I Don’t Have a Pension…What Should I Do?
Do you have a pension that you have been paying into since you began working? If you do, I’m completely jealous!
One of the best things about stepping into the personal finance blogging world, is that you read lots of other blogs from people who are at different stages in their financial journey, and can therefore offer lots of great advice.
Something that I have learnt is very important is to have savings for your future generally, but more specifically – retirement. The state pension age is currently 65 for men and 64 for women. It’s been steadily increasing and I have no idea what it will be when I am older – I’m sure that it will have changed by then! The current prediction for people in their 20’s currently is a retirement age of 68. I’ve also been reading about the gender pay gap and the difference in pension pots is staggering – and you also must have worked 30 years to get a full state pension!
Saving for retirement is something that I have noticed people over the pond in the US they are very good at – I see a lot popping up about ‘maxing out your 401k’ and similar. In the UK, I don’t think we are focused too much on our pension pots. This is obviously generally speaking – there are many people who are very good at saving and thinking about retirement.
The problem is, our brains are wired to think about the now. We don’t tend to think decades down the line – what we will want and need – but we need to.
As you may have seen from my previous posts and social media, I have recently paid off my consumer debt, and because I have been focusing on getting my expenses as low as possible and earning more, I’ve now found myself in the position of having a lot more money than I am used to.
I have lots of new goals now that my debt is paid off – mainly financial ones. I am looking to the future, but I’m a bit nervous because I have no idea how much I have in my pension pots. I am self employed and have been for 4 years, but I have not been putting anything aside for retirement.
As anyone who is good at saving and investments will know, the sooner you get started the better. I’m kicking myself now because I haven’t been putting anything aside, but I was struggling on a small income and then concentrating on paying off my debt. Now that my debt is gone and I am earning more, I am in the position of being able to start positively saving money for the future.
I came across a great company called PensionBee who combine all of the pension pots that you have been contributing to (for example, if you have had a few different jobs it’s likely you would have had separate pensions with each) – and I think most people can confess to being pretty bad at keeping track of all their pensions. Confession – I can’t even find my paperwork!
You just need to give them some basic info about your old employers plus any policy details if you have them. Once they track down your various pension pots, you are able to combine them into one, and keep track of it on their site. You can also then add a one-off contribution or regular contributions to your pension pot.
They take a management fee of 0.5%, 0.6% or 0.7% of your pension which covers all costs. I’ve been doing some research into the various risks – they don’t manage your money, it’s done by investors. They are some of the biggest in the world – BlackRock and State Street. If PensionBee went bust at any point, nothing would happen to your money because it is with the investors. They also have excellent feedback on Trustpilot from people who have used them, which is good.
This is definitely something that interests me, because I would love to have a place where it is simple and easy to access and control my pension, to be able to see how much is in there and be able to add contributions to it.
There is also the state pension, but if you get the full 35 years of National Insurance credits, you are expected to have a pension of up to £8,092 a year – this amount worries me. It’s definitely important to also pay into a personal or workplace pension. With my new part time job I have asked to join their pension scheme – the amount is SO tiny though.
Of course, PensionBee might not be the right option for everyone with old workplace pensions, especially people who are still in valuable final salary schemes. There are some good reasons for consolidating small pots but other pension schemes should be left alone.
Because I have a small pension pot this is definitely something that I am going to look into because I feel that it would be beneficial for me. I’m going to check through my options and go from there!
PensionBee sponsored this post, but all opinions are my own. Nothing in this post should be taken as financial advice. As with all pensions, your capital is at risk. Seek financial advice if you’re unsure whether PensionBee or any other pension solution mentioned is right for you.
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