Do you have a plan for your retirement?
It’s not always a pleasant thing to start thinking about, especially if that time currently seems very far way.
Of course, the younger you start the better, but, whether you’ve started early, left it late or have other ways to fund your life after you stop work, it is vital to have a financial plan that works for you in later life.
Here, we speak to three women taking very different routes…
The early bird
Starting a pension as early as possible can make the route to retirement easier thanks to the miracle of compounding, which means that money put into your pension early will make a much bigger difference to your final pot than any you put in later. As an early bird, ensure you make the most of your advantage by maximising your contributions, particularly if your employer is chipping in.
Laura Pomfret, 37, learned the importance of pension savings early, when she had her first child at 23.
‘It was unplanned and I was a young solicitor but being a parent makes you selfless. You have to look after someone else for once. I worried about how I was ever going to put my child through nursery, so I went on a financial wellbeing journey.’
After overpaying her debts and building some savings, Laura turned to her pension. ‘After maternity I went back and paid my pension, which reduced my salary, but it had to be done. Later, when I’d bought a home, I absolutely whacked up my pension contributions, to nine or ten per cent of my salary. That means now my pension is really good.’
Laura lives in Manchester with her husband Carl and three children Ava, Albi, and Ally. She recently left her career as a lawyer and started a financial wellbeing community for women site called Financielle. However, she ensures she continues to contribute as much as she can to her pension and encourages her husband to do the same.
After more than a decade of making pension contributions, she says she can now see that her money works ‘while she sleeps’, growing over time thanks to the miracle of compounding.
‘I literally did nothing special. It was just time and keeping doing it,’ she says of her pension pot. She urges other young people to get started on their pensions as soon as possible.
‘If you’re paying Netflix and you’re paying Spotify and you’re paying the golf club, you should be paying your pension,’ she says.
The mid-life maximiser
Even if you haven’t managed to save into your pension at the early stages of your career, having a plan at a later stage can pay off, especially if you take a multi-pronged approach to building assets for the future.
At 43, Kate Flounders knows she needs to have a retirement plan, but as a self-employed freelancer it can be difficult to put the future first.
‘I’m the director of my own company, the Safeguarding Association,’ she says. ‘It has been running for about ten years, and before that I worked in a number of jobs where pensions were available but they weren’t necessarily the greatest. Only little amounts went in.’ Since getting divorced in 2022, Kate has begun to put time into retirement planning, realising that although she feels on the back foot, there are many steps she can take.
‘I’m building portfolios, slowly, looking at where I invest any profits out of the business on an annual basis and increasing the value of my house as much as I’m able to,’ she says.
‘In the long term I will reap rewards in terms of having assets available.’
Kate is spending money on extending and improving her house so that its value increases and she can downsize or use equity release later if she needs to, and is also beginning to put money into investments, and learning about how they work.
‘I’ve no idea what the financial landscape will look like by the time I come to retire, so I want to give myself options,’ she says.
Kate, who lives in Hartlepool, says that she often feels there is a ‘level of telling off’ when you haven’t started your pension saving early, which is not always helpful.
‘When you are earning little money and trying to have some semblance of a life it is really difficult,’ she says. ‘When I was in my late teens and early 20s there was a lot of stuff out there but it was mostly jargon.
‘I’m realistic that my pension pot isn’t where it should be or where I would like it to be, but I’m also not going to beat myself up about that, because what’s gone is gone.
‘I can’t make that back up again but I look forward and at how I can make the most of my earning capacity now and what percentage of that I need to be putting into various things.’
The late developer
If you’ve reached retirement age but still don’t have quite enough to live on, thinking outside the box can help you to find other ways to raise cash.
Solutions may include equity release if you own your home and want to take cash from it for retirement but there are increasing numbers of people who are continuing to work part time or taking on a ‘side hustle’, using skills built throughout their lives.
A recent study by Smart Energy found that four in ten over-60s have started a new business or money-making venture to help them to ease into retirement.
Jane Keighly, 67, a former bookseller, is now working beyond retirement to help fund her lifestyle doing something she has always loved.
‘I’m part of the generation who did some work around my children but I don’t really have any good pensions apart from my state one,’ say Jane.
The former bookseller supplements her retirement income by running historic walks in her home town of Boston, having started a walking business just before the pandemic.
‘I was impassioned about local history, having grown up with it,’ she says. ‘I started the walks because actually quite a lot of people come to our city and want to learn about it.
‘It gets me out and about, keeps me fit and earns me a bit of money.
‘I couldn’t afford a big outlay for a shop or something, so this is was an ideal thing. I’ve got my passion for travel and history, and this is something I can do.
‘A lot of my friends are doing similar things – making some money and enjoying their retirement.’
She hasn’t got a plan about when she will wind down her walks and just hopes to keep going.
‘I’m trying to keep healthy but doing this motivates me a good deal,’ she says.
