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You say negative, I said conservative. Yes, I accept the point even if 'negative' is quite an emotive way of putting it. Maybe I am, I saw the quality of end of life care my Mum got under the state (complex medical, not just care) and it was shit; the coroner's pre-inquest into her death opens today. I have little faith in 20+ years time that the state will be able to provide very much.
Live for today, there might not be a tomorrow - accept completely your right to the opinion and if you're wired to accept that then great. I'm not. I try to enjoy today, but with a cautious eye on tomorrow.
The problem is if you include private care you could be looking at £1000 per week. That will blow up most peoples pensions if it's included in any projections.
TheOtherJohn does indeed have a very cautious outlook, you'll see that in spades on his various threads. But I think his input here is excellent. Any discussion needs two sides and I think he's put his viewpoint across very well.
I never said his input wasn't useful, I just said he's very negative ☺️
I never said you said it wasn't useful ,😆
etc
OtherJohn’s glass might tend to be half empty when others might judge it half full, but his words are not without merit.
The problem is if you include private care you could be looking at £1000 per week. That will blow up most peoples pensions if it's included in any projections.
Yes, if this is part of people's retirement strategy absolutely nobody will bother saving for retirement. Property will hopefully cover care costs for most of us.
Another angle to planning, has anybody looked into old schemes they might have been part of in their youth but never really noticed? I had a couple of jobs either side of joining the Navy that I can't remember if I was part of schemes or not. I've had probably the last 23 years at 2 companies and I'm on top of the those.
Anybody gone searching for older schemes? How did you find them?
Agree it’s good to see a variety of perspectives. When I posted up the other week to see how folks were getting on with early retirement at about 60 and pots more around the 500k than the £1M target often quoted that was exactly what I was looking for.
This thread remains extremely useful as I navigate the early months of my own early retirement with a pot around the number I asked about, so grateful for all the thoughts.
Worth checking this video out if you are thinking of an early exit but caught by the NMPA change to 57.
After watching it last night I found out my Aviva pension has the PPA clause which means I can draw from 55 👌
Not sure if I'll be in a position to do that but it's great to know it's an option. I was assuming I'd be fully caught by the NMPA change but it turns out I'm probably not
Thanks for highlighting - annoyingly I fall into that middle gap - Born May 1972 and planning to retire at 55!
I had presumed that as I was below 57 at the implementation date I would be ok (guess I might still be from the video) but I'm also going to contact pension providers to see if a PPA.
To make it even more annoying I know my employer is currently thinking of changing providers!
To make it even more annoying I know my employer is currently thinking of changing providers!
Yeah I saw that in one of the comments underneath the video. I guess it would only matter if the employer is somehow moving all previous funds to a new provider rather than just starting paying new funds into a different provider.
It's your pension after all, so I'm not really sure how they would have jurisdiction over moving the old pot which could affect your rights....but I'm guessing here really.
Back to care and care homes...much is made of this aspect of getting old but it really is worth bearing in mind that out of the 11 million over 65s....441k are in care homes. (It has decreased over time...I recall a solicitor telling my mother and I...when asked about putting her 'average uk house value' house in 'trust, that 5% go into care...so in 2006 my mother had a 95% chance of avoiding it....she actually spent 5 yrs in one)
^^^ on that point, when going through numbers and scenarios with my IFA, he suggested that the majority of very elderly folks that go into care last less than a year..
all very depressing nonetheless.
Thanks for highlighting - annoyingly I fall into that middle gap - Born May 1972 and planning to retire at 55!
I had presumed that as I was below 57 at the implementation date I would be ok (guess I might still be from the video) but I'm also going to contact pension providers to see if a PPA.
To make it even more annoying I know my employer is currently thinking of changing providers!
When my employer did that, our existing pension stayed as-is, and I started contributing to the new one.
At that point we had the option of either porting the existing pot to the new one or just leaving it 'dormant' (dunno what the right word is) as a seperate pot
Yeah I'm minded to ignore the flip out of potential care home costs and hope (and/or ensure) I go out with a bang rather than a whimper
^^^ on that point, when going through numbers and scenarios with my IFA, he suggested that the majority of very elderly folks that go into care last less than a year..
all very depressing nonetheless.
It does seem unfair, as in it really hits modest estates hard... estates of low value dont get hit, rightly, and estates worth millions can absorb or maybe even avoid some of the cost with financial planning..
but for those in between, a long spell in a care home can quickly decimate the estate.
