Forum menu
Around one in 10 people in our survey told us they felt they stopped work too early, while half as many said they felt they had retired too late.
from a recent Which? Email link. https://www.which.co.uk/news/article/the-4-biggest-retirement-regrets-and-how-to-avoid-them-anzZo3A5gAWa
seems like the sort of ratio you might expect. Fewer people regret retiring ‘early’ than ‘late’.
Around one in 10 people in our survey told us they felt they stopped work too early, while half as many said they felt they had retired too late.
from a recent Which? Email link. https://www.which.co.uk/news/article/the-4-biggest-retirement-regrets-and-how-to-avoid-them-anzZo3A5gAWa
seems like the sort of ratio you might expect. Fewer people regret retiring ‘early’ than ‘late’.
I think you've got your maths wrong 10% say they retired too early, 5% say they retired too late is what I get from that statement.
I've been crunching numbers all morning, I could be confused 😂
think you've got your maths wrong 10% say they retired too early, 5% say they retired too late is what I get from that statement.
You are right.
My lazy reading of ‘1 in 10’ and then ‘half’. 10% and 5% as you say. Which surprises me. I suppose folks generally like the feelings they get from work?
If i retired now i could possibly be 40 years retired - my dad (now 98) and his dad same lived similar. And still healthy and mobile.
I see the government bean counters are thinking of dropping NI by 2% and increasing the basic rate of income tax by 2%. For workers it will make very little difference but will obviously hit pensioners.
I see the government bean counters are thinking of dropping NI by 2% and increasing the basic rate of income tax by 2%. For workers it will make very little difference but will obviously hit pensioners.
The Labour government really don't seem to like old people (read - people who won't vote for them anyway/*cynic), do they?
That Which link reads like something from DailyMash....
Anthea Bain, 77, from Ely, admits that she never really thought about saving for retire
ment when she was working, describing this as the 'biggest single regret of my later life'.
Anthea retired in 2018 and realised, to her ‘horror’, that she had only two small occupational pensions and one annuity. She cashed in the two small pensions and says she now lives on her state pension and an ‘annoyingly meagre annuity’, which 'pays me a couple of coffees a month
The Labour government really don't seem to like old people (read - people who won't vote for them anyway/*cynic), do they?
If that were the case they'd have stopped the old age pension triple lock. It's gone way beyond it's original purpose of bringing pensioners income up to a realistic level, but for the past decade or more successive governments have been too shit scared of loosing the coffin dodger vote to rein it in.
That would make a massive difference to future budgets.
State pensions in the UK are pathetically low compared to most european countries
State pensions in the UK are pathetically low compared to most european countries
Perhaps, but so are wages, job prospects, job security, housing security etc. Why not do something about them as priority.
State pensions in the UK are pathetically low compared to most european countries
It's kind of a catch 22 situation, some group of people are going to have to be taxed more, and it's quite predictably going to go down like a lead baloon whichever demographic gets hit.
If the tripple lock is kneecapped...people who rely soley on state pension are going to suffer, and if paying NI is less attractive to self employed people they will probably find ways to dodge it and invest inn SIPPs and things instead, that will result in the goverment getting less of a tax take to pay state pensions going forward, etc. etc.
It's one of those things that, the more you look at it, the more complicated it gets.
The real solution is to tax multinationals and super rich individuals a lot more effectivley and heavily... there's so much money being hoarded and effectivley removed from the economy in general, that could fix poverty and pretty much all social issues and with change to spare.
When I say rich individuals, I'm not talking about the working middle class who can afford hollidays and a 5 bedroom house... I'm talking about people who are sat on multi-millions and billions... I mean, if an individual has, I dunno, 50 million quid, what are they reaslisticaly going to do with all that money? other than buy more assets and push the price of those assets up for everyone else.
I see the government bean counters are thinking of dropping NI by 2% and increasing the basic rate of income tax by 2%. For workers it will make very little difference but will obviously hit pensioners.
Why should a pensioner pay less tax on the same amount of income than a worker?
f that were the case they'd have stopped the old age pension triple lock. It's gone way beyond it's original purpose of bringing pensioners income up to a realistic level, but for the past decade or more successive governments have been too shit scared of loosing the coffin dodger vote to rein it in.
That would make a massive difference to future budgets.
So would getting rid of the higher rate of tax relief on pension contributions. I benefit from it myself, but it's pretty unjustifiable.
Another one here who thinks that they need to make some strong decisions - drop the higher level of pension relief, I would scrap NI and replace with a much more progressive and hiked income tax, replace triple lock, look to close as many legal dodges like paying dividends, remove many VAT exemptions, simplify a lot of our tax systems etc.
I see the government bean counters are thinking of dropping NI by 2% and increasing the basic rate of income tax by 2%. For workers it will make very little difference but will obviously hit pensioners.
