Published On: Sun, Oct 20th, 2019

Retirement and me: Woman on pension savings and worst case scenario plan | Personal Finance | Finance

Sandra Forbes, 49, began working for Natwest in 1988, and consistently worked for the bank for 28 years. In September 2016, the business analyst was made redundant. “They had a really good pension scheme,” she says. “Initially it was a non-contributory pension scheme and a final salary pension scheme so it’s pretty good I think compared to most pensions.”

“Women take time out to raise children which can pause payments into their pension pots for several years and this together with the gender pay gap, means their overall payments into their pots are less than their male counterparts. We know women live longer than men, meaning this is really concerning to see and is essentially a crisis waiting to happen.

Commenting on the gender pension gap, Ms Banks continues: “There is no quick fix for closing the pension deficit, the solution needs to come from a holistic, joined up effort from the individual, government and the pensions industry.

“I believe that the industry needs to take responsibility and do more to educate people on what retirement looks like now and how they can prepare, alongside incentivising people to start saving more and earlier.

“This might be through offering rewards for saving, or enhancing customers’ awareness and understanding on realistic mapping of their retirement needs against their current saving trajectory.

“These things together will make a big difference in closing the pensions gap, ensuring both men and women have sufficient savings, and that people can have the retirement they want and need.”

After being made redundant, Sandra – who tends to work Monday to Thursday – started a sports massage soft tissue therapy course and now works for herself on evenings and on a Friday.

“I call it a hobby job,” she says, and adds: “I earn a little bit of extra income from that but that amount of income is very variable.”

Looking ahead to the future, she says: “I can’t imagine wanting to or being able to retire before I’m 60.

“But, if something were to happen, if I had another sort of income that didn’t mean I had to work Monday to Thursday then I’d consider partially retiring.

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“But I haven’t got a firm age or a firm date in my mind as to when I’ll retire. I certainly don’t want to be working up until my 70s.”

Sandra, who lives on her own, is mortgage free. And, while she expects her pension to be her main source of income, she has Premium Bonds and some savings in ISAs.

“I’ve got a flat that’s in London. Worst case scenario if I’m struggling to live on my pension, and that really would be the worst case scenario, then I’d sell up my flat and move out of London,” she adds.

“But that’s not my immediate plan – that’s just a worst case scenario disaster contingency for me.

“I do expect to live off my pension but I think that also assumes that I’m in good health when I retire.

“I’m fully aware that if I’m not in good health or if I require care, I’m pretty sure my pension is not going to be enough to keep me in a care home or anything like that.

“I’d be left with absolutely no choice but to sell my flat. But I’ve accepted that and that’s why I’d prefer to live well now.”

Thinking about her future, Sandra adds: “I’ve got no mortgage and I don’t live an expensive lifestyle so I think I’m going to be OK. But that’s just it: I think I’m going to be – I don’t know for sure and I don’t know how I’d get myself into a position where I would be absolutely confident that the income that I’m going to get from my pension is going to keep me in a comfortable lifestyle.

“I say comfortable lifestyle, I’m not extravagant, I just mean I can pay for the few bills that I have, and I can feed myself and keep myself in good health.

“It might get to the point where in five years time I sit down with my financial advisor and get them to review my situation and tell me whether or not I need to do anything but at the moment that’s not my immediate plan.”

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