www.telegraph.co.uk/finance/personalfinance/investing/10742396/When-saving-for-10-years-pays-more-than-saving-for-40.html

FIREDreamer

Mutton_Geoff said:

Although I read a lot of posts where people say they prioritised paying the mortgage off (eg by age 50) then start serious pension saving, this is not necessarily the right thing to do.

Compound interest and investment market patterns mean early pension contributions are going to do the most "Heavy lifting" for you.

I was in my late 30s before I took pension saving seriously but once I viewed it as deferred salary and my own responsibility, I contributed 30-50% of my salary for almost 30 years. This left me with a much lower income to live on but now I've retired, my pension is equivalent to my net salary and it feels like I just stopped working but still being paid a full salary.

It took a serious amount of effort to get to with lots of overtime, renting out spare rooms in my house etc but from a new retirees point of view, it was well worth it.

https://www.telegraph.co.uk/finance/personalfinance/investing/10742396/When-saving-for-10-years-pays-more-than-saving-for-40.html

Pretty much what I did, hammered my salary right down from 2008-2024 by salary sacrificing 80% to 70% into the pension to get down to minimum wage (contributions reduced as minimum wage increased faster than my salary). Bought an annuity with most of it and now retired at 60 with a pension about 50% higher than my manipulated salary. I have two DB from 1988 to 2005 also taken early. State pension fully accrued.

Looking at what I have left in drawdown (not included in the figures above), I could have gone at 55 but hey ho.

kempiejon

FIREDreamer said:

Pretty much what I did, hammered my salary right down from 2008-2024 by salary sacrificing 80% to 70% into the pension to get down to minimum wage (contributions reduced as minimum wage increased faster than my salary). Bought an annuity with most of it and now retired at 60 with a pension about 50% higher than my manipulated salary. I have two DB from 1988 to 2005 also taken early. State pension fully accrued.

Looking at what I have left in drawdown (not included in the figures above), I could have gone at 55 but hey ho.

I went a similar route over paying and stinting myself to pile it all into my SIPP. I paid the majority of my salary for most of my 40s. Although I am at the whim of the vagaries of my investment plan I have been checking my performance for a decade or more and my tested retirement income is greater than and has been rising faster than my employment remuneration. I could probably finish earlier but a bit of extra safety and a few issues at work kept me hanging about with my employer longer than strictly necessary.

prowla

Do you want to retire?

I've no plans to.

dunstonh

nicknameless said:

Marcon said:

Universidad said:

OP, there has been a lot less judgement in this thread than you think. Responses like "I find it difficult to see how you can only have £30k in your pension" are not criticisms because folks think you have done badly or planned badly. They are because it seems almost impossible that the figure could be that low, so people are really suspecting that you've misunderstood something, rather than that you've made poor choices. The truth is that we really don't know.

I'm going to give you the benefit of the doubt and assume that your snippy response was because you're as stressed about this as you say. So let me give you a bit of a worked example.

For example, let's assume pension contributions of the current legal minimum (8% overall) contributions, and we assume that your salary has been only £15,000 per year since you started on average ( a figure that would have been a low salary 20 years ago, and would be well below minimum wage for a full time worker today). Let's assume you have been working for 25 years, since you were 22 years old.

8% of that salary is 1200 pounds per year. Multiply that by 25, and the figure is 30,000.

So on the current legal minimum pension contribution and with a wage that seems unrealistically low, that's already at 30K - and that's before we account for the fact that the money in your pension will have been invested and has presumably performed better than cash with zero interest applied over that time.

Now it is possible your contributions were lower than 8% overall in the past, but even if they were, you'd probably expect to be above 30K at this point based on investment performance alone.

So that's why people are surprised at the figure. They're assuming something has been missed. Here are some possible examples:

1) You may have switched to a different pension fund at some point (for example, if/when you switched employers). If so, there may be another pension fund out there with your name on it. You can have more than one pension! Is it possible you're only looking at part of your overall pension savings?

