My Big regret...if only I had saved more into my pension
IT’S the 30th anniversary of Big – the fantasy film starring Tom Hanks about 12-year-old Josh who was impatient to grow up, and who got his wish to hilarious effect. But he didn’t much like the often scary world of a thirtysomething adult and soon wanted to be back where he started.
I wouldn’t mind rewinding 30 years to when I first saw the movie. Such time travel appeals for all sorts of reasons (mainly the search for eternal youth).
Given the chance, I would do certain practical things differently – particularly being more prudent about saving for the future. Retirement saving was not my priority back then and I procrastinated for years before starting a pension, letting the savings habit slip during a period of freelancing. Nowadays with that once far off future now rattling ever closer, I am having to dig deeper into my pockets to try to plug the pension gap. All this at a time when I would rather be spending disposable income on more exciting purchases (tickets to the musical Hamilton, for instance). The good news is that unlike me, young people nowadays are starting to save earlier – in large part thanks to the Government’s auto-enrolment programme.
Now almost everyone is forced to put money into a pension unless they opt out. New Department for Work and Pensions figures show 84 per cent of workers are saving, with a marked increase among the younger generation.
This rise is impressive. But worryingly, the sums being put aside are slipping. The average private sector worker’s pension contribution last year declined to a low of £3,873 – down from £6,782 in 2012. Take it from me, with 30 years of hindsight, this is not a good trend. And the selfemployed are not currently part of the auto-enrolment programme.
Figures from provider Royal London suggest a 25-year-old wanting to retire at 65 on an income of about £19,000 (including state pension) would need to save 16 per cent of their income (£370 a month); a 35-yearold 23 per cent (£550 a month); and a 45-year-old 39 per cent (£900 a month). Start early for less pain and more gain, I say. WHEN I was about 12, I recall hearing a now little-known slogan employed by TSB – ‘TSB: that’s the bank for me’. Some of you might remember it – and probably now more wryly as you watch the soap opera of today’s TSB’s IT disaster continue to unfold.
The Financial Conduct Authority is preparing to step in to investigate the mess that has led to nearly 100,000 complaints and seen 1,300 customers defrauded by crooks, with untold numbers unable to access their own accounts while being able to view strangers’ financial details.
TSB boss Paul Pester must be wishing he could transport himself either a few years into the future (into a new job or a cushy retirement) or far enough in to the past that he could reconsider decisions made – such as turning down the chance to keep his bank’s computer systems running alongside that of former owner Lloyds Banking for longer.
Many of its customers are questioning whether TSB should be their bank at all since the tech meltdown – indeed 12,500 have decided TSB isn’t the bank for them and switched. Who can blame them?