Pension advice for naïve 45-year-old

elsmandino

I am completely lost, aren't I?

Would it help if I gave details of my latest pay slip?

I am embarrassed that I know so little about my own finances.

Brie

I would also suggest you have a look at your state pension forecast (I found mine very reassuring when I first looked).

Check your State Pension forecast - GOV.UK

Also think back to who employed you previously and see if there was any pension plans with them.  Might be just tiddly but you might want to transfer them in to your current work plan or just have them separate depending on what they are.  AJ Bell are a private pension provider who have added a free, no obligation search function to their website.  I don't use them but am just aware that they do this and it looks easy to use.  

Ready-made pension | AJ Bell

And as for the current scheme - ask your HR department for the basic scheme details or find a recent benefit statement from the pension administrators.  That should answer some basic questions for you and will explain about how this is a defined contribution scheme.  Understanding this will help you if there are other work schemes that have you as a deferred member and even understand how the state pension adds to your financial well being come retirement. 

JayRitchie

elsmandino said:

I am completely lost, aren't I?

Would it help if I gave details of my latest pay slip?

I am embarrassed that I know so little about my own finances.

Hi - just pondering - when do you get your March payslip?

Do you have an easy way to enquire with your payroll or HR dept about how your pension scheme works? There are some circumstances which can make using salary sacrifice more advantageous which can be worth knowing about.

elsmandino

Thank you.

I actually get my paid tomorrow, so I my latest payslip should be available online.

JoeCrystal

elsmandino said:

Thank you.

I actually get my paid tomorrow, so I my latest payslip should be available online.

Make sure to cover all the personal informations! 

crv1963

OP- you're not as poorly off as you may think. Many don't get that much despite a life time of earnings, through choice, ignorance or a belief that pensions aren't worth the savings and spend now rules!

Do as others have suggested- get more details about your scheme and employers contributions and how much more you can add.

You do well to learn and plan now- a few simply questions to ask yourself- 1) how much do I need to live on in retirement? 2) How big of a sum of money will generate that amount? 3) How much can I afford to save over and above what is going in now? 4) What does retirement look like for me?- Cruises and holidays, lots of trips out? 5) When do I want to retire? Then make a plan with wriggle room for adjustments as circumstances change. Also if there is a spouse/ significant other what is their pension position? Planning a retirement as a couple is a joint venture. Oh and don't forget to include state pension in your calculations.

You may see some eye-watering sums banded about on here, don't compare yourself to them, it is your retirement and lifestyle that you are planning. 1) Basic- covers the bills and has a few luxuries here and there, 2) Middle of the road 1+ a couple weeks abroad for holidays and regular spending on nice activities and 3) Luxury- 1+ 2 and throw in some expensive holidays/ activities. You decide what income you need for each level.

You're 45 so well placed to plan, many leave it later and many more don't consider it at all.

Remember most posters on this board have given it some thought and planning, they (we) are a distinct minority of the population! I have found testing out plans and income levels and then posting ideas helped me form my plans and of course I have adjusted them as life changes but I have a general direction and have adjusted savings accordingly.

Good luck with it all- it isn't as overwhelming as it seems when you first start looking at it.

JayRitchie

elsmandino said:

Thank you.

I actually get my paid tomorrow, so I my latest payslip should be available online.

Hopefully we can figure out what your position is!

Do be cautious about posts on personal finance sites. There are lots of people with high assets (often through inheritance), very high salaries and often both. It gives a very unrealistic view of broader society and what others are doing.

The amount you have in pension now should you buy an annuity with it at state pension age would absolutely change your quality of life. Any more you can put in - even more so.

Albermarle

JayRitchie said:

elsmandino said:

Thank you.

I actually get my paid tomorrow, so I my latest payslip should be available online.

Hopefully we can figure out what your position is!

Do we cautious about posts on personal finance sites. There are lots of people with high assets (often through inheritance), very high salaries and often both. It gives a very unrealistic view of broader society and what others are doing.

The amount you have in pension now should you buy an annuity with it at state pension age would absolutely change your quality of life. Any more you can put in - even more so.

Regarding your comment in bold.
I do not disagree that people who contribute to personal finance sites/forums are unrepresentative of the general public, many of whom have little or no savings/pension or are actually in debt problems.
However I would not agree necessarily that all regular participants on this site generated their assets from inheritances. or very high salaries (although some will have).
I think an understanding of personal finance and a willingness to save for tomorrow, rather than spend today, is a major part of the reason that significant assets have been built up. 

A decent salary obviously helps, but so does being a bit tight as well 

artyboy

OP - in addition to payslip details so that we can hopefully work out your current situation (and I'll reiterate the point about redacting anything personal!) - do you have access to documentation on your company's pension scheme? 

Not specific to your own investments, more about what they contribute as a result of you sacrificing salary and - this bit is key - whether on top of the 'basic' contributions, if they will match any additional salary that you agree to sacrifice?

Some employers are quite stingy and just stick to the legal minimums, but some are more generous, and you might find that if you chose to sacrifice a few more percent of your salary, not only would you get the benefit of not paying tax/NI on it, but it would also get doubled up through employer matching.

But every scheme is different, so take a look at how your one operates!

elsmandino

Evening all.

I finally managed to contact my HR department, to ask exactly what the deal was with my pension.

I was told that:

1. Salary sacrifice is not set up on my pension.
2. The company contributes 10% of my salary, regardless of any contribution from me.
3. I am not contributing anything myself.
4. The company does not offer any contribution matching.

Any advice, on where to go from here, would be much appreciated.