2) If any of your pensions are of the Defined Benefit rather than Defined Contribution type, then you may actually find that the figure on those "pots" is actually what you'll recieve each and every year from retirement, rather than an amount that you need to use over your whole retirement. It's certainly not likely that this is the case today, but it could have been at the start of your career when DB schemes were more common.

3) Have you worked part time rather than full time?

4) Is is true that you have always contributed to a pension scheme?

At the end of the day most responses were from people assuming that you have more than 30K in your pensions simply because that is the most likely situation for anyone who has worked full time for 25 years and always paid in to their workplace scheme. However, if it is only 30,000 then although that is low, it is still a good start with plenty of time to get back on track. We regularly hear from people on these forums who have nothing and have always opted out, and are just starting to think about it in their 40s.

The good news is that if you are used to living on a very low amount, then a smaller than usual pension fund will keep you going for a lot longer than many people. So, as ever really, what you need for retirement will be an answer personal to you, and you shouldn't worry too much about comparing with others. 

As others have said, please do check your state pension forecast, and ensure you're in line for the maximum state pension that you can get. 

If you want further specific help, please try to answer the questions people are asking, rather than assuming that you know why they are being asked.

What a cracking good answer. I hope OP comes back (if only out of curiosity!) and reads it.

Marcon said:

Universidad said:

OP, there has been a lot less judgement in this thread than you think. Responses like "I find it difficult to see how you can only have £30k in your pension" are not criticisms because folks think you have done badly or planned badly. They are because it seems almost impossible that the figure could be that low, so people are really suspecting that you've misunderstood something, rather than that you've made poor choices. The truth is that we really don't know.

I'm going to give you the benefit of the doubt and assume that your snippy response was because you're as stressed about this as you say. So let me give you a bit of a worked example.

For example, let's assume pension contributions of the current legal minimum (8% overall) contributions, and we assume that your salary has been only £15,000 per year since you started on average ( a figure that would have been a low salary 20 years ago, and would be well below minimum wage for a full time worker today). Let's assume you have been working for 25 years, since you were 22 years old.

8% of that salary is 1200 pounds per year. Multiply that by 25, and the figure is 30,000.

So on the current legal minimum pension contribution and with a wage that seems unrealistically low, that's already at 30K - and that's before we account for the fact that the money in your pension will have been invested and has presumably performed better than cash with zero interest applied over that time.

Now it is possible your contributions were lower than 8% overall in the past, but even if they were, you'd probably expect to be above 30K at this point based on investment performance alone.

So that's why people are surprised at the figure. They're assuming something has been missed. Here are some possible examples:

1) You may have switched to a different pension fund at some point (for example, if/when you switched employers). If so, there may be another pension fund out there with your name on it. You can have more than one pension! Is it possible you're only looking at part of your overall pension savings?

2) If any of your pensions are of the Defined Benefit rather than Defined Contribution type, then you may actually find that the figure on those "pots" is actually what you'll recieve each and every year from retirement, rather than an amount that you need to use over your whole retirement. It's certainly not likely that this is the case today, but it could have been at the start of your career when DB schemes were more common.

3) Have you worked part time rather than full time?

4) Is is true that you have always contributed to a pension scheme?

At the end of the day most responses were from people assuming that you have more than 30K in your pensions simply because that is the most likely situation for anyone who has worked full time for 25 years and always paid in to their workplace scheme. However, if it is only 30,000 then although that is low, it is still a good start with plenty of time to get back on track. We regularly hear from people on these forums who have nothing and have always opted out, and are just starting to think about it in their 40s.

The good news is that if you are used to living on a very low amount, then a smaller than usual pension fund will keep you going for a lot longer than many people. So, as ever really, what you need for retirement will be an answer personal to you, and you shouldn't worry too much about comparing with others. 

As others have said, please do check your state pension forecast, and ensure you're in line for the maximum state pension that you can get. 

If you want further specific help, please try to answer the questions people are asking, rather than assuming that you know why they are being asked.

What a cracking good answer. I hope OP comes back (if only out of curiosity!) and reads it.

Here, here.

