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How one relative’s pension plight taught me to save the hard way

The inspiration behind Monevator.com is a family member close to my heart. He retired a few years ago at 64 years of age.

He’d managed to retire a year early. He’d wanted out for a decade beforehand, but he couldn’t afford to leave.

If money was tight, why did he cut and run at 64, instead of sticking it out until 65? I’d love to say that at 64 he suddenly discovered his inner hippy, or better yet a winning lottery ticket down the back of the sofa.

Alas, he had been diagnosed with cancer. He realised that he didn’t want to spend another day working in a job he was sick of, to contribute to a pension he might never see.

I’m really proud of his decision, but could he have decided to do it earlier? Could he have retired at 60? Or 55? Or even 50?

Perhaps, but only really if he’d taken a different route to retirement – the sort of route explored on Monevator.com.

Most of my relative’s savings were in the company pension scheme – often a lucrative perk these days, but also a ball-and-chain, tying him to his job. He had little control over the money he’d squirreled away with the company over the years. And the government also imposes further restrictions on pensions in return for the tax relief they entitle you to.

Even when he retired, my relative was not able to get full control over his life. He couldn’t buy the seaside cottage he wants – the housing market ran away from him in the final years while he was paying extra into his pension. He couldn’t invest freely with his pension money – he had to buy an annuity. He thus can’t even get at most of his money – which he spent 35 years working for and saving, remember – despite the question mark over whether he’ll live long enough to spend it.

My relative played the game fair and square, but it sometimes seems the rules were set against him. I believe the only way to ensure a winning result is to make sure you’re not just playing well, but to make sure you’re in the right game – one where you can make up your own rules, and determine where possible when the final whistle blows. That’s the philosophy behind this website.