The following is a transcript of a bonus podcast episode of The Pension Confident Podcast. Listen to the episode or scroll on to read the conversation.
PHILIPPA: Hi. Today, we’re doing something new. We’re going to hear from Tara-Jane.
TARA-JANE: The scary thing is, I could’ve retired at 44, and I would’ve had a seven figure sum in my bank account.
PHILIPPA: Like you, she listens to the podcast, and for this bonus episode, she’s going to tell us all about her own journey with pensions and what she’s learned so far.
I’m Philippa Lamb, and if you haven’t got around to subscribing to the podcast yet, you can do it right now by clicking on the link. That way, you’ll never miss an episode.
Now, like many of us, Tara-Jane has faced her share of financial challenges over the years, so her savings have gone up and down, and there was a long spell when she didn’t manage to pay into her pension at all. But she’s got herself in a good place now, and today, she’s going to tell us how she managed that, and crucially, what she learned along the way. There are good lessons for every saver in this, young and old. And I’ve got a PensionBee expert with me, Rachael Oku, who’s VP Brand and Communications. She’s going to help me pull out all the tips you might want to take from Tara-Jane’s story.
Just before we get into it, here’s the usual disclaimer. Please do remember, anything discussed on this podcast shouldn’t be regarded as financial advice or legal advice, and when investing your capital is at risk.
PHILIPPA: Here’s Tara-Jane talking about how she started her first pension.
Starting a pension at 17 years old
TARA-JANE: Hello, my name is Tara-Jane Sloan. I’m 53 years of age, and I’m a Founder and Managing Director of my own company.
I was actually 17 years old, so relatively young. My father was the one who drove the decision to pay into a pension scheme, and that was because I come from a very working-class background. My mother was a nurse for the NHS, and my father worked for the majority of his life in the steelworks in the heart of the Black Country. So for us, money wasn’t plentiful. They really considered every purchase they made, making sure that it was budgeted for properly.
And so my father just wanted to make sure that I was already starting to plan for my later years from the point in which I was starting to earn a salary. So we took advice, and before we knew it, the three of us had signed into a private pension scheme. So I paid into that pension scheme from the age of 17 to the age of 21. And at 21 years old, I’d already been three years at my employer at the time, and I got given the opportunity to opt into a pretty lucrative company pension scheme.
So I stopped paying into my private pension and started paying into the company pension. And I did that from the age of 21 to 27. Continually, every single month, increasing my contributions. At this point, I haven’t got a house, I wasn’t married. Actually, financially, I was able to commit extra to my pension every single year.
PHILIPPA: So, Rachael, Tara-Jane, it seems to me she got off to a great start, didn’t she? She opened a private pension. She was only 17 [years old]. There are a lot of benefits starting that young, right?
RACHAEL: Yeah, absolutely. I mean, kudos to Tara-Jane’s parents. What a great job they did introducing her to pensions at such a young age. I wish I’d had that experience.
PHILIPPA: Yeah, because then you get the long-term benefit of compounding your money, compound interest on your savings.
RACHAEL: Well, exactly. Compound growth does the heavy lifting for you. Just for people that aren’t familiar with the term, it’s basically when your investment earnings generate their own earnings. You’re making money on your money, plus all the money that you’ve already made.
PHILIPPA: When she was able to join a workplace scheme, she did, which is obviously a great idea, she did then stop paying into that private pension, didn’t she? She could’ve continued and paid into both, couldn’t she? Assuming she could’ve afforded to do so. I’m guessing that’s a mistake people make, they’re thinking they can only have one pension open at a time.
RACHAEL: Yeah, absolutely. I think the thing to remember is that you can have as many pensions as you want. You just have to be mindful of the contributions that you’re making. The annual contribution allowance is either 100% of your salary or £60,000, whichever is lower (2025/26). You just need to make sure that however many pensions you have, your contributions don’t exceed that amount.
PHILIPPA: OK. Now, she’s 53. Obviously, this was before Auto-Enrolment. She didn’t miss out on employer contributions. And today, it wouldn’t be such a great idea to have opted out, would it? Because it’s free money from your employer.
RACHAEL: It’s free money from your employer. If you work in the UK, are at least 22 years or older, up to State Pension age, which is currently 66 (rising to 67 from 2028), you earn more £10,000, and are a member of a suitable workplace scheme, your employer is obliged to enrol you. If you were to opt out of your workplace scheme now, you’d be losing that free money from your employer, which over time could add up to be quite a lot.
