‘I’ll never be able to retire’: The 45 to 60-year-olds with no pensions
‘I’ll never be able to retire’: The 45 to 60-year-olds with no pensions
by 1-randomonium
‘I’ll never be able to retire’: The 45 to 60-year-olds with no pensions
‘I’ll never be able to retire’: The 45 to 60-year-olds with no pensions
by 1-randomonium
45 comments
(Article)
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When Suze Mannion hit 55 she went from feeling concerned about her pension to something approaching panic. She wasn’t in a good financial position, and felt frustrated and embarrassed not to have taken the issue seriously sooner.
“I had no idea about the importance of pension saving when I was young,” says Suze, who works as a stylist among other jobs. “It just wasn’t discussed. Back then, you were made to feel intimidated by the whole thing. Only very rich people invested. It wasn’t something normal people did.”
Splitting up with her partner at 43 was also a factor. She had assumed they would be together for ever; that when they retired they would have two incomes to live off and his decently-sized pension would help. Only when they went their separate ways after 18 years together, his pension money wasn’t discussed.
“At that time I focused on getting a home, and of course you’re keen to resolve everything so you can move on. But then as I got a bit older and started thinking about what I was going to live on in retirement, my future became very worrying.”
Suze is now 60 and living in Berkshire. She would like to retire now but can’t afford to. She started seeing a financial adviser five years ago, and saving into her pension pot, but while things are improving she still describes her pension pot as small.
“I feel like the time has come to slow down and enjoy life and I do feel a bit hard done by.”
As she begins her sixth decade, she recently took on an additional job in a nursery on top of working as a self-employed stylist and bra fitter.
Without much choice her plan is to keep going until she reaches 67, when she will start receiving the state pension.
Working three jobs for another seven years is “daunting”, however. “I’m going up to Coventry every other weekend to be with my mum who has dementia. I’m tired and it’s a lot of worry. I know I’m not alone as when I go to garden centres and supermarkets, I see a lot of people my age working. They are like me: they can’t afford to retire”.
There is a common assumption, particularly among younger people, that older generations don’t have to worry about retiring broke. But while this may be true for some lucky Baby Boomers (now aged between 61 and 79), it’s less true for members of Generation X, who were born between 1965 and 1980.
Research by the think-tank the Institute of Fiscal Studies has found that 30 per cent of people in this age group – between 45 and 60 – have just £10,000 or less saved for their pension. This means that nearly one in three are likely to be almost totally reliant on the state pension when they retire. And despite the amount increasing thanks to the triple lock – currently a full state pension pays £221.20 per week – it is still relatively ungenerous compared with other European countries.
Gen X has been unlucky: they were too young for final-salary pensions, which Boomers were more likely to benefit from – these fantastically generous schemes began to be culled by companies in the 70s. By 2010 they were largely phased out for workers outside the public sector.
Meanwhile, autoenrolment, which obliged an employer not only to open a pension for most of its employees but to pay money into it, came into effect in 2012. The genius of autoenrolment is that your future doesn’t have to depend on your ability to engage with your finances at a young age.
Gen Xers were between 32 and 47 when it was introduced. While still helpful, it happened later than ideal.
Sir Steve Webb, the then pensions minister who introduced autoenrolment explains he did so because by the early 2000s, the rate of people saving into a pension had plummeted. When he started his role in 2010, two-thirds of people outside the public sector did not have any kind of pension at all.
“For a smooth transition into retirement without a shart drop in living standards”, Webb, now a spokesperson for LCP pensions advisory, adds, “you should target having a pension income of roughly two-thirds of your annual earnings before retirement.”
Clearly many Gen Xers have always been very far from the target, not helped by the 2008 financial crisis. The shock waves from this included a stalling of real wage growth for 15 years after. For almost half their working lives, this cohort saw their wages depressed by the crisis. Research carried out by the Resolution Foundation suggests that the average person would today earn £11,000 more a year had the crash not happened. This lost earnings gap is bad for pension saving too as the proportion of salaries contributed has been lower than had the crash not happened.
Asit is 56 and lives in Watford. He has worked in the public sector for 21 years and is married with two sons. He pays 5 per cent of his salary into his pension and his employer contributes a further 20 per cent. He is on track to retire at 70 with an income of around £1,400 a month, having paid off his mortgage.
