You know how normal parents have sayings such as ‘Children should be seen and not heard?’ or ‘Manners cost nothing’ etc – well mine from as long as I remember would say, ‘You need a pension’. The importance of preparing for retirement (even at 16 years old) was drummed into me and my sister.
Just mentioning the word ‘pension’ is enough for me to simultaneously have a panic attack and also bore me to sleep. It’s an interesting mix of, ‘God, this is boring and I don’t know what the right decision is’ to ‘I’m going to be skint when I am old – like Charlie and the Chocolate Factory grandparents in a grotty bed skint.’
My (pathetic) pension history
It’s not that I wasn’t willing – I wanted to start saving badly, but life isn’t that simple is it? We all want to be super prepared for old age, but at times you don’t earn enough (well, you think you don’t anyway) or your job just doesn’t offer you one.
I count my first ‘proper’ job as working at MoneySavingExpert. The second I could get a pension, I signed up and agreed to put away 20% of my wage (I think it was that, but it was a long time ago!) and felt very smug about it too.
I worked there for about three years and trusted that the country’s best money website would pick a good pension (it was with Aviva), because I had absolutely no idea how pensions worked. My parents were very happy! I was going to be a loaded old person. I’d probably move to Miami and buy loads of designer bags with all that cash when I was 65.
After a few years at MSE, Student Money Saver came along and offered me a new job – the editor (more money!). Being the sensible girl I am, I asked about their pension scheme. They said they didn’t have one,but it was on their list of things to do, so I was happy with that.
However, it became pretty clear as the months rolled on than a pension was the last thing on their mind. So after two years of being there, I never put a single penny into a pension pot. So kids, lesson there – don’t take a ‘Yeah, on the list’ as gospel when a company is trying to get you to work for them.
However, I didn’t mind too much. I was on a decent wage, so took all the money I would have put into a pension and saved hard for the two years I was there. Literally the same week I left Student Money Saver, I had enough saved up to put down a good deposit on a flat in London.
Now I’m a freelance journalist and money blogger so am out in the big wide world alone. For a few months, I was shifting at the Sun Online, when pension panic struck and I signed up to its pension plan (Scottish Widows). I’m still actually freelancing for them, but not at the level I was – so not sure what is going on with that pension. And stupidly, I threw the paperwork in the bin because I figured I couldn’t have contributed that much to it in the first place.
So here I am, a freelancer – just starting out and panicking about a pension again. I’m now 31 years old (I don’t really know what happened to the last five years) and have sod all of a pension and no savings – although I do now own a property in London.
It’s time to face the music, I need to not only worry about paying my mortgage, but also deal with the fact I
don’t want to work till 95. And like a lot of self-employed people – some months I have plenty of money and others are pretty lean, so the idea of committing to a certain amount of money every month scares me. Plus what a faff eh?
I literally don’t know what my current pensions are doing. Like, do they make money? Lose money?
So I did a little bit of research and discovered the company PensionBee. So what they do, is they combine your old pensions and put them into a new online pension plan that you can contribute to when you want. It’s basically like online banking – but for your pension! You just need to give them some basic details to start the process.
Giving up on finding paperwork – it’s too much of a faff
Ain’t nobody got time for that.
Guys, I’m going to show you something that I’ve never shown anyone before – my paper ice bucket. Haha!
Yep, my letters and paperwork get thrown into a giant ice bucket I own which also has bottles of champagne in it. Because paperwork can be classy.
Ok, can’t find any pension paperwork (bet you’re not surprised eh?). In my defence, I just moved house so literally have no clue where anything is, I thought I’d just ring up instead.
You know what I hate more than searching the paper draws in my flat for a letter from five years ago?
Speaking to people on the phone. Awful. I don’t know how people from the 80’s and 90’s could bear it. I would literally rather walk to Mordor with those bloody Hobbits while a fiery eye looked at me, than pick up a phone to a pension company – but I needed to find out my policy information, so started dialling.
With absolutely zero knowledge (well, I know my name and the companies I worked with – just) I called up both Aviva and Scottish Widows and was pleasantly surprised how easy it was to get my info.
They both answered the phone instantly. No terrible music, or being the 1000th person on the line. They were both really nice too – explaining how it works and that they’re both still ‘live’ and invested. They were also very patient when I asked a load of stupid questions.
The bad bit – I had only paid in two months for Scottish Widows while working at News UK and saved a whopping *drumroll* £29, which to be honest, I kind of expected.
The extra bad bit – I thought I’d paid into the MSE pension for the full three years I was there, but nope – just one year! And had put away £5,000, which really isn’t going to cover those cocktails in Miami.
You have to face the bad bits to turn it around
Ok, I’m not in a great situation if I were to retire now. But I’m young and have another 30/40 years of work in me. The plan is to either become a millionaire really quickly by winning the lottery or something, or start contributing to a pension again.
Remember – just because you’re self-employed doesn’t mean you don’t get contributions. The government gives you tax relief on whatever you put in (a little tax loophole if you like…)
The grand plan
So, I’m really not one that understands stocks/bonds and all that jazz because I’ve simply not earned enough yet to have extra money lying around to invest. I’m going to consolidate the funds into one pot with PensionBee – because it gives me back control of my pension and their plans are managed by Black Rock and State Street (two of the world’s biggest money managers).
I’ll also then be able to see what I have and put away a monthly amount – or what I probably will do, cash when I have it, until my income become more steady. Will let you know how I get on with it!
If you haven’t sorted out your pension, or have pensions lying around not doing anything – don’t panic. Just face it (honestly, if I can do it, you can too).
*Heads up guys, I collaborated on this post with PensionBee*
What’s going on with your pensions? Got loads invested already? Do you have old ones you’ve forgotten about? Lets talk in the comments!