Published On: Tue, Jan 3rd, 2023

Cost of living: Mum fears her retirement age will increase by 20 years | Personal Finance | Finance


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A concerned businesswoman and mum believes she will have to work nearly 30 years longer than hoped because of Britain’s financial troubles and a lack of education around pensions.

Self-employed Madeleine Cole, 35, fears she could become “quite a poor old lady” as her mortgage repayments have doubled and living costs, including fees for the private education of her children, have skyrocketed.

Covid had already hit one of her businesses and the anticipated recession is expected to slash their value ahead of potential sales.

The issues mean she is no longer able to plough as much cash into her pension as she had hoped.

Her concerns come as a new  report highlights inequalities experienced by many during their working lives.

Those most vulnerable to being underpensioned, the research shows, include single mothers, carers, people with disabilities, ethnic minorities and self-employed people. Madeleine, who runs an advertising business and a firm in exhibitions, falls into the latter group.

She had hoped to retire early at around 40 but says it is now looking likely that she will have to carry on working through to her late 60s. The entrepreneur has made pension contributions on and off over the years, having had three children, and says a lack of education around pensions for young people has hindered her and others in the UK. 

Speaking last night to Express.co.uk, Madeleine, who lives near Horsham, West Sussex, said: “The recession may impact the value of my businesses when it comes to sell these, particularly the one in events, which was impacted by the pandemic anyway of course. We can’t even retire without selling these because we won’t get enough in pensions.

“It’s (Madeleine’s plans) ambitious but I am ambitious. Life is a treadmill.”

Madeleine Cole

Madeleine Cole has shared her concern about the pensions system (Image: Supplied)

It was only until recently I discovered actually I run quite a high risk of becoming quite a poor old lady at some point.
It’s made really think and now I want to try to catch up on my pension but, with the cost of living crisis, things changed.

Madeleine Cole

The mum continued: “I think any woman that has had a baby is in a vulnerable position when it comes to a pension. 

“I also think, in all honesty, that any woman that has entered the workforce, men to a degree, but women in particular, has a lack of education about what pensions really are and, actually, the time to put aside for your pension is when you have financial independence with relatively decent income and relatively few outgoings. 

“I missed that stage in my life because I wasn’t really aware of what a pension is for or what the importance of it was. I have since had three children so I have had three gaps in my career, where I have put less into a pension because I have had less coming in.

“I am probably a bit of an anomaly because I am a small business owner and my plan is to sell a business for a decent amount of money, and then use that as my retirement fund or invest that into property or change what I’m doing.

“I had always hoped to retire quite early but actually if I look, and I don’t sell a business, I’m going to be working until I’m in my late 60s. I have done the sums to find out what I’d need in order to retire, and I’d have to sell a business for into the millions.

“I wanted to retire at 40. It is all very much dependent on projects we have happening at the moment but, if we aren’t able to sell, then I am going to be looking at late 60s.  I think the days of selling a business for a couple of million and then being able to retire are long gone. For me, it is 50/50 really because one business is in exhibitions and that all depends on the situation, like pandemics and so on.

“It was only until recently I discovered that, actually, I run quite a high risk of becoming quite a poor old lady. It’s made me really think and now I want to try to catch up on my pension but with the cost of living crisis things changed. Our mortgage has doubled for instance. I had hoped to have paid that off by 40 or so.”

The NOW: Pensions report shows Brits are now sacrificing future savings in exchange for being able to survive their day-to-day lives amid the cost of living crisis.

The study shows the private pension incomes of single mothers, carers, people with disabilities, ethnic minorities and the self- employed remain below three-quarters of those saved by the average population, and some groups have experienced significant decline over the past two years.

Mel Stride, Work and Pensions Secretary

Mel Stride, Work and Pensions Secretary, recently hinted the state pension age may be increased (Image: Getty)

Madeleine says her situation has worsened because she and her husband’s mortgage has recently doubled, something she said she “cannot stomach”.

“We did consider downsizing when the mortgage doubled. We are still exploring all of our options,” the mum said.

Madeleine said she also had to juggle the care of her three children during their pre-school years while trying to manage her businesses. She argues if childcare was cheaper or free, as is the case to some families, she’d have been able to work more and earn more money.

Families are offered 30 hours of free childcare a week to kids aged three and four – but only if eligibility requirements are met, including how much they earn.

However, Madeleine feels this doesn’t help small business owners and argues all children should get free childcare hours from the age of one.

Childcare costs have been increasing above the rate of inflation for several years.

Madeleine said: “Places at nurseries are only available for free only if you earn under a certain amount of money.

“I think these places should be available to all, and it should start for free from the age of one. It would give more opportunities, particularly to women.

“If women are going to take the hit and they are going to come out of the workplace, I think men should be expected to siphon some of their pension while women are not able to work.

“We need to normalise men taking time off as much as women taking time off too, so shared parental leave is important.

“The government statutory paternity leave is two weeks, which isn’t proportionate.”

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Mel Stride, Work and Pensions Secretary, hinted last month that the state pension age could be increased due to the “pretty hairy” state of the public finances.

Lauren Wilkinson, lead researcher at the Pensions Policy Institute: “Private pension incomes of underpensioned groups remain below three-quarters of average population private pension incomes, with some groups experiencing significant declines compared to the 2020 Index. When income from state pension and benefits are taken into account, the underpensioned gap is smaller but still significant.

“The current economic climate could exacerbate the underpensioned gap, making it more challenging to implement further policies to narrow the gap in the short term, but it is important that the underpensioned challenge is approached with a long-term view.”

Samantha Gould, head of campaigns at NOW: Pensions and report author, said: “There are a total of 8.6 million people in underpensioned groups that are locked out of automatic enrolment, missing out on potentially billions of pounds of pension saving annually. We have been campaigning on behalf of underpensioned groups since 2019. Our latest report has revealed that private pension incomes were less than 85 per cent of the population average, with some groups experiencing significant declines compared to our 2020 index.

“Whilst the current economic environment means that it is challenging for the government to implement potential remedies, doing nothing is not an option. Action is needed now to reduce the pensions gap and allow everyone to enjoy the comfortable retirement they deserve.”

A Government spokesperson said: “Automatic enrolment has succeeded in transforming pension saving, with more than 10.7 million workers enrolled into a workplace pension to date and an additional £33 billion saved in real terms in 2021 compared to 2012. Automatic enrolment was designed specifically to help women and other groups such as young people, and lower earners. who historically have been poorly or less well served by the pensions market.

“The Government’s ambition for the future of automatic enrolment will enable people to save more and to start saving earlier by abolishing the Lower Earnings Limit for contributions and reducing the age for being automatically enrolled to 18 in the mid-2020s. We want to make sure that these changes are made in a way and at a time that is affordable, balancing the needs of savers, employers and taxpayers.

“Improving the cost, choice and availability of high-quality childcare for working parents is important for this Government and we have spent more than £20 billion over the past five years to support families with the cost of childcare.”

In relation to the calls for longer and better-paid state paternity, a Government spokesperson said:

“We remain committed to ensuring parental leave is fair and works for parents, including making it easier for fathers to take paternity leave.

“On top of this, improving the cost, choice and availability of high-quality childcare for working parents is important for this Government and we have spent more than £20 billion over the past five years to support families with the cost of childcare.”



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