When I joined my third financial services employer, I was mid-twenties and pursuing a career as a financial adviser (pensions were kinda my thing).
The firm I worked for had a big parent company who offered a generous pension scheme to all staff. In my case I was shown paperwork that listed a 10% company contribution, with no need of a contribution by me.
I had just bought my first home with my fiance and retirement seemed a long way off.
I joined the scheme and opted not to add any of my own money to the pension.
Five years later I discovered that the ‘10% contribution’ had cost my employer nothing, it was a rebate for being opted out of an element of the state pension that when divided by my starting salary added up to 10%.
Here I now was a 30 year old pension adviser with no pension.
I had been advising people about pensions for several years at this point but had neglected to advise myself. I spent the next decade throwing as much of my own money at that pension as I could (going without some luxuries to be able to afford it).
As they say ‘cobblers children go unshod, isn’t it easy to neglect to take care of your own affairs when you are responsible for someone else’s.
I am not sure I have ever ‘confessed’ to this major mistake, but was prompted to by a brilliant, and brutally honest substack article by Dr Eliza Filby author of Inheritocracy.
I am a belong to the missed pension generation that she describes, too young to get a Final Salary pension but too old to benefit from Auto-Enrolment in my crucial early years of work. I am lucky that I have the knowledge and experience to make up for my mistake, but there are thousands of people in the UK not as lucky as me.
Auto-enrolment into pension was a great import from Australia and should have been reviewed and the minimum payments increased by now. This should have, and still could, secure a good retirement for the majority of employees.
There is still a huge pension gap for the self-employed who number more than they used to and have lower pension saving rates than they used to. Gig workers are the worst effected, with no job security, stable income or pension entitlements. More work needs to be done by government in this area and we will expand on this in a future blog.
For today though, our message is to put on your own oxygen mask before others.
Take the time today to check what your pensions will give you as a retirement lifestyle. The best time to increase your contributions was when you were 25, the second best time is today.
If you want help projecting your retirement lifestyle and making adjustments to improve it, contact our office in Hook, Hampshire to speak with one of our advisers.