Pension pots

price of beauty

Now I still have two essays to finish before Friday, so as you can imagine I am in full-blown procrastination mode. You should see the kitchen – it’s immaculate. When Jack went in there yesterday to help himself to a drink he actually screamed, “Mu-um! What’s happened to the fridge!” He’s so used to negotiating his way through stacks of half-filled saucepans of yesterday’s spaghetti sauce and curry to get to the apple juice that he couldn’t believe the loveliness of gleaming glass shelves tastefully adorned with pots of unfurry yoghurt and still-crisp salad. There was even a cold roast chicken wrapped in cling film.

I haven’t heard quite such a yelp of surprise since I made the mistake of putting the Hoover on in the same room as a dozing Doughnut. The unexpected roar of domesticity sent him scampering to his feet like Bambi on ice. “Surely he’s used to that noise,” commented a tidy, naïve friend. “Of course!” I replied, “he must have been dreaming of the track.” Ella just raised one perfectly arched eyebrow. Archly.

Anyway, where was I? Oh yes, procrastination. For some reason this always makes me think of pensions, something so many of us are so good at putting off planning. My mate Tom McPhail, head of pensions research at Hargreaves Lansdown has just emailed to let me know about some data released by the Office for National Statistics (ONS) today, which shows that membership of private pensions has hit an all-time low.

According to the ONS, just 35% of men and 32% of women aged between 16 and 64 were active members of a private pension in 2011/12. That means that not only are we going to have to wait longer before we qualify for the state pension but even with the new, slightly more generous state pension that comes into effect in April 2016, unless you want to live on £144 a week – which is what the state pension amounts to – we are all going to have to start putting money aside now.

So how much do we actually have to save to keep us in a state that we would like to become accustomed, rather than shivering in our vintage Uggs waiting for our non-existent meals on wheels?

According to The Daily Telegraph we will need to have created a pension pot of £270,000 in order to bring the state pension up to £16,400 a year, which is the amount the Joseph Roundtree Foundation calculate is necessary for a minimum standard of living. This would give us an annual income of £8,912 when you retire, enough to bring the new £144 a week state pension up to £16,400 a year. £270,000 is a terrifying amount of money to magic up. Or is it? Not if you start early. My trusty friends at Hargreaves and Lansdown have worked out that if you saved a fiver a day and invested it wisely you would end up, after 25 years, with a nest egg of £275,000 and all from an initial stake of £45,000. Find out more here.

Can’t be done? Think again – let me direct you to another slightly alarming financial fact. Guess how much we spend on make-up and beauty treatments during our lifetime? Go, on, take a stab at it. Give up? Ok, I’ll tell you. £38,400. Yep. That’s according to the people at online discount shopping site,, who spent an enjoyable time quizzing women about the contents of their handbags and bathroom cabinets to come up with that figure. And it’s not one of those freaky top-end surveys either. It doesn’t assume a weekly Botox habit or daily Crème de la Mer addiction, but is based on a not unreasonable sum of £85 invested in make-up and cosmetics that are replenished every four months, topped up with a monthly £25 beauty treatment. That’s about £690 a year, for say, 60 years of adult life, which, if redirected towards something less fluffy, easily gives us the fiver a day we need to ensure a prosperous, idle old age. I reckon if we chuck in the amount we throw away on “investment” handbags and “God what a day, I need cheering up” shoes we’ll have got ourselves a pension and still be able to afford the odd jar of Pond’s. After all, we don’t want to frighten the crew when we finally set sail on that Mediterranean cruise do we?

Let me know what you think. Write a comment below or Tweet me @AmandaAtCandis

Posted by Amanda Blinkhorn

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