Also some regular posters do need to read back what they write before they post, especially a particular regular poster and IFA whose posts IMHO, and as politely as I can say, whilst often very informative, can be equally condescending.

If anyone has a problem with my post on this thread, then I would say they have a problem.  Not me.

Ciprico

Dunstonh,

Don't be disheartened, 99.99 % us enjoy/benefit from your well informed responses,....

prowla

nicknameless said:

Marcon said:

Universidad said:

OP, there has been a lot less judgement in this thread than you think. Responses like "I find it difficult to see how you can only have £30k in your pension" are not criticisms because folks think you have done badly or planned badly. They are because it seems almost impossible that the figure could be that low, so people are really suspecting that you've misunderstood something, rather than that you've made poor choices. The truth is that we really don't know.

I'm going to give you the benefit of the doubt and assume that your snippy response was because you're as stressed about this as you say. So let me give you a bit of a worked example.

For example, let's assume pension contributions of the current legal minimum (8% overall) contributions, and we assume that your salary has been only £15,000 per year since you started on average ( a figure that would have been a low salary 20 years ago, and would be well below minimum wage for a full time worker today). Let's assume you have been working for 25 years, since you were 22 years old.

8% of that salary is 1200 pounds per year. Multiply that by 25, and the figure is 30,000.

So on the current legal minimum pension contribution and with a wage that seems unrealistically low, that's already at 30K - and that's before we account for the fact that the money in your pension will have been invested and has presumably performed better than cash with zero interest applied over that time.

Now it is possible your contributions were lower than 8% overall in the past, but even if they were, you'd probably expect to be above 30K at this point based on investment performance alone.

So that's why people are surprised at the figure. They're assuming something has been missed. Here are some possible examples:

1) You may have switched to a different pension fund at some point (for example, if/when you switched employers). If so, there may be another pension fund out there with your name on it. You can have more than one pension! Is it possible you're only looking at part of your overall pension savings?

2) If any of your pensions are of the Defined Benefit rather than Defined Contribution type, then you may actually find that the figure on those "pots" is actually what you'll recieve each and every year from retirement, rather than an amount that you need to use over your whole retirement. It's certainly not likely that this is the case today, but it could have been at the start of your career when DB schemes were more common.

3) Have you worked part time rather than full time?

4) Is is true that you have always contributed to a pension scheme?

At the end of the day most responses were from people assuming that you have more than 30K in your pensions simply because that is the most likely situation for anyone who has worked full time for 25 years and always paid in to their workplace scheme. However, if it is only 30,000 then although that is low, it is still a good start with plenty of time to get back on track. We regularly hear from people on these forums who have nothing and have always opted out, and are just starting to think about it in their 40s.

The good news is that if you are used to living on a very low amount, then a smaller than usual pension fund will keep you going for a lot longer than many people. So, as ever really, what you need for retirement will be an answer personal to you, and you shouldn't worry too much about comparing with others. 

As others have said, please do check your state pension forecast, and ensure you're in line for the maximum state pension that you can get. 

If you want further specific help, please try to answer the questions people are asking, rather than assuming that you know why they are being asked.

What a cracking good answer. I hope OP comes back (if only out of curiosity!) and reads it.

Marcon said:

Universidad said:

OP, there has been a lot less judgement in this thread than you think. Responses like "I find it difficult to see how you can only have £30k in your pension" are not criticisms because folks think you have done badly or planned badly. They are because it seems almost impossible that the figure could be that low, so people are really suspecting that you've misunderstood something, rather than that you've made poor choices. The truth is that we really don't know.

I'm going to give you the benefit of the doubt and assume that your snippy response was because you're as stressed about this as you say. So let me give you a bit of a worked example.

For example, let's assume pension contributions of the current legal minimum (8% overall) contributions, and we assume that your salary has been only £15,000 per year since you started on average ( a figure that would have been a low salary 20 years ago, and would be well below minimum wage for a full time worker today). Let's assume you have been working for 25 years, since you were 22 years old.

8% of that salary is 1200 pounds per year. Multiply that by 25, and the figure is 30,000.

