Should We Really Be Saving for Retirement with *One* Pension Pot?

My official pension pot is abysmal.

Since I was young, people have always chimed on about how important pensions are. “You need to save for your retirement!” is a statement everyone told me—including those who hadn’t even reached retirement age.

I know you should start saving for retirement as soon as possible.

I know the smallest contributions add up.

I know the state pension in the UK probably won’t look the same by the time I reach retirement.

Yet I’m still not 100% sold on having all of my retirement money tied up in one pension pot. Here’s why.

My pension history

Before we dive in, it’s good to get a quick background check and see my pension history.

I started my first job at 17. Back then, pensions weren’t something every employer needed to offer, so I didn’t automatically get one. A few years later, a rule got introduced that workplaces should automatically enrol their staff in a pension scheme if they fit the criteria. But I still didn’t get one, because:

  • I was under the age of 22, which meant I had a choice whether to enrol (it wasn’t done automatically)
  • I’d already handed my notice in to quit the job

I left my job at 19 to start my own freelance writing business. Since I had no existing pension, I was naïve and didn’t think to set one up. My focus at that time was to actually make some money to live; nevermind saving a percentage to spend in 50 years.

A few nags from my parents later, and I set-up a SIPP (Self-Invested Personal Pension) with NEST. I added a few hundred pounds every month to that pension for about a year… Then nada.

Until a few months ago, I had a grand-old pension of £1,850.

should i have a pension

Why I don’t (think) I believe in pensions

Let me be clear: I don’t disagree with having a pension entirely. I just disagree with using that one pension fund as your single retirement pot.

I know some people who pay into their pension from their salary. That’s the only saving/investing they do. Sure, they have money tied up in their house, but that’s all. They need to wait until they reach retirement age to access that money.

⬆️ That’s what I’m not sold on.

I stopped putting money into that official pension pot for two reasons:

1. Living for now vs. saving for the retirement

I never want to feel like I’m working for nothing.

I experienced that second-hand with my younger brother, who’s the complete opposite to me when it comes to money. He got himself in a cycle of getting into debt, working to pay back the debt… and feeling like he wasn’t working for anything. He’d already spent the money before he’d earned it, giving it less value.

I worry that saving for retirement can feel like that.

Taking a decent percentage of my paycheck and shoving it into a pot scares me. It makes me think I’ll be working hard, only to see my money disappear.

(In reality, I know it doesn’t disappear. I just can’t access it for 40+ years, which makes it feel invisible.)

When it comes to saving, I think the key is balance. Don’t put so much pressure on saving money that you miss out on experiences.

Granted, those experiences cost money—especially when your experiences are traveling. But experiences teach us things. Sometimes, that’s a better return than investing money into an official savings account for you to use on a rainy day. Great experiences can change our lives, and make us better people.

I’m not sure about you, but I’d rather sleep comfortably knowing I’m a good person with a decent amount of savings, rather than an asshole with millions.

What I’m trying to say here is: I don’t want the money I’m earning today to be locked away. I want money to play around and have experiences with. Committing too much to a locked-in retirement fund, that can only be accessed on a specific date, probably wouldn’t let me do that.

My cash isn’t fluid with an official pension pot. But by saving and investing on my own terms, I’ve got control over that.

pensions for self employed

Alternative saving strategies (with no long-term commitment)

As of today, I have these savings pots that I pay into regularly:

  • Long-term investments in ETFs (using FreeTrade)
  • Personal savings (including an emergency fund, sinking funds, and rainy day spends)
  • Business savings
  • My pension

Yup, that’s right: I’m still not sold on the fact I want to have an official, locked-in pension pot. But I’ve started adding to my pension pot (again) until I decide.

I’ve got access to pots of cash that I can access immediately (personal savings), within the next decade (business savings), and further than that (investments and pension.)

The first three aren’t locked in. Should I need to sell my investments to cover my income if the worst happens, I can do that.

I can’t access money if/when I need it when it’s all locked into a pension pot.

My current retirement plan as a company director

My new pension is with PensionBee. I switched from NEST’s clunky interface to PensionBee. The latter is easier for me to manage, and much easier to see what your pension pot is worth.

I’m currently paying £250 towards my pension. That’s less than 2% of my business’ monthly turnover.

It’s not much, I know. But it’s better than nothing—especially whilst I get my head around whether a pension is something I want to continue with.

(Side note: I don’t pay into the pension pot from my personal money. It’s more cost effective for me to make contributions directly from my limited company. That way, I can get some tax relief at the end of the year, making the amount owed on my tax bill less.)

I have my pension pot—a lump-sum of money that I can access once I reach retirement age.

But I’ve also got other investments that I can choose when to use. I’ve got control over when I sell my investments, downsize my house, and take my business savings as dividend payments.

I don’t have that with a personal pension, hence why I’m so reluctant to use an official pension pot as my only source of retirement cash.

How are you saving for retirement?

The bottom line:

I don’t believe in tieing money into a single pension pot, but I’m continuing to invest in one to spread out my retirement cash.

My goal for retirement is to have several pots of money to rely on. That includes my home (once I pay off the mortgage), my business savings, ETF investments, and a small pension fund.

I’d love to hear your thoughts on this topic. Do you have a pension pot and no other savings? Or do you refuse to have a pension at all? Let me know ⬇️


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Hey! I'm Elise, the founder of My9to5Sucks.com. I started making money online back when I was 12 years old. Since then, I've started multiple online ventures to grow, save, and invest the money I make—including a 6-figure freelance writing business by the age of 21. This blog documents the no-BS ways I make/save/invest money and build a career.