PHILIPPA: She was also really sensible in that she adjusted her contributions as she went, which is a great strategy, isn’t it?
RACHAEL: Yeah, absolutely. I think you can either do it manually, so when you get a pay rise, you can calculate how much extra you might want to put into your pension, or other savings vehicles. But perhaps the easiest way to do it’s to just pay a flat percentage into your pension. So the more your salary increases, the percentage automatically increases as well.
PHILIPPA: Right. So if you get a 5% [pay] rise, you pay in another 5%?
RACHAEL: Yeah.
PHILIPPA: Or as you say, just pick a number, but as long as it continues to go up, as long as you earn more.
RACHAEL: Yeah.
PHILIPPA: OK. You can use the PensionBeee Pension Calculator for that, can’t you? To see what impact that will have. It’s quite encouraging.
RACHAEL: Yes! So you can use PensionBee’s Pension Calculator to see the impact of adjusting your contributions. And it really helps you visualise the impact that making small changes now can impact your eventual retirement pot.
PHILIPPA: OK, let’s hear a bit more from Tara-Jane.
Spending on the present, without saving for the future
TARA-JANE: At the age of 27, I left the job that I was in, relocated to the Midlands. At that point, I was no longer then paying into a company pension scheme. At no point did I ever stop to think about picking up the payments into my private pension scheme. The thought never even crossed my mind. Instead, money was spent on renovating a house, going on holidays, and starting to build my married life.
Then fast forward to my early 30s, that marriage broke down. I found myself having to pay myself out of a very hefty divorce settlement and then having to resurrect my single life by buying another house. So all of this time, all of my money was going into other areas of my life. I wish I’d known then what I know now, which is for all of the years that I didn’t pay into my pension, what impact that would have on the trajectory moving forward. So I actually found myself in a position where I actually didn’t have any pension investments for nearly 20 years.
PHILIPPA: No pension investments for nearly 20 years. Ouch! Let’s start with when she left that job, she’s no longer paying into the workplace scheme. What happens to that pension?
RACHAEL: So when you stop paying into the pension, it stays where it is. It doesn’t automatically follow you anywhere. It stays with that pension provider, and typically, you’ll be paying an annual management fee. If you’re not getting any new contributions into that pension from either yourself or your employer, you just have a fixed sum, and every year that’s being eroded by pension charges. Depending on how big the pot is, you could find that when you come closer to retirement, that there’s very little and sometimes nothing left in that small pot.
PHILIPPA: Yeah, it’s not great, is it? It’s so easy to forget about workplace pensions, particularly if they’re just little ones.
RACHAEL: Yeah, we did some analysis with the Centre for Economics and Business Research that found that over £50 billion is thought to be at risk of being lost and left behind by savers who’ve just simply forgotten about old workplace pensions.
PHILIPPA: At this moment, she isn’t paying into a workplace scheme. She doesn’t restart the private pension payments. Lots of listeners are going to be in that same situation. Life takes over, stuff happens. Other priorities take precedence, particularly if you’re starting a family or you’re buying property. What advice do we have for people to balance these things out and not neglect their retirement savings?
RACHAEL: There are a few things that you can do. You can, of course, set it and forget about it, automating your savings, so you don’t have to think too much about it. But as I said earlier, it’s a habit. If you have more disposable income, you don’t necessarily notice it coming out. But when you need to pay for other things, there are more pressing expenses. It makes sense to consider reducing it, rather than stopping altogether, if that’s a possibility. But then if you do have to stop, to give yourself some grace, just commit to restarting it as soon as you can. Whether that’s setting a reminder to check in three-to-six months or a bit further down the line, the thing to avoid, if possible, is to forget to set it back up again.
PHILIPPA: Tara-Jane, she goes on, she divorces her partner, and of course, she has to refocus on building her life. Thinking about pension savings and divorce, can you just remind us about the options for splitting pension assets when you get divorced?
RACHAEL: There are a few different options for splitting a pension when you’re going through a divorce, but the most common one here in the UK is a Pension Sharing Order (PSO). Essentially, that means that you take a percentage share of your former partner’s pension by either joining their scheme or having it transferred into a scheme in your name. You have to have a pension in order to do this or set one up.
