Forum Home» Pensions, Annuities & Retirement Planning

A Paupers Pension Tale (Not many nuts to dig up)

New Post Advanced Search

A Paupers Pension Tale (Not many nuts to dig up)

43 replies 9.8K views

Will try and make this as short as possible and is mainly aimed for people like me who are thinking of or have retired early with only a small pension pot. I have read through many posts on here and there is not much out there for people like myself so I thought I would start this thread and update it as I go along then other people can hopefully learn from any mistakes I make and help them along the way.

Right I am 50 years old and just took voluntary redundancy after 26 years (worked 34 years in total), not a great package but I was fed up of the 8 to 5 routine and always wanted to retire by 55 so thought I might as well bite the bullet. Being furloughed in March helped a great deal as was always worried what I would do with my time but found it very easy to fill my days up. I have an understanding wife five years younger who is more than happy to carry on working and let me look after the house and dogs, again she does not earn a great amount but will cover the costs of running the house and give her money to spend on herself (mortgage paid off).

Right here is where all the financial people out there shake their heads and go you will never make it lol, maybe so but I am going to give it a try. I have a pension pot of £110k which I can access at 55, also a works related pension at around 15k and a sipp 10k. All these I am still learning about and will be making changes to them in the next few months.  My redundancy and savings amount to 30k which is mostly in premium bonds which is all easy access to. My wife’s pension stands at 15k but hoping to increase that over the next few years. As the saying goes money may run out but it is guaranteed that quality time will run out.

I have read the recommended Diy Pensions book by John Edwards and starting to understand more and more what I need to achieve. I will hopefully be able to pay £2880 into a sipp for the next 5 years knowing I can access the money if needed by then and already transferred marriage tax allowance over for this new tax year.

So here’s the plan so far, live off the wife’s wages for as long as possible, obviously the longer the better but I am sure eventually she will be wanting to retire as well (6 years short sp), then if needed start taking money from my pension pots tax free. Part time work an option if things get to tight in between times as I also am one year short for full state pension so that will need sorting out at some stage. Inflation is an obvious concern and so is the the 17 year gap to sp, once we both claim sp we will be more than comfortable, bereavement is again a concern if we only have sp in the later years.

Positives so far are that the last 12 months have been probably the best of my life now the stress of working has gone, my wife loves the fact she does not have to lift a finger around the house anymore and our relationship has never been better. We live a simple life and I have always been good with money , I have run a spread sheet for the past 12 months (and can account for every penny I have spent since I first bought a house back in 1992) to make sure we can do it and works out good so far. We have done all the house improvements more by luck than judgement in the past 5 years so only basic maintenance should be required.

I am always astounded when people post is a million enough to retire with etc, read earlier that someone was even quizzing sea_shell’s retirement pot which seems one of the best run retirement plans on here. A few people commented that they would like to read my story so hence here it is, I wrote this a few months ago and tweaked it slightly as know a little more now, nothing has really changed so far apart from that, in fact in anything things are better as I have a much greater understanding of everything  thanks to all the very helpful people on here.

Already rambled on to much so will finish it with the negatives, health being the important one, more so for my wife than myself, and the one which throws a tiny bit of doubt in my mind is the major expense of one of the dogs falling ill or the roof caving in on the house or the car breaking down etc.  Also been so easy to budget and save for the past 12 months so will be interesting to see how we get on once the pubs re open and we can go to gigs again.

I will continually update this post (I have the time on my hands J ) for anyone who might be interested and will add more details as we go along, I think I have thought of most things like hols, car, new appliances etc but always happy for feedback especially from anyone who is or has been in a similar position.

«1345

Replies

  • MFW2026MFW2026 Forumite
    118 posts
    100 Posts Name Dropper Photogenic
    Thankyou for your post, I am similar to yourself and past couple of years only really been able to start to save/invest (small amounts) and get worried when see some posts re 1 million pension pots. 
    Sounds like the past year has been so good for you and you are happier which is the most important thing. Our health is paramount and I think after the past year more people appreciate this. 
    Nurse striving for financial freedom
  • Notepad_PhilNotepad_Phil Forumite
    627 posts
    500 Posts First Anniversary Name Dropper
    ✭✭
    gambleruk said:
    ...  just took voluntary redundancy after 26 years (worked 34 years in total), ...

    ... Part time work an option if things get to tight in between times as I also am one year short for full state pension so that will need sorting out at some stage...