So on the current legal minimum pension contribution and with a wage that seems unrealistically low, that's already at 30K - and that's before we account for the fact that the money in your pension will have been invested and has presumably performed better than cash with zero interest applied over that time.

Now it is possible your contributions were lower than 8% overall in the past, but even if they were, you'd probably expect to be above 30K at this point based on investment performance alone.

So that's why people are surprised at the figure. They're assuming something has been missed. Here are some possible examples:

1) You may have switched to a different pension fund at some point (for example, if/when you switched employers). If so, there may be another pension fund out there with your name on it. You can have more than one pension! Is it possible you're only looking at part of your overall pension savings?

2) If any of your pensions are of the Defined Benefit rather than Defined Contribution type, then you may actually find that the figure on those "pots" is actually what you'll recieve each and every year from retirement, rather than an amount that you need to use over your whole retirement. It's certainly not likely that this is the case today, but it could have been at the start of your career when DB schemes were more common.

3) Have you worked part time rather than full time?

4) Is is true that you have always contributed to a pension scheme?

At the end of the day most responses were from people assuming that you have more than 30K in your pensions simply because that is the most likely situation for anyone who has worked full time for 25 years and always paid in to their workplace scheme. However, if it is only 30,000 then although that is low, it is still a good start with plenty of time to get back on track. We regularly hear from people on these forums who have nothing and have always opted out, and are just starting to think about it in their 40s.

The good news is that if you are used to living on a very low amount, then a smaller than usual pension fund will keep you going for a lot longer than many people. So, as ever really, what you need for retirement will be an answer personal to you, and you shouldn't worry too much about comparing with others. 

As others have said, please do check your state pension forecast, and ensure you're in line for the maximum state pension that you can get. 

If you want further specific help, please try to answer the questions people are asking, rather than assuming that you know why they are being asked.

What a cracking good answer. I hope OP comes back (if only out of curiosity!) and reads it.

Here, here.

Also some regular posters do need to read back what they write before they post, especially a particular regular poster and IFA whose posts IMHO, and as politely as I can say, whilst often very informative, can be equally condescending.

Where, where?

FIREDreamer

prowla said:

nicknameless said:

Marcon said:

Universidad said:

OP, there has been a lot less judgement in this thread than you think. Responses like "I find it difficult to see how you can only have £30k in your pension" are not criticisms because folks think you have done badly or planned badly. They are because it seems almost impossible that the figure could be that low, so people are really suspecting that you've misunderstood something, rather than that you've made poor choices. The truth is that we really don't know.

I'm going to give you the benefit of the doubt and assume that your snippy response was because you're as stressed about this as you say. So let me give you a bit of a worked example.

For example, let's assume pension contributions of the current legal minimum (8% overall) contributions, and we assume that your salary has been only £15,000 per year since you started on average ( a figure that would have been a low salary 20 years ago, and would be well below minimum wage for a full time worker today). Let's assume you have been working for 25 years, since you were 22 years old.

8% of that salary is 1200 pounds per year. Multiply that by 25, and the figure is 30,000.

So on the current legal minimum pension contribution and with a wage that seems unrealistically low, that's already at 30K - and that's before we account for the fact that the money in your pension will have been invested and has presumably performed better than cash with zero interest applied over that time.

Now it is possible your contributions were lower than 8% overall in the past, but even if they were, you'd probably expect to be above 30K at this point based on investment performance alone.

So that's why people are surprised at the figure. They're assuming something has been missed. Here are some possible examples:

1) You may have switched to a different pension fund at some point (for example, if/when you switched employers). If so, there may be another pension fund out there with your name on it. You can have more than one pension! Is it possible you're only looking at part of your overall pension savings?

2) If any of your pensions are of the Defined Benefit rather than Defined Contribution type, then you may actually find that the figure on those "pots" is actually what you'll recieve each and every year from retirement, rather than an amount that you need to use over your whole retirement. It's certainly not likely that this is the case today, but it could have been at the start of your career when DB schemes were more common.

3) Have you worked part time rather than full time?

