Pensions..

[T4tomo]

significant losses of capital sustained by the pension pots of family members during the last financial crisis.

what crises were these as any diminution in value that occurred in mine was recovered as the markets cycled up again. Its a long term investment so one shouldn't be concerned about short term hits?

One also might consider where would the cash have gone had they not put it in a pension scheme? because if they had spent it nstead then there would be no funds left to recover after temporary market corrections /. Crisis

 

[esoxlucius]

Pensions are long term and ups and downs are expected through the duration. You can take these fluctuations with a pinch of salt in the early years but not so much when your retirement day is looming!

In fact it can be scary when something like COVID or a war hits and pension funds plummet. And isn't it just great that they can lose a fortune in a short time, but then take an age to get back up to what they were!! Typical.

I asked my personal pension guy if I could freeze my assets completely. The obvious downside is your fund won't go up, but on the flip side it won't go down either!! And in these uncertain times I'll take that all day long.

My provider said all you can do is change your fund to an ultra low risk one, so losses and gains will be minimal. You simply can't freeze your fund, it's not an option at all. Maybe this is because providers would then no longer be able to charge you their annual management fees??

 

[FrankCrank]

I wasn't aware of that (more recent rule?). Is the last top-up deadline based on retirement age or when you start taking your pension given you can delay starting your New State Pension and then get a higher pension? I looked at delaying starting taking New State Pension but thought the numbers (at that time) made delaying not sensible (ie the increased pension amount vs lost pension income whilst delaying has too long a break even period.

Not sure what applies if you defer taking your Gov pension, might be best to visit the Gov website on that. It was on the Gov website that it stated no contributions can be made in the final year before pensionable age, that's all I know.

 

[nogoodnamesleft]

Not sure what applies if you defer taking your Gov pension, might be best to visit the Gov website on that. It was on the Gov website that it stated no contributions can be made in the final year before pensionable age, that's all I know.

Doesn't apply to me as I've already topped-up and already drawing New State Pension.

 

[Pat "5mph"]

What government pension scheme do you mean? The State pension?

I think @wafter means Nest, the government pension scheme a lot of employers use.

 

[Fastpedaller]

Pensions are long term and ups and downs are expected through the duration. You can take these fluctuations with a pinch of salt in the early years but not so much when your retirement day is looming!

In fact it can be scary when something like COVID or a war hits and pension funds plummet. And isn't it just great that they can lose a fortune in a short time, but then take an age to get back up to what they were!! Typical.

I asked my personal pension guy if I could freeze my assets completely. The obvious downside is your fund won't go up, but on the flip side it won't go down either!! And in these uncertain times I'll take that all day long.

My provider said all you can do is change your fund to an ultra low risk one, so losses and gains will be minimal. You simply can't freeze your fund, it's not an option at all. Maybe this is because providers would then no longer be able to charge you their annual management fees??

I had a small private pension that plummeted as it matured late Feb 2020 (covid)

 

[fossyant]

Take a look at what your employer offers as you'd be wise to start contributing as they usually add some on top - if you don't they won't always top it up. It's extra cash in your pension.

 

[Dorset Boy]

2015 was when the State Pension changed - moving to the new flat rate based on 35 years contributions. It is at a significantly higher level than the old basic State Pension that was based on 30 years contributions.
The old State Pension also had the potential to be topped up through the Graduated Retirement Pension, then Serps, then S2P if your earning weren't too high.

 

[wafter]

Thanks folks - lots of useful info to consider

As an aside, I can understand not trusting the Government(s).

In fact it can be scary when something like COVID or a war hits and pension funds plummet. And isn't it just great that they can lose a fortune in a short time, but then take an age to get back up to what they were!! Typical.

Thanks - appreciate you both acknowledging this as all too often daring to question the approved / accepted establishment narrative provokes a backlash..

What government pension scheme do you mean? The State pension?

I think @wafter means Nest, the government pension scheme a lot of employers use.

Tbh I'm not sure as I've never really consistently earned enough to warrant paying much attention.

Am I correct in thinking there are two; the state pension (predicated on NI contributions) and whatever other scheme the governement are pushing (I get occasional correspondence from "The People's Pension"..?

Another limit to contributing to a workplace scheme - you cannot salary sacrifice beyond the limit that would put you at the minimum wage. In other words, if you deduct your pension contribution from your salary, the remainder must be at or above minimum wage.

Thanks - a very salient point I wasn't aware of. I "earn" minimum wage so that presumably rules out any further tax relief on any contributions I might choose to make..?

Another aspect to consider is how close to retirement you are.

When I've spoken to my private pension companies about the investments (mainstream ones used to company private pension schemes) many of their investment funds change depending on the individual's age. When contributor is young the investments can take a long term view recognising there will be ups and downs but long term trend is up. But getting closer to retirement and sudden downs can badly damage the fund as there isn't time before retirement to wait for a corresponding up. This my (mainstrean) companies adjust the balance of their investments using higher return/higher risk (with long term view) when still a long time until retirement but migrating to lower return but more stable investments as one gets closer to retirement.

Thus OPs 12% might correspond to a brief "up". Some of my non-pension investments over 2025 returned more than that rate (growth not income) but in the first two months of 2026 declined in value (pre-wars, etc.).

Thanks - that's a good point about the risk. While my old dear is well into retirement, might this be a reason why her financial advisor has pushed her towards low yield (and correspondingly low risk) investments...?

You may be right about my latest statement; again it's really the first time I've paid attention and will go through all the historic statements I have to see how it's performed in past years.