While this is a decent amount, it is not enough according to the Pension & Lifetime Savings Association which calculates a couple needs a minimum of £22,400 a year for a basic retirement, £43,100 for a moderate one and £59,000 for a comfortable retirement. For a single person it’s £14,400, £31,300 and £43,100. All these calculations assume someone owns their home outright and won’t be paying rent.
I know a few people in this boat. Sometimes it is due to utter stupidity, but I do also know some people who stopped making pension contributions because they were not able to do without the money in their pay each month. It is a terrible economy in the long term as you miss out on employer contributions, but I understand some people doing it.
There are going to be more and more people working until they drop.
Not being educated on pensions and their importance I can understand, but not having any other savings is pretty insane.
and the rich have their eyes on the state pension pots, with the aim of taking away the proctions protections making them worthless in 20 years time.
One group that is going to be hit particularly hard by this will be the self-employed.
Unlike with traditional employment where you get mandatory employer contributions (and its opt-out past a certain threshold), there is no such scheme for those whom work for themselves. In such cases you need to firstly seek independant advice on a pension plan that matches your often wildly varying income, then you need to make those contributions which can be tricky if you’re running a small business and in addition to trying to keep yourself afloat during the cost of living, you’re trying to keep a fledgling business afloat.
I can totally see on the horizon a whole generation of small business / solo people who just earned enough to keep themselves afloat and hadn’t the benefit of auto-enrollment + employer contributions will find themselves in their latter years forced to continue working in one form or another.
Is it bad that my retirement plan is to have enough in the bank for Dignitas?
For that generation to not have saved/invested is almost laughable, especially the latter end of the age range.
Their main working years would have been the 90s and 00s, which saw massive wage growth and purchasing power, with a strong currency internationally.
Very different from the following generations that have only experienced austerity for the past 15 years.
I’ve got a pension still going to be poor and miserable.
I am 53, and I call bullshit. We were left in with no illusions about the need to save for retirement. If you didn’t then I’m sorry but please don’t be claiming this is a surprise.
My wife is in a similar boat but it’s because she was always moving around jobs. She had to work a lot of different contracts as her field only did fixed term contracts for years and they would regularly end the contracts after a year or fail to promise renewals fast enough (so to ensure she was still employed she had to move on to other jobs). She is now paying into one and is able to move it around but it’s hard to stick to paying into a pension at an early age when each job had different schemes etc She is also focusing on paying off the mortgage faster too to try and assist with getting that gone ASAP.
My job actually changed our Pension scheme after many years of paying into it, making it less attractive for people (it used to be good but is now fairly weak). Many people opted out and are now trying to pay money into savings and investments to try and bolster their retirement that way. The whole way pensions have been bastardized over the past 15 years has ensured that my generation are screwed when it comes to retirement. We will have the largest population of elderly to youth that has ever been recorded in history and it’s just a storm heading towards us with nobody seemingly able to (or wanting to) stop it.
To be honest I’ll be surprised if anyone in the 20-45 age range has any hope of retirement either.
Feels more like a pipe dream for many.
Personally I pay into a pension, I have a decent savings pot, a mortgage and holding stocks/shares. I still don’t feel like it’ll ever be enough.
Yet there’s plenty of people who don’t do any of that, simply because they can’t afford to.
Retiring is just the carrot to keep you working until you die.
I’m realistically one of these people. I’ve been self-employed for so long that any contributions I make, even when I forego every remotely enjoyable facet of my existence, will add up to a pittance so, aside from making all the required NI contributions to my state pension, I’ve never bothered. My ‘plan’ such as it is, it to have my house paid off, supplement my income with the state pension and work into superannuation. This doesn’t bother me because I love my work and it’s physically possible to do when old. It’s not ideal but it’ll do.
My ex wife is one of these
49 now and works for a council where she has opted out of the pension (found out during divorce filing) after 15 years service
Her stance has always been that someone else can pay for her and what happens tomorrow is tomorrow’s problem
Pretty sure she’ll be working until she’s 68, her job is manual and she’s already on time off warnings according to our kid as the toll is already affecting her physically
Some people simply won’t future plan or expect everyone else to provide
I’m 52, nobody in this group isn’t aware of the need to have a pension, for some it will be a cost too far with their low income
For others it’s just the consequences of their choices catching up with them
Considering that businesses had to be forced to enroll staff into pensions by 2012 there will be a lot of people that made no pension contributions before that time. Some employers would do anything to get out of providing pensions for their employees. Personal responsibility goes a long way but what do you do if your employer says no to a pension?
