A reader is not currently setting money aside for later life, and wonders what they need to do to get their plans on track

In our Pensions Crisis Coach series, we aim to help ease your retirement worries. Are you concerned you’re not saving enough for your later years, or don’t know how to find your lost pensions? Email us at money@theipaper.com. We’ll seek to get you on the right track with help from some of the best financial experts and advisers in the business.

Kate writes: I recently left employment to be a full-time writer and I am currently not saving anything into a pension. I have no idea how to find my old pensions from previous jobs at Norwich Union, a university and my local council.

I am just hoping for the best when it comes to retirement – that I’ll be rich and won’t need it – but as an author that’s unlikely.

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I’d like to have something of a pension makeover. I’m currently making around £56,000 a year – pre-tax – from my work.

It’s just me at the moment and I have a 14-year-old daughter.

I don’t really know how much I need to retire on, or what I would like to retire on, what should I do?

Callum, The i Paper’s Deputy Money Editor, responds: After your initial email, we had a back and forth exchange where we discussed how to track down your old pensions.

We both went about contacting your old employers to track them down, and we found that sadly, the pensions you thought you had from Norwich Union – now Aviva – and the university, actually did not exist.

You worked for Norwich Union for just under two years, and Aviva’s team told me the scheme rules it ran at the time stated that if you left employment before completing two full years you were not entitled to a pension, and so you had your contributions returned to you.

A similar situation occured when you worked at a university.

However, there was better news when we contacted the council you worked at. The council offered what’s known as a defined benefit (DB) pension scheme, like other public sector employers.

These are often referred to as ‘gold plated’, and this is why: most pension schemes rely on you building up a retirement pot via contributions, which are invested. Defined benefit pensions pay out a set amount every year in your retirement, no matter how long you live.

The annual payment also rises each year along with inflation regardless of investment performance.

Your pension entitles you to a payment of £3,500 a year in retirement, and that figure will rise as prices do. If prices double by the time you get to retire, you will get £7,000 a year.

With that understood, we turn to what you should be doing going forwards. You mention having turnover last year of £56,000, and that you hope to repeat this, this year. This is slightly higher than your income of course, as your income as a writer will comprise of your turnover minus your allowable business expenses.

So how much do you need to save? Figures from the pensions industry suggest a person needs around £31,700 a year – in today’s money – in retirement to enjoy a moderate standard of living. This is just a ballpark figure and won’t necessarily apply to you, but it’s worth having as a reference point.

You already have a guaranteed £3,500 of income and you are on track to get the full state pension if you continue working and paying national insurance (NI). You need 35 years of contributions or credits to get the full state pension, which current sits at just under £12,000 a year.

I spoke to Eamonn Prendergast, a chartered financial planner at Palantir Financial Planning, about what options you should be looking at for retirement.

He said that assuming you receive the full state pension and your £3,500-a-year university DB pension, you may need to generate around £16,000 of annual income from other sources to achieve a moderate retirement.

According to Eamonn, that typically means building a retirement pot of around £400,000 to £500,000.

Eamonn says that a self-invested personal pension (SIPP) is “almost certainly a good vehicle” for someone who is self-employed, as you won’t have access to a workplace pension.

To reach that £400,000–£500,000 target, he says you might need to contribute around £10,000 to £15,000 per year, depending on investment returns and how long you plan to work. However, if that’s not affordable, even £300–£500 a month is massively better than nothing, and if your income is irregular, you can make ad-hoc lump-sum contributions in good freelance years.

He also notes that pension contributions benefit from tax relief, which boosts the amount going into your SIPP.

In terms of investing, Eamonn explains that while most SIPP providers offer ready-made multi-asset portfolios, you will still need to choose which fund or portfolio to invest in  and for many people, that can be confusing.

Costs, risk levels, performance charts and financial jargon can all feel like a minefield if you’re doing it alone. If you would prefer advice, an independent financial adviser can help you select suitable investments, keep your pension on track, and advise on wider areas of your finances, not just the pension itself.

Eamonn also makes the point that before starting pension contributions, it’s important to do a financial sense check looking at your outgoings, debts, emergency fund, and overall financial stability and pension money will be locked away to age 57 from April 2028.

As a final note, please remember this is not intended to constitute personal financial advice. The commentary above is based only on the details provided and should be treated as general guidance. For tailored recommendations, you would need to consult a regulated financial adviser and provide a full overview of your financial situation.

I hope it helps, and best of luck with your retirement saving journey.