PHILIPPA: Or of course, it may be they take a bit of your pension.
RACHAEL: Absolutely, [it] works both ways.
PHILIPPA: Yeah, OK. But the key thing isn’t to forget about pensions when you’re going through a divorce.
RACHAEL: Yeah. If anybody finds themselves in a similar situation to Tara-Jane, contemplating or going through a divorce, they should absolutely consider their pension within that. It’s not just about the marital home or cash savings. Pensions can be really valuable as well.
PHILIPPA: OK, let’s get back to Tara-Jane’s story.
Frustrations with rising State Pension age
TARA-JANE: One of the biggest frustrations that I have, it sits around the constant changes to the State Pension age, so what the government are doing. We all know we can’t hide away from the fact that the State Pension age is being increased, and I think it’s moving up to 67 [years old] shortly. So for me, I’ve been planning and investing and trying to pay into my scheme so that I can plan for a specific age that I can retire.
So I’ve built supplementary strategies around the State Pension. And then, lo and behold, that age limit stretches again. So it means that whatever structural plan that I’ve built to support the State Pension age means nothing. I’ve got to go back to the drawing board, and I’ve got to look at how much more I’ve got to reinvest so that I can support getting me to the State Pension age. So it just feels like the goalposts are constantly moving.
PHILIPPA: I think a lot of people will be sharing Tara-Jane’s frustration around this, the changing State Pension age. It makes it so difficult to plan, doesn’t it?
RACHAEL: It does. This is a really tricky one because no one really knows what’s going to happen in the future, especially the politicians. To be fair to them, it’s hard to predict. When we look at it today, it’s really expensive. We have an ageing population. It’s going to become even more unsustainable in the future. So something’s going to have to change. But the fundamentals of what and when, who knows?
PHILIPPA: It’s a bit of a tanker, isn’t it? You can’t turn it around at the last minute. So even if we get decent amounts of warning about the changes in the State Pension age, but even with a good few years warning, it’s hard to make up the difference, isn’t it?
RACHAEL: Yeah, especially when we’re talking about the amount of money over a period of years. It’s a lot of money to have to come up with yourself or via other means.
PHILIPPA: Let’s just talk about the State Pension. We haven’t really talked much about that. Eligibility, how much you get, where are we right now?
RACHAEL: Sure. I think the main thing to point out here is that not everybody is automatically entitled to the State Pension. You have to work for and pay in National Insurance Contributions (NICs) for a minimum of 10 years to qualify for the basic amount. Then it’s 35 years for the full [new] State Pension, which is currently worth £230.25 a week, which works out It’s about £12,000 a year (2025/26).
PHILIPPA: OK. You can go online, can’t you, and check how many years you’ve got?
RACHAEL: Yeah, you can go on GOV.UK and have a look.
PHILIPPA: If you’ve got gaps, maybe you’ve taken time out to raise kids or look after other people, or you weren’t working, whatever it might be, you might have gaps in your contributions. You can buy back some of the years you didn’t pay. Is that right?
RACHAEL: You can, yeah. It’s possible to buy back some of the years. There are certain criteria around when and how, but you can definitely look into that.
PHILIPPA: OK. So the State Pension currently is just shy of £12,000 a year (2025/26). A lot of people are going to need to supplement that with all the savings.
RACHAEL: Yes, definitely. I mean, £12,000 might be enough to scrape by depending on where you live in the country, but it’s definitely not enough for a happy retirement. So Pensions UK have published what’s called the Retirement Living Standards. They update every year. For the minimum level of retirement, there are three levels. There’s minimum, moderate, and comfortable. For the minimum, they’re saying that one person needs £13,400, and it goes up to a bit more, it’s £21,600 for a couple. So even for a basic minimum level of living, you need a grand and a half more than the State Pension. So it’s not going to get you all the way there.
PHILIPPA: And that’s absolutely at the bottom end.
RACHAEL: Yeah. And if you want something that’s moderate for one person, it’s £31,700. And if you’re going for something more comfortable, which is holidays, new cars, that thing, every so often, for one person, it’s £43,900. So the State Pension is really not getting you there at all on its own.
PHILIPPA: So let’s hear more from Tara-Jane.
When was the last time you did a pension review?