When my employer did that, our existing pension stayed as-is, and I started contributing to the new one.
At that point we had the option of either porting the existing pot to the new one or just leaving it 'dormant' (dunno what the right word is) as a seperate pot
We just had our UK work pension scheme move provider. First, new contributions were into the new provider’s ‘lifestyle’ fund and then the whole pot from the previous provider’s was moved. The whole plan and each stage were concisely communicated.
New provider has a wider range of fund options including several ‘lifestyle’ choices defined by expected retirement year.
a much better platform, slightly lower platform fees, more fund/investment choice, seemingly similar otherwise.
on that point, when going through numbers and scenarios with my IFA, he suggested that the majority of very elderly folks that go into care last less than a year.
Mrs DB’s mother went into a care home with the proceeds of her house sale funding her care - she’s still there 5 years later and the £500k nearly gone.
on that point, when going through numbers and scenarios with my IFA, he suggested that the majority of very elderly folks that go into care last less than a year.
Mrs DB’s mother went into a care home with the proceeds of her house sale funding her care - she’s still there 5 years later and the £500k nearly gone.
Yep, mrs_oab's granny went onto care home and £350-400k was spent, even my gran in Scotland (where funding covers personal care) needed all sorts for 6 years in the dementia unit. I guess it's a cost of life and none of us should assume the state will pay....
My father (84) is of the view that somehow his children will pay for a care home..... It's going to be a shock to him shortly. 😞
Regarding lifestyle funds, just be mindful that the flipside of the fund share proportion moving towards safe “cash” as you near retirement, also means growth is likely to stagnate.
Care home costs are high, state funded care homes are paid at a lower rate than costs therefore are subject to corner cutting
Regarding lifestyle funds, just be mindful that the flipside of the fund share proportion moving towards safe “cash” as you near retirement, also means growth is likely to stagnate.
Said earlier on but with people having potential 20-30 year retirements, you don't need to move funds to 'safe' investments when you retire, you want it to continue to grow, as the market will do over that period.
What you do need is for a couple of years to be held in safe investments / 'cash' so if there is a market crash (and in 20-30 years there will be, at least one) you don't have to sell shares at rockbottom prices and can use the cash in the meantime.
Frankly there is no way to adequately prepare for potential care costs.
My uncle died last month - he was in a £1900 per week dementia home in Glasgow. There's no amount of saving that would realistically fund that for any length of time.
I don't have the exact stats to hand, but it is roughly 1 in 4 of us will require residential care, and with an average "stay" of 6 months. It's the territory that ought to be straightforward to price, and build a suitable insurance product for (and indeed the govt expected insurance companies to do so), but noone has brought anything to market. I expect the uncertainties around future costs are too great for a commercial player. So it is down to an unhealthy combination of self-funding, home equity, state funding and optimistic hope, for each of us.
Even partial care is hugely expensive. £20ph for a direct relationship with a carer. £35-£40 ph through a care agency.
£1,000 per week for a live in carer (plus "call out" costs).
Insurance for care home fees exists but no-one buys it, because they are in denial, or just don't want to pay for it. Until it's too late.
Logan's Run approach starting to look quite appealing now.
Not sure if this is the right place for this, or if I should start a new thread, but one of my old pension schemes is currently 'on the road to buyout' and has a surplus left over. The administrators want to return this to the company I worked for, whereas I can't see why any surplus shouldn't go back into the pot. I suspect I'm missing something here, but googling it has been as useful as googling things has become of late...
Not sure if this is the right place for this, or if I should start a new thread, but one of my old pension schemes is currently 'on the road to buyout' and has a surplus left over. The administrators want to return this to the company I worked for, whereas I can't see why any surplus shouldn't go back into the pot. I suspect I'm missing something here, but googling it has been as useful as googling things has become of late...
I take it its a Defined Benefit scheme not a Money Purchase? If so, buyout costs have reduced significantly over the past few years due to high gilt yields. The trustees of the scheme only need to purchase equivalent benefits so any surplus would be returned to the employer as thgis is their reserve for the pension liability and the buyout psses on that responsibility to the insurance provider.
There is no "pot" for you in a DB scheme. There is a promise to pay you an amount of income in retirement, based on salary and tenure.
If they are going down the buyout route, then typically an insurance company takes over the obligation to pay you in the future, and the company makes up any shortfall (or gets any surplus).