Suze says only very rich people invested. I’m her age-group, none of what she is saying reflects my recollection of the times of her youth, possibly just her peer group and a live now pay later attitude. She clearly made poor decisions and now is facing the consequences of those decisions.
Top that off with not looking at pensions at divorce and she seems to have been blinkered as I find it hard to believe that advice wasn’t available, probably thought the benefits of what she got as a clean break divorce were worth giving up the rights to her ex’s pension. Looks like she will be working until 67 and relying on either the state pension or pension credit. I find it hard to have sympathy if that is not enough to keep up her lifestyle.
I started my pension in my 20s but the ammount I paid in I has been far too low.
I will be working for the rest of my life and realised this a decade ago and started to build my soft skills and experience in consulting.
I was hit by illness which has crippled me financially. Fortunately my wife has got her covered so long term my daughter will be ok.
Is this not a decision that quite a few people will have to make?
You can spend your money when young enough to enjoy it and hope something comes along when you are old. Be frugal and hopefully live long enough to enjoy your retirement in good health. Or put some away and basically struggle your entire life.
This is a very WASPI-type problem as in the people affected have not paid even the fairly minimal attention needed to a fairly obvious issue, and now they’re panicking and trying to shift the burden onto other people as they’ve started thinking about it way too late.
This really is one of the things the state pension is for. You don’t have to think about it, and it gives you a baseline for retirement. It’s a shame you can’t retire early like you wanted, but you pays your money (or rather, you don’t) and you takes your choice.
I used to work with a guy that was probably about 50-55 and had no pension, he tried to convince me that I should stop paying into one as “the government will give you 18k a year when you retire”, absolutely no idea where he got this figure from but he was living under the belief that him and his wife would be getting a combined 36k a year at retirement and that it would be tax free too. This combined with his house being paid off by then would apparently mean he’d be able to live the high life in retirement.
Tried to convince him that maybe he should look more into all this but he wouldn’t have it. This was 5 years ago so his reckoning with reality is probably coming soon.
This gap is more prevalent for women. The workplace 40 years ago was different. The expectations on relationships was different. Fin ed was different.
The lady here seems the perfect storm. Lowish paying probably part time jobs, probably to help top up the household income. Expecting relationships to last like their parents. Not getting married and naivity in the break up.
That’s said, i don’t know how she thought she was going to retire at 60, at least from the point of break up.
Most people should plan to work up to state age. Many beyond. Especially of no provisions.
I’m one of them. In my fifties, no pension, no savings, but already forcibly semi retired through ill health.
On the plus side I’ve got no mortgage so only need to work a couple of days a week to keep on top of bills, and the rest of the time I buy and sell things and restore motorbikes to sell on.
I’ll carry on doing that until I can no longer work, then I’ll take one of said motorbikes and ride it at high speed into a very solid wall.
I have what would be seen to most as a very generous pension package, whilst I’ll be able to survive on it, that’s it, it will be survival.
I think I’ll probably have to work at least part time until I die to have any sort of standard of living.
I wonder how many are in the same boat
Don’t worry the younger tax payers who have much worse opportunities and quality of live have got your back on this.
Im glad they’re being screwed for the benefit of the bury your head in the sand generation – why save today what can fuck someone over tomorrow.
I read this article this morning. I have zero sympathy. She did nothing about her future until hitting late 50s, she’s worked since being a youngster but paid nothing in. Yet another person not taking responsibility and relying on government to sort old age out.
60 here and worried. I started a pension at age 31 but Brexit / COVIID / war / Trump have taken lumps out of it.
Financial planning should be taught in secondary schools. In PSE/ Citizenship if it isn’t already. But then how do you also get kids to listen.
It’s a remarkable level of financial illiteracy or stupidly that has put some people in this situation of not planning for the future. Others because their take home pay simply doesn’t stretch.
Similar with the triple lock pension debate and whether or not to tax them. I’m a bit cautious on that one because I know in 30-35 or so years time, I will hopefully be retired, and I’m playing catchup on my own contributions for a decade of insecure work. I’m aiming for a yearly pension of £30k a year at least. That is helped by my salary being in a comfortable enough position. I know others aren’t as fortunate as that.
