Why The “Plan” Your Parents Followed No Longer Works





Ok, so I think it’s time for a little real-talk and a little butt-kicking motivation. I was reading a post on Refinery29’s facebook group from an anonymous woman who wanted to opt out of her workplace pension because she saw that her contributions are now increasing in April this year and she feels she can’t afford it because she’s saving to buy a house.

She was asking the group what they thought of this. I know that she’s not alone, because I have met several colleagues and friends who have done the same thing.

Thankfully she was met with a whole load of women who told her that this would be a MASSIVE mistake, and she’d regret it in years to come.

I have to say that I was so happy to see this – there are some very savvy ladies out there! They have recognised that we have to take responsibility for ourselves in retirement, and contributing to a pension is one way in which this is ensured.

Opting out of your pension is like cutting down a fruit tree before the fruit appears. You won’t get any apples, but you’ll get some leaves and bark to nibble on.



Opting Out Is A Bad Idea

I know everyone is entitled to their own opinion, but my opinion is, opting out of your pension is a very bad idea, UNLESS you have some other scheme set up that will bring you in enough income to keep you going when you retire.

And unless that plan is robust and sustainable, I wouldn’t risk not having a pension.

If you’re employed, your employer must BY LAW contribute to your pension too. It’s free money to go towards to your retirement. This money is for your future-self to use. If you rob her, you’re cutting off your nose to spite your face.

I want to go through why you shouldn’t opt out in this post, in the hopes that you’ll change your mind.

We’re in a crisis

In addition to this, in case you hadn’t noticed or heard, the country is in a mess at the moment. Brexit is sending everyone into a tizz, and don’t even get me started on the NHS/Police/Teaching etc. Public services are in deficit and they are struggling to cope with the work load.

But the thing with public services is, at least they provide a decent pension. We’ve all had to pay in a lot of money to stay in it, and while it’s not as good as previous years, it’s better than a lot of private pensions.

But I’ve realised that even this is not enough for me. I plugged my numbers into Standard Life’s retirement calculator and it is a far cry from the number I had in my head for retirement.

Panic stations!!

What About Your Pension

See, the thing is, I’m paying in a decent amount of money – 9.3%. My employer is paying in 14.3%. That’s a whopping 23.6% per year! Yet this is still not enough for what I feel I would want in retirement, so I am making additional provisions to ensure that I have multiple sources of income without having to rely on my pension (which doesn’t even exist yet anyway – it’s all on paper!).

What about yours? Do you even know?

If you’re in auto-enrollment, and only pay in the minimum, your contributions are far smaller than mine. So if I think I’ll struggle, what about you??

Plug your numbers into a retirement calculator as well and see where it lands you. I bet you’ll be shocked.

The plan our parents and our grandparents followed of school, work, retire just DOESN’T work anymore.

The Plan Our Parents Followed No Longer Works

So life for our parents and grandparents went something like this:

Go to school, get a job, work for however many years. Women on the whole probably left to have babies because that’s, you know, that was just the traditional model back then (and still is). Dad carried on working to support mum and the family. He has his pension from his workplace, and this was probably a final salary pension (doesn’t exist for us). Then dad retires, and his pension is enough to keep both him and mum comfortable, perhaps not extravagantly so, but they’re comfortable.

Retirement is not expected to be a long process. In fact, many older generations died a few short years into their retirement. Companies didn’t need to pay out for too long.

Thankfully, our parents are expected to live longer, and companies have got wise to this. Younger generations now have to pay in MORE money for LESS pension, because companies simply cannot afford it.

So don’t use this as an excuse to opt out of your pension, it just shows that you need to stay in it AND you need to put even more towards your future. Your work-place pension is one part of the puzzle that is your retirement fund. Here’s why else you need to be wise to this:

Life Expectancy

Life expectancy is dramatically changing. If you look at the OECD national database, then you’ll see that the life expectancy for women especially has increased over time. So actually for women in the UK, the life expectancy now is around 83 years. For men it is around 79.4.

So not only are we getting to retirement and then potentially living for a good 20, 30 years, but as women we’re also living longer, which means our pensions have to last that little bit longer.

Ageing people also get sicker. We know this. So add to this the impact of needing to pay for a care home at £1000 per week when we can no longer look after ourselves, and you’ll soon see how fast your money runs out.


It’s really important to be aware of this, because the other part of the issue is that women still are the ones that tend to take the time out to have babies. Not only do we enjoy long maternity leave; many women will drop their hours to care for their babies. Some through choice, and some through bloody expensive childcare costs.

There is also still this underlying expectation that women will be the main caregivers, although thankfully that is starting to change as men do want to be more involved in their children’s upbringing. But we’re a long way off from full equality on this.

Long time out of work = smaller pension. Couple this with living longer, and it doesn’t take a genius to see that women have a bigger problem on their hands.


Debt is always a topic for discussion when it comes to money. Personal debt is rapidly increasing as the years go by, and we owe far more than our parents and grandparents ever did.

Student loans are one example of how this has changed. Just 16 years ago, when I was going into medical school, my yearly fee was £1500. Now it’s over £9,000!! While I agree that education is worth spending money on, just this very fact alone is putting the younger generations in a more precarious position from the start of their working lives.

Wages have stagnated too, and don’t keep up with inflation. This means our money doesn’t stretch as far. Couple this with lack of financial education, the pressure from social media to take holidays and buy nice things, pressure from society to save for a home or raise a family, and the debt situation gets worse, not better.

No wonder there is temptation to opt out of paying into a pension! But please don’t use it as a reason to opt out! You need to be paying off debt AND paying towards your future.

Final Thoughts

So with all the doom and gloom it’s very easy for us to stick two fingers up at life and just ignore the situation. We can happily live our lives from one Friday night to the next, fretting over daily issues like should I buy a latte or not or where we should go on holiday this year.

But just for a second, step back and see the bigger picture. We’re sleepwalking into a very real problem. We can kid ourselves that auto enrolment is giving us the funds that we need to be able to retire with a nice, comfortable amount of money like our parents and our grandparents.

But as you can see, it’s not enough.

Take this opportunity to assess where you are. How much is your pension predicted to be? Do you have other streams of income? Don’t leave it to chance, and don’t leave it to someone else.

Now, if you want to talk about this more, I’m happy to support you. I’m not a financial adviser, so I can’t give you tips on where exactly to put your money, but I can help to point you in the right direct. For specifics, you need to seek proper guidance from a pension planner, but I can certainly help you see the bigger picture.

I would love to have a chat with you one on one. Please feel free to hop onto my calendar and pick a time and a date that works for you.

For more peer support too, there’s also my Facebook group.

You’re not on your own, and you do have time if you start NOW. You’ve got this!




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