There is no difference to you and your future pension income, other than a transfer of credit risk from trustees (/sponsoring company) to the insurance company. In all cases, these are underwritten by the Pension Protection Fund.
Good question, which I'll need to find the answer to. It's unhelpfully called the 'Retirement Savings Fund 5:15' and the letter I've received says it's just under a billion , which made me (rightfully?) think it was an actual, existing, pot...
If that's the nominal value of your pot, or your bit of the pot, you are officially quids in! (It probably won't be, unfortunately for you)
🤣 🤣 🤣
I'm planning in care costs for last couple of years of life, basically £1k a week at current value. If I need more than that will be reliant on family/house etc. If don't need I'm sure my kids or tax man will be happy to have it.
Regarding lifestyle funds, just be mindful that the flipside of the fund share proportion moving towards safe “cash” as you near retirement, also means growth is likely to stagnate.
These lifestyle funds were brought in when most people chose an annuity but YOU may prefer to keep a higher percentage in growth assets as you near/enter retirement if you are going down the drawdown route as @theotherjohnv points out.
I like the way you included 'probably' just in case.
If misteralz has a billion pound pension pot that they're broadly unaware of I'll copy the collected works of stw out longhand
Expecting that misteralz is a DB scheme and the WHOLE pot is £1,000,000,000. If that's not the case misteralz perhaps you could spread your enormous wealth around STW rather than horde it like the Sméagol billionaires to be found elsewhere 🙂
A couple of links that turned up yesterday when I saw an invite to some pension awareness ( https://pensionawarenessday.com/ ) things. I expect they've been shared before.
https://www.retirementlivingstandards.org.uk/
https://www.gov.uk/check-state-pension
The 'retirement living standards' one was interesting. Values like these are cited by Which? and various pension providers in their blogs and stuff. This may be the source, from Loughborough University research?
Figure 4 in https://www.ons.gov.uk/peoplepopulationandcommunity/personalandhouseholdfinances/incomeandwealth/bulletins/householddisposableincomeandinequality/financialyearending2024 provides some perspective for the disposable income.
For those still working, this ONS calculator might offer some despair https://www.ons.gov.uk/economy/inflationandpriceindices/articles/areyourwageskeepingupwithinflation/2017-06-20
I kinda thought that the billion would be shared among the hundreds or thousands of folk in the scheme, yes. If I had that much money to share then I'd at least buy stw a working server or whatever.
I like the way you included 'probably' just in case.
Seemed sensible to do so, you know what it's like, there's always some smartarse who likes to challenge apparently defacto statements 🙄
I've just checked the value of the DB scheme I'm in, and it was £835m at the end of 2023, as per the annual statement dated Aug 24. Presumably itll be a little bit more when this year's statement comes out. I'm happy with the ~£22k that it's paying me
2 weeks since there was a new post in this thread!
it used to be so active. Perhaps you have all retired now?
Not an entirely frivolous thread resurrection. I met with my IFA today. Seems, as expected, my combined DC pension pots will be insufficient to support me in the kind of indulgent lifestyle I’d like. Well, not after age 81 or thereabouts. This was a very simple model with uniform income (increasing at 2%/year - a magically low rate of inflation!) and adding in full state pension at 67.
Seems that I’ll have to cut my cloth according to my future means. NP, that’s the way and was expected.
discussion with my SO showed they have a high aversion to risk and they suggested that I just buy an index-linked annuity. Can’t say that sounds like a bad idea given our 30+ year history of, advisor-supported, investment products has shown modest gains with occasional shocks (for example, 2008, 2022).
I did wonder about taking, say, 15% of my pot and shifting it to ‘low risk’ options then drawing down on that when needed to provide a flexible buffer while the remainder be used to buy an annuity. There are trade offs to be considered.
Before I break out R to do some modelling, can folks recommend any sites that might support some initial scenario testing with a bit more than either simple drawdown or somple annuity estimations? Wanting to look at the trade offs of pot growth/drawdown combined with different annuity values.
I’ll be looking back through the thread for other inspiration too but if folks have experience, notions, ideas, or opinions on risk averse approaches it’ll be interesting to hear them.
Not sure if this is the sort of thing you want?
https://james-shack.co.uk/retirement-tools
he has a YouTube about them too. https://m.youtube.com/watch?v=Ssi1U6aMCdU
I have used a few online planners, this one is good IMO