4) Is is true that you have always contributed to a pension scheme?

At the end of the day most responses were from people assuming that you have more than 30K in your pensions simply because that is the most likely situation for anyone who has worked full time for 25 years and always paid in to their workplace scheme. However, if it is only 30,000 then although that is low, it is still a good start with plenty of time to get back on track. We regularly hear from people on these forums who have nothing and have always opted out, and are just starting to think about it in their 40s.

The good news is that if you are used to living on a very low amount, then a smaller than usual pension fund will keep you going for a lot longer than many people. So, as ever really, what you need for retirement will be an answer personal to you, and you shouldn't worry too much about comparing with others. 

As others have said, please do check your state pension forecast, and ensure you're in line for the maximum state pension that you can get. 

If you want further specific help, please try to answer the questions people are asking, rather than assuming that you know why they are being asked.

What a cracking good answer. I hope OP comes back (if only out of curiosity!) and reads it.

Marcon said:

Universidad said:

OP, there has been a lot less judgement in this thread than you think. Responses like "I find it difficult to see how you can only have £30k in your pension" are not criticisms because folks think you have done badly or planned badly. They are because it seems almost impossible that the figure could be that low, so people are really suspecting that you've misunderstood something, rather than that you've made poor choices. The truth is that we really don't know.

I'm going to give you the benefit of the doubt and assume that your snippy response was because you're as stressed about this as you say. So let me give you a bit of a worked example.

For example, let's assume pension contributions of the current legal minimum (8% overall) contributions, and we assume that your salary has been only £15,000 per year since you started on average ( a figure that would have been a low salary 20 years ago, and would be well below minimum wage for a full time worker today). Let's assume you have been working for 25 years, since you were 22 years old.

8% of that salary is 1200 pounds per year. Multiply that by 25, and the figure is 30,000.

So on the current legal minimum pension contribution and with a wage that seems unrealistically low, that's already at 30K - and that's before we account for the fact that the money in your pension will have been invested and has presumably performed better than cash with zero interest applied over that time.

Now it is possible your contributions were lower than 8% overall in the past, but even if they were, you'd probably expect to be above 30K at this point based on investment performance alone.

So that's why people are surprised at the figure. They're assuming something has been missed. Here are some possible examples:

1) You may have switched to a different pension fund at some point (for example, if/when you switched employers). If so, there may be another pension fund out there with your name on it. You can have more than one pension! Is it possible you're only looking at part of your overall pension savings?

2) If any of your pensions are of the Defined Benefit rather than Defined Contribution type, then you may actually find that the figure on those "pots" is actually what you'll recieve each and every year from retirement, rather than an amount that you need to use over your whole retirement. It's certainly not likely that this is the case today, but it could have been at the start of your career when DB schemes were more common.

3) Have you worked part time rather than full time?

4) Is is true that you have always contributed to a pension scheme?

At the end of the day most responses were from people assuming that you have more than 30K in your pensions simply because that is the most likely situation for anyone who has worked full time for 25 years and always paid in to their workplace scheme. However, if it is only 30,000 then although that is low, it is still a good start with plenty of time to get back on track. We regularly hear from people on these forums who have nothing and have always opted out, and are just starting to think about it in their 40s.

The good news is that if you are used to living on a very low amount, then a smaller than usual pension fund will keep you going for a lot longer than many people. So, as ever really, what you need for retirement will be an answer personal to you, and you shouldn't worry too much about comparing with others. 

As others have said, please do check your state pension forecast, and ensure you're in line for the maximum state pension that you can get. 

If you want further specific help, please try to answer the questions people are asking, rather than assuming that you know why they are being asked.

What a cracking good answer. I hope OP comes back (if only out of curiosity!) and reads it.

Here, here.

Also some regular posters do need to read back what they write before they post, especially a particular regular poster and IFA whose posts IMHO, and as politely as I can say, whilst often very informative, can be equally condescending.

Where, where?

I presume he is referring to dunstonh, but from what I have read he (or she) seems to be one of the best contributors on this board and gives all of this information / opinion for free.