    Great post and I look forward to your updates.
    Just one thing I wanted to check though, have you actually checked your state pension forecast and not assumed that because you've worked for 34 years that you just need one more to get the full state pension? Wouldn't want you to get a shock at some point if you hadn't and find you actually need a few more years of NI.
  • gamblerukgambleruk Forumite
    29 posts
    Tenth Anniversary 10 Posts Combo Breaker
    gambleruk said:
    ...  just took voluntary redundancy after 26 years (worked 34 years in total), ...

    ... Part time work an option if things get to tight in between times as I also am one year short for full state pension so that will need sorting out at some stage...

    Great post and I look forward to your updates.
    Just one thing I wanted to check though, have you actually checked your state pension forecast and not assumed that because you've worked for 34 years that you just need one more to get the full state pension? Wouldn't want you to get a shock at some point if you hadn't and find you actually need a few more years of NI.
    Pure coincidence the years are the same, I was 2 years short but will have paid enough last Ni last year before I took redundancy hence 1 year to go, cheers for the advice though.
  • quirkydeptlessquirkydeptless Forumite
    944 posts
    500 Posts Second Anniversary Name Dropper Photogenic
    ✭✭✭
    I'm sure there are many squirrels out there who can empathise with this thread and learn from it


    Retiring 1st July 2021.
    This is not investment advice.
    Your money may go "down and up and down and up and down and up and down ... down and up and down and up and down and up and down ... I got all tricked up and came up to this thing, lookin' so fire hot, a twenty out of ten..."
  • StubodStubod Forumite
    1.2K posts
    Tenth Anniversary 1,000 Posts Name Dropper
    ✭✭✭
    Well done on going early, geat post and look forward to your updates. As above, max your SIPPS every year for the "free money", particularly if you are "zero rate" tax payer. Also check your State Pension forecast, I have paid in for well over 40 years and still don't get the headline rate. Worth topping up if you are short fro around £700 per year missed.

    ...Good Luck!!
    .."It's everybody's fault but mine...."
  • BravepantsBravepants Forumite
    1.2K posts
    Tenth Anniversary 1,000 Posts Name Dropper Photogenic
    ✭✭✭
    A refreshing post! Thank you for  sharing.
    A couple of thoughts
    1. you're right that a lot of the posters are guilty (me!) of groupthink. There is a heavy weighting of middle aged well paid individuals, and it is easy to lose sight of the wider population.  As you note, this has led to the frankly ridiculous musings that £1m is simply not enough, and that you must be 99% or 99.5% certain that your spending plans will not run out of money, and that just being 95% certain is too risky.
    2. we have no notion of your circumstances - your income, basic spending requirements, desired lifestyle etc.  The Which figures of (roughly) £24,000 basic / £35,000 comfortable / £45,000 luxurious retirement figures are a good starting point, but only you know what you want and need.
    3. In my mind, the answer to life is contentment and gratitude, with an appreciation of the simple things. It does sound as if you have some great insights into what is fulfilling and sufficient for your (family) needs, which is treasure indeed.
    4. keeping flexible and active is key. Life throws curve balls at us from time to time, and being financially sound and physically healthy is a great preparation.

    Best of luck - keep us posted.
    That "Which?" article is quite good. But I think the figures are a bit less than those that you quote. Although I'm not that impressed with "Which?" presentation of their figures, which aren't particularly clear so I could be wrong.

    I note the article has been updated this month...

    https://www.which.co.uk/money/pensions-and-retirement/starting-to-plan-your-retirement/how-much-will-you-need-to-retire-atu0z9k0lw3p

    If you want to be rich, live like you're poor; if you want to be poor, live like you're rich.
    Be brave enough to invest against the herd!
  • ErinGoBrathErinGoBrath Forumite
    115 posts
    100 Posts Name Dropper Photogenic
    Here is a similar article
    Retirement living standards | Loughborough University (lboro.ac.uk)

    Regarding the Which figures the amounts quoted for drawdown ( £11kpa from £170K seem very optimistic) 
    Not so much optimistic as deluded.
  • StubodStubod Forumite
    1.2K posts
    Tenth Anniversary 1,000 Posts Name Dropper
    ✭✭✭
    ....£11k from £170k would seem a tad optimistic to me.
    Last time I checked for an annuity it was about £2k / £100k for index linked and spouse benefit?
    .."It's everybody's fault but mine...."
Sign In or Register to comment.

Quick links

Essential Money | Who & Where are you? | Work & Benefits | Household and travel | Shopping & Freebies | About MSE | The MoneySavers Arms | Covid-19 & Coronavirus Support