There comes a point where I just don’t care about these people. They’ve had auto enrollment for like 15 years. Private pots have been the norm a lot longer than that.
If you’ve chosen to be a wage slave until 68, so be it.
A lot of people in this bracket also opted for interest-only mortgages and never saved enough to pay the mortgage at the end of the term.
People whose retirement plan is to die before they stop working, take note
“For a smooth transition into retirement without a shart drop in living standards”
I’m almost certain this is a typo, but you can never be sure.
This is why I work for the civil service and want to stay here until I retire or am let go
I’m gonna have to work until lunchtime on the day of my funeral as things stand .
“I had no idea about the importance of pension saving when I was young,” says Suze, who works as a stylist among other jobs. “It just wasn’t discussed. Back then, you were made to feel intimidated by the whole thing. Only very rich people invested. It wasn’t something normal people did.”
Absolutely insane take. There’s no level of financial education or government hand holding to overcome this level of rank stupidity.
Ahhh that nice extra pay that paid for the botox and extra trips to benidorm coming back to bite you in the arse.
My Mum’s one of these people. She made some terrible life choices and she has never been financially responsible, when my Dad died she found herself really stuck. Now she’s having to spend most of her days with limited things to do because she just doesn’t have the money to live. I pay the rent and utilities but that’s also keeping me from being able to save and move forward. I try hard not to think too much about it because overall the situation really gets me down. She is a wonderful woman… just awful with money and making good life choices unfortunately.
I’ve always worked freelance and was never able to contribute due to a fluctuating income and now find myself in my late 60s with nothing to fall back on. I looked into an ex-pat state pension but it didn’t seem worth the effort.
When I started work as a travel agent in 1994 and my after tax wage was £115 per week. We got commission but it was hard won and not a massive amount.
Wages were crap in the 90s.
I have been an unpaid carer for my son for 32years and will be until the day I drop dead but hopefully he will go before me, living in this country now, it’s very obvious they just want disabled folk dead, so I’m hoping he goes just before me. I’m 54y old now and I haven’t been able to save anything for my retirement. I’m so scared of the future, I’m scared of now, my son needs a lot of care and if he loses his PIP, because of this disgusting lot of politicians, I lose my carers allowance, then we are fucked now, never mind when I retire!
The good news on average the longer you work the longer you live
Do you all remember 1951 when our grandparents were offered all this great stuff for not going full on tooled up rebellion for fighting a massive war and ending up in poverty?
Well… the plan was we’ed ride this blip out then put your Grand-kids and their kids back into poverty and wage slavery!
Some of you boomers might get lucky but…………………. but for the vast majority see those care home fees for your mun/dad we’re taking their house.
Aspiration………………. lol
Older people do not understand this! My fathers pension was more than I was earning until……….. well my earnings have never caught up tbf!
But…. they still think the world works in the same it did for them!
Sorry did good old Thatch in the 80 promise a roof to give to your heirs? lol!
Lots of my age group will be similar to this. Automatic enrolment for workplace pensions was only introduced by the Pensions Act 2008 and only really started in 2012. Prior to that lots of companies didn’t have pension schemes so only option was a private one and there was a lot of scepticism about private pensions as some went bust so people lost everything.
I wouldnt worry if you’re under 55, climate change induced famine & war will kill off most people before you need to retire.
Can you not top up pensions? Honestly, I think I have paid into some but do I have any fucking idea where I go to check or whatever, nope. I have no idea whatsoever what a pension is, where it is, who it is with or how it works.
I’m 42 now. I have many long friendships where people really down played what they were saving, or that they had pensions. It just wasn’t something people talked about, and when they did, they did so they would act like it was a far off concern.
But unlike this situation- they WERE saving, or waiting for inheritances, or making some kind of plans. I was too, but I was often laughed at for being “extra” or skipping certain things, I now have a few friends who don’t know what they will do, except just keep working and hope they get left a house or something. A few just don’t care yet, and some people would rather a great life experience when they’re young, over basic things when you’re very old and may not know what’s going on.
(There are others who couldn’t save or fund pensions through divorces etc, totally different thing though)
I’m 40, the thing likely saving me is buying my own place.
Even without overpayments, that is paid off before I hit retirement.
Free housing bumps me into a more comfortable position,with my admittedly rubbish pension + (lucky if we still have it) state pension.
The renters as they hit retirement I think are going to get utterly screwed
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