TARA-JANE: When my mum said to me, “you really need to think about getting all of your ducks in a row, getting all of your financial situation into a very clear, structured place. When was the last time you did a pension review? When was the last time you looked at maybe your ISAs or where your money is sitting? And is it working hard enough for you?”.
And it really took me aback that it took my very sick mother to make me sit down and think, I’ve never, ever thought about what’s fast approaching, and that’s my retirement. Now, the scary thing is I could’ve retired at 44, and I would’ve had a seven figure sum in my bank account. Now, that gives me chills when I actually stop and think about how by not investing into a pension for 20 years, it’s meant that I’m now going to be working till probably early to mid-60s, which is going to be like a lot of the people out there, and probably later.
PHILIPPA: I’m going to say I think that Tara-Jane’s mum sounds like a fantastic woman, giving her that heads up on, you need to start saving again, because we can really see the impact of that, can’t we? Of that 20-year break.
RACHAEL: Yeah, it’s really painful, but I guess it does illustrate the power of pensions, but also why it’s never too late to start, especially not at 53 [years old].
PHILIPPA: So all hope isn’t lost. It doesn’t matter how old you are. It’s always worth looking at this, not burying your head in the sand. What can people do if they have had to take a break from making contributions then? We’ve talked about topping up the State Pension.
RACHAEL: Yeah, you can also top up your personal, private [and] workplace pensions. If you have a workplace pension and your employer is particularly generous, you might want to increase your payments into that so they’ll potentially match them. Tracking down your pots is probably the biggest thing. As we said earlier, with Auto-Enrolment, now in particular, people have so many pots and they don’t move with you. The onus is on you as the saver to do something with them once you change jobs.
PHILIPPA: Yeah, because these little stubborn pensions that so many of us have, aren’t they? You can end up with loads of them by the time you’re later in life. Of course, as you say, you’re paying charges on all of them, even if no one’s contributing into them.
RACHAEL: Exactly. For most people, it makes sense to try and bring them all together so you can see how much you’re paying in fees, what your balance is, and how your investments are performing. But then also there are strategies when you get to a point in life where you can access your pension. At the moment, you can access your pension (personal, workplace) from the age of 55, and that’s rising to 57 in 2028. At 55, you can get 25% tax-free. You can withdraw that.
PHILIPPA: A lump sum.
RACHAEL: A lump sum. I think if you’re wondering if you’ll have enough later in life, one option could be to consider not taking up that 25% at 55 [years old] and leaving that invested so that it has longer to grow.
PHILIPPA: Yeah, because by that stage, it might be quite a substantial amount of money. As we say, even later on in life, those contributions, if you’re able to put them in, that’s great. If you’re to leave them in, that’s great, because it’s never too late to be doing this. We say this every time, but there’s no point at which you think, “you know what? I’ve missed the boat. There’s no point saving”.
RACHAEL: Totally, yeah. I mean, yesterday is the best time to have started saving, but today works as well. It really is never too late. We’re actually finding that PensionBee customers in their 70s are contributing more than I would’ve expected. It’s surprising, but the theory is that they’re not thinking about themselves anymore. They’re thinking about their families and how they can maybe pass on their wealth.
PHILIPPA: Or maybe they’re just thinking, “I feel great. I’m going to be needing money for years to come”.
RACHAEL: Well, when we do talk about projecting how much you’ll need, particularly for people who are at the younger end of their working lives at the moment, we say that they should plan to live to 100 [years old].
PHILIPPA: People in their 70s, they’re just spring chickens, right?
RACHAEL: Yeah, lots of fun to be had.
PHILIPPA: That’s great. Rachael, thanks so much.
RACHAEL: Thank you for having me.
PHILIPPA: We hope that’s been a helpful episode. A huge thanks to Tara-Jane for sharing her story with us, and of course, to Rachael for being here today. We’re going to be hearing more listeners’ pension stories in the coming months. If you subscribe to the podcast, we’ll send you a notification whenever a new one drops.
If you’d like to find out more about the points that came out of Tara-Jane’s story, head to the show notes on this episode. You can find them on your app or on the website. We shared a tonne of resources there for you to look through. Here’s a final reminder before we go, that anything discussed on the podcast shouldn’t be regarded as financial advice or legal investing, your capital is at risk. Thanks for being with us.
Risk warning
As always with investments, your capital is at risk. The value of your investment can go down as well as up, and you may get back less than you invest. This information should not be regarded as financial advice.
