‘I’ve never paid into a pension – and it was the best decision I ever made’

A private pension will pay you an income in retirement in addition to the state pension, reducing the need for financial support from the state. The Government offers incentives to save into a pension, including tax relief and obligatory employer contributions for those employed.

But retirement can feel like a long time away and some people do not pay into a private pension, perhaps because they cannot afford to or they think there are better ways to fund retirement.

Data from the Department for Work and Pensions (DWP) shows one in four people aged 40 to 75 do not have a private pension.

Victoria Borman, 44, runs her own business selling CBD products and has never paid into a pension. Her husband Jamie, 45, is a self-employed plasterer who also does not do so.

Mrs Borman believes property has been a better investment for the pair. The couple, who have three children, live in a semi-detached home in St Neots in Cambridgeshire and are on track to be mortgage free in five years. They also own a one-bedroom flat in the town centre that they let to short-term tenants through Airbnb. This is mortgage free and brings in around £900 a month.

“We bought our first home in our mid-20s, a two bedroom flat in St Albans, Hertfordshire. We sold it five years later in 2009, making a £50,000 profit. We then bought the four-bedroom we live in today in Cambridgeshire, which again has surged in value. We're in a comfortable position and have only got five years left on our mortgage,” says Mrs Borman.

“While we got on the property ladder young, many of our friends paid into pensions and left it later to buy a property.  I've got friends with mortgage terms that take them up to 65 or even 68 years old. Yes they are also paying into a pension, but are they ever going to actually spend it? No one knows what the future holds.

“I don’t trust a bank or a pension scheme to manage my money – I think I’m doing a good job already. Our Airbnb flat brings in £900 a month and we plan for this to be our retirement income, on top of the state pension. We may buy another property to let to tenants and boost our rental income further.  We’ll also downsize at some point once our children have left home, freeing up even more money.”

Chris Beesley, 69, and his wife Susan, 67, have worked for themselves for the past 30 years. With five children and the costs of running a business and home to juggle, they never got round to paying into a pension.

With their 50th birthdays on the horizon in the early 2000s, they began to think about retirement and decided to invest in property. They bought an investment property in the UK and by 2005 they had others in France, Spain and the US. The aim was for their properties to give them an income of £50,000 a year.

But when the financial crisis hit in 2008, they lost a lot of money on their properties and began to look at other ways of creating a retirement income.

The pair, from Surrey, now run a firm that helps over-50s start an online business. It pays them a comfortable income that allows them to travel and enjoy experiences. They both also get the full state pension and Chris gets an income of around £160 from a workplace pension he paid into in his 20s.

“I think today I would advise younger people to pay into a pension and also look at additional ways to invest their money for the future,” he says. “With pensions today, you have much more choice on how you take the money. It used to be the case that you could only buy an annuity, an insurance product that pays an income for life.

“But I don't think I would significantly change what we did because we're not reliant on anybody else for our income. We have total control over our money.  We work the hours we want, we live where we want and we can travel around the world and take our business with us. Yes of course we need the income. But we love what we do. We’ve built the business so that if or when we decide to stop, we should still have residual income coming in.”

Catherine Gladwyn, 46, from Wiltshire, was a single parent for 11 years and could not afford to pay into a pension. After being employed as a PA for many years, she now runs her own business helping people become virtual business assistants and earns a six-figure annual income.

The success of her business means Catherine could now afford to pay into a pension. But she has a life-limiting brain tumour that means she won’t get to retirement age and so does not see the point of paying into one.

She says: “I started making serious money when I went self-employed in 2016, which has allowed me to invest in two rental properties and pay off the mortgage on my own property.

“These rental properties were going to be my pension, but will now be my fall back if I need to put my partner on a sabbatical when things deteriorate with my health. I can sell them and we can use the equity for our living costs. This further proves to me that a pension is a waste of time – with property I have more control over when I can access the money. I've resigned myself to what's happening – we're all going the same way and I can't change my circumstances.”