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A woman's work in pensions

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Edited by Anita Pilgrim, Monday, 17 Jul 2023, 14:57

A woman's work is never done. 

My job is as an academic Associate Lecturer. I put in long hours in support of my students, helping the more vulnerable and disadvantaged achieve the degree they have dreamed of. 

I do not also expect to have to work as my own pensions advisor, but in the last few years I have had to muddle my way through misinformation and highly coloured (in several senses) communications to figure out my pension provision myself. As a cis-woman, I have seen my pension provision diminish significantly. Twice the government moved my age of retirement, so I now have to work six years longer before I can start claiming my state pension (cash equivalent of losing about £70K). I was the parent who worked part time, and whose pension provision is therefore significantly smaller. I was not married to my partner, so not entitled to a share of his pension when we separated. (Luckily, he has given me as well as our daughter other generous financial support.) My employer went along with my pension fund when they proposed slashing our provision by on average 30%, and together with my colleagues I had to go out to strike to get that back - during strike periods I didn't get a salary so I also didn't get so much regular payment into my workplace pension (but it was worth it to get back the additional pension payments for myself and especially for my younger colleagues). 

I found this situation confusing and frightening, to the extent that I didn't want to find out about my pension. I worried that I would discover I would never be able to retire. However, during the last strike, and because I was approaching 60, I decided I must make effort to face the reality. (It wasn't quite as bad as I'd feared.) NB At the time I was looking, I was single. Having met someone who is also looking at retiring in the near future, I realise it's more cost-effective to retire as a couple. 

Here I want to share what I managed to find out, to help other women think about your pensions. This post is about the university pension scheme: Universities Superannuation Scheme, although other pension holders might find some of the information helpful. This is a wholly amateur account. You need to look through your pension yourself, and ask for professional advice about your pension from the government, the union or a private advisor. 

There is a lot of good information on the SAGA website about retirement options. This article from 2014 suggests you need a minimum of £15K per year to retire, however other estimates suggest that to retire comfortably, you will need between £20-30K (see for example this Guardian article from 2023). That's without factoring in a car (personally I'm already making good use of my over 60s free bus pas!), or a mortgage (you might be able to consider downsizing). 

What's the best pension provision?

I realised that my workplace pension remains the best provision for me in old age. It's better to pay more money into your workplace pension, than to set up a new separate pension fund. 

I regularly read the Financial Times Weekend paper, and about ten years ago I began looking at the Money pages. (Partly because an (even) older white man in a collared shirt at the station approached me asking if he could have the Money pages on the then correct assumption that I would not be looking at them! and out of contrariness I began to do so.) 

Following the columns, I found out that the best way to invest spare cash is an Individual Savings Account (ISA), as these allow you to save money tax free. You can do this for yourself, or you can create an ISA for your children - should you want to put aside some money for them. Of course if you pay very little tax, as I often did at times when I was only working part-time, an ISA might not be so useful to you. (Your bank almost certainly offers an ISA: you may be able to ask them for free advice.) 

I also read about a wizard investment advisor in the expert columns. They persistently recommended his funds for several years, and I even began looking at them - thinking I could create some small fund with his company. I had begun to figure out what costs might be involved and whether this would be worth it, when the wizard fell like a stick from the financial skies. His funds were all wound up by the regulator, to much wringing of hands and cries of woe. I had always thought that for some people to make money on the markets, there must be others who were losing out - and it seems that even if you are making money, you can only do so for a certain amount of time. The stocks and shares markets are a gamble, however brilliant an advisor you manage to find. If you want to try to manage some fund yourself, it will take a lot of research and you'll have to do a lot of work to do this, probably more than you do in your day job and with less returns. 

Workplace pension

You have a legal right for some of your salary to be paid into a workplace pension. This is not a kind-hearted bonus, it's a 'deferred salary' - effectively the employer is agreeing to continue paying you a salary when you retire from work, and they're taking some of your salary now to invest in a pension fund to do this. 

Particularly if you are in a casualised employment situation, you should check that your employer(s) is paying into a workplace pension for you. You may have ticked a box, or not ticked a box, to ensure this is done. 

You can also top up your pension from your salary; you can ask the Finance department to take some of your salary before it goes to you, and put it into your pension in addition to your regular contributions. Now that I work full time, and my daughter has left home for university, I've started to do this. 

State pension

You will also be entitled to a state pension, which will be a significant additional income as part of your overall retirement finances. You can check what you could be entitled to, and from what age, here. Have a careful look to see if you need to top up any contributions: in the long run, this could be well worth doing. 

Why it's worth paying into your workplace pension

Your workplace pension payments are tax and National Insurance deductible. Again, you may have to check with the Finance department that they have got your payments properly set up so that you are getting the appropriate deductions. It's well worth doing this, as the deductions can be substantial. For example, by making sure my monthly extra pension payments are down as a 'salary sacrifice', I get back about a quarter of the amount I am paying, that would otherwise be going out in NI contributions. Finance will be able to explain to you the reasons why you might not want to do the salary sacrifice. (I'm not very clear on those, it seemed well worth it to me!) 

There are sometimes additional schemes which can be worth paying into. Simply because I was interested in my pension, I noticed one called 'The Match', where if I paid an extra 1% of my salary into my pension, my employer matched it. It only lasted a year, but it was a way of getting a little extra pension provision that I could have missed if I weren't looking out for pension information.   

How much is your workplace pension worth? 

After working about a quarter of a century for various universities in various roles, I was pretty disappointed in the amount my pension showed me getting each year in retirement. Let me just say, even with the state pension added on, it was below £15K per year! However, by using the tools available on the USS website under 'My USS', I was able to figure out how much I could get by paying additional sums into my pension. I can look at different retirement ages and calculate a balance between paying extra now, against retiring later on. I feel more comfortable now that I know what my pension provision is. I am able to make an action plan based on a real idea of my financial circumstances. 

Help and advice on pensions

You can get advice from your pension provider, and make a start at figuring out your pension by looking at the USS website

The government signposts some other sources for pension advice here

As mentioned above, I found a lot of useful articles on the SAGA website giving advice about retirement. 



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