The gov website, once you have your username and password, makes it simple to see when you can get your UK sate pension; how much of theoretical maximum you are currently entitled to; how many more complete National Insurance contribution years you need to get the full amount and any gap years from recent years you could fill with voluntary contributions etc.

This thread made me check my situation for the first time in a while and enlightened me to something I didn't realise.

https://www.gov.uk/check-national-insurance-record

Thanks - that's something I've been meaning to look into for ages, as I suspect with my potted employment history my NI records are pretty dire and the job of checking always gets pushed to the back of my mind in preference for whatever other crisis happens to be unfolding at the time...

 

[fossyant]

I've contributed to works schemes - since I was 18, as you could. This was before the scandals etc, but I don't know the OP's age.

Yes, it's a huge chunk of your salary, but I lived with it - 38 years on...

Without knowing the OP's situation, and age etc,

We can't comment, other than take advantage of the NEW employer/govt scheme

 

[T4tomo]

Pensions are long term and ups and downs are expected through the duration. You can take these fluctuations with a pinch of salt in the early years but not so much when your retirement day is looming!

In fact it can be scary when something like COVID or a war hits and pension funds plummet. And isn't it just great that they can lose a fortune in a short time, but then take an age to get back up to what they were!! Typical.

I asked my personal pension guy if I could freeze my assets completely. The obvious downside is your fund won't go up, but on the flip side it won't go down either!! And in these uncertain times I'll take that all day long.

My provider said all you can do is change your fund to an ultra low risk one, so losses and gains will be minimal. You simply can't freeze your fund, it's not an option at all. Maybe this is because providers would then no longer be able to charge you their annual management fees??

The 2009 financial crisis took a while to recover from, but from covid funds were back up in approx 12 months.

Your "ah but what about when nearing retirement" point has merit, and used to be critical when you had to buy an annuity with your pension fund. The typical response was to gradually de risk your fund by moving out of equities into bonds and fixed interest over the 10 years upto planned retirement

The rules are more flexible now so you can draw down out of your pot but leave the funds invested so they have time to recover from any downs, so that timing is less crucial. Still a factor if you are planning to take your 25% tax free in a lump sum (to say clear a mortgage or cruise around the world / buy a campervan) as then you only get 75% bounce back.
You are still well advised to de risk your portfolio as you head into retirement though.

Thanks - a very salient point I wasn't aware of. I "earn" minimum wage so that presumably rules out any further tax relief on any contributions I might choose to make..?

@figbats point applies to salary sacrifice schemes. This doesn't apply to a normal workplace pension scheme, which your employment legally has to offer you. You could make additional contributions (AVCs) and get tax relief providing you are earning over the £12570 zero rate band. bear in mind you will be getting tax relief on your normal contributions and be getting your employers contribution for free.

You would be a fool not to be in your employers pension scheme. Basically you put in £100 and the government and your employer put in another £100, so it has to lose 50% of its value before you back level with "stuffing it under the pillow" savings. I think from your wafflings your are in some sort of employer scheme, but its hard to tell

 

[Once a Wheeler]

A good read through this site will give you a lot of basic knowledge. Remember that if you pay taxed income into a pension scheme the government will add the tax to your contribution, so that makes it worth setting up a pension scheme. If you cannot benefit from the tax break then an ISA can be a better deal as payments from it will be free of tax and the fund has far fewer restrictions to it than a pension fund has.

is one of many, see Money Saving Expert for alternatives.

 

[fossyant]

Certainly ask at work - at least with the People's Pension it's easily transferrable as many employers will use that 'scheme' Yes there are more than one, the state pension, and anything you pay into. I've four private schemes.

It's a bit harsh someone calling you a fool, but you need to get on a scheme of some sort as an employer has to contribute something, even a few percent is better than nothing. It's very difficult to manage on state pension alone, unless you are suddenly going to become disabled at 67 and can claim additional benefits.

Both in-laws had no private pensions and it was looking very dim for them as they came upto retirement very. Unfortunately, their son died of brain cancer, but luckily for them he had a pension scheme and they were nominated for his in-service death benefit as he didn't have a married partner or kids. That kept them going for a few years, but soon after MIL had major health issues and could then claim maximum disability benefits, as well as FIL claiming the carers allowances. This sort of saved them, but it's a bit crap living another 20 years unable to do much, being wheelchair/house bound.

My folks, on the other hand, are living comfortably in a four bed house in their 80's as my dad had a decent scheme he paid into from age 18 and he retired before he was 60.

 

[Fastpedaller]

I know someone who retired when he was 45 .He's now 93, still riding his bike - good on him.
How to retire at 45........ work for Thames Water

 

[ebikeerwidnes]

I know someone who retired when he was 45 .He's now 93, still riding his bike - good on him.
How to retire at 45........ work for Thames Water

When I started teaching I noticed that nearly every school had a sort of upper limit on the age of teachers

Turned out that some idiot reckoned that teachers should be encouraged to leave at abotu 50 to allow younger teacher to start as they are what they wanted in the work force

SO they offered the serving teachers over 50 a huge incentive to leave plus a guarantee on their pension

but they didn;t calculate how much it would cost or who would pay it

so there were a lot of retired teachers in the area that were doing very well and had a guaranteed pension coming
which was being paid for in large amounts by the school their had worked for and who had had no say in whether they could leave or not

which explained a lot about schools in the area at the time!

So - to the point - government pensions can be subject to weird things based on previous decisions
so you need to contact the pension people and check in detail
(which is why I retired early - I got more that way that carrying on contributing for another few years!!)