Why should a pensioner pay less tax on the same amount of income than a worker?
f that were the case they'd have stopped the old age pension triple lock. It's gone way beyond it's original purpose of bringing pensioners income up to a realistic level, but for the past decade or more successive governments have been too shit scared of loosing the coffin dodger vote to rein it in.
That would make a massive difference to future budgets.
So would getting rid of the higher rate of tax relief on pension contributions. I benefit from it myself, but it's pretty unjustifiable.
And none of that matters - we're fighting amongst ourselves over the table scraps, pretty much. The real money, economy and society transforming money, is sat with oligarchs and multinationals.
Matufezz is right. We're completely missing the point taking about income tax. It's wealth that should be taxed
I don't disagree, but unfortunately people tend to think that they are already taxed a bit too much, and it's other people's income/wealth that should be taxed more, so it's difficult to implement bold moves as it will inevitably be a political shitstorm (see the Triple Lock)
I need to start thinking about pensions - i'm 47. I have a defined benefits local government pension (worked at a uni) that is currently valued at £11.5k per annum with a lump sum of £8.7k. I understand i can change that lump sum and reduce the yearly pension.
i then have private pension that is very low contributions of 3% and not entirely sure what it's worth
I need to start thinking about pensions - i'm 47
You do. Using the old rule of thumb (i.e. half your age as a percentage), ideally you're looking at saving about 25% of your income. That would include any employer's contributions.
I understand i can change that lump sum and reduce the yearly pension.
You can, but on those numbers you'd be mad to. A defined benefits pension is a very valuable thing, as the income is guaranteed, and will rise with inflation each year. To be honest, for the sake of £8k, I'd be looking to reduce the lump sum and increase the income.
And completely OT - did you stay at a campsite near Builth Wells in July? FForest Fields/Farm, something like that. We were there and having a beer one evening when I saw someone from a distance and thought "I'm sure that's Gav".
The triple lock was a necessary step to help the state pension back up toward where it had been in relative terms. If you view the state pension as a sort of safety net, then you can’t help but feel something has gone wrong with spending and taxation when we’re on the verge of having to start taxing the basic state pension.
I need to start thinking about pensions - i'm 47. I have a defined benefits local government pension (worked at a uni) that is currently valued at £11.5k per annum with a lump sum of £8.7k. I understand i can change that lump sum and reduce the yearly pension.
i then have private pension that is very low contributions of 3% and not entirely sure what it's worth
You've got a great base with a DB and assume full state by that point and don't forget your partner if there is one and what they have as it's a team effort especially if one is much lower funded due to childcare etc.
I would start reading/watching/listening to stuff to learn more about it.
Meaningful Money podcast/youtube/book has very good info and a step by step on what to look at and understand/do
James Shack youtube is very good.
After you have more knowledge work out what you want by when and see if you can realistically achieve that. This can lead to death by spreadsheet but it's a useful way of making sense of it.
The triple lock was a necessary step to help the state pension back up toward where it had been in relative terms.perhaps but its an absolutely stupid idea. Any government who wants to break it faces being accused of targeting vulnerable old people. Eventually, it will happen - and then the next generation will have paid for it for their forebears and lost the upside for themselves!
Or it is a sign that we live in one of the richest countries in the world, where the elderly are quite well looked after and accordingly have to pay Tax! It's always struck me as odd that pensioners don't pay NI. I actually think it would be better if everyone was paying Tax and NI on their income, even if that meant boosting some benefits to offset it - psychologically it would be better for people to be seen as contributors rather than just drains.If you view the state pension as a sort of safety net, then you can’t help but feel something has gone wrong with spending and taxation when we’re on the verge of having to start taxing the basic state pension.
Our pensioners are NOT well looked after. The state pension is pathetically low.
You can, but on those numbers you'd be mad to. A defined benefits pension is a very valuable thing, as the income is guaranteed, and will rise with inflation each year. To be honest, for the sake of £8k, I'd be looking to reduce the lump sum and increase the income.
And completely OT - did you stay at a campsite near Builth Wells in July? FForest Fields/Farm, something like that. We were there and having a beer one evening when I saw someone from a distance and thought "I'm sure that's Gav".
\
Bloody hell! it was. You should have come over and said hi 🙂 shame i didn't spot you.
great campsite.
I need to start thinking about pensions - i'm 47
You do. Using the old rule of thumb (i.e. half your age as a percentage), ideally you're looking at saving about 25% of your income. That would include any employer's contributions.
I understand i can change that lump sum and reduce the yearly pension.
You can, but on those numbers you'd be mad to. A defined benefits pension is a very valuable thing, as the income is guaranteed, and will rise with inflation each year. To be honest, for the sake of £8k, I'd be looking to reduce the lump sum and increase the income.
And completely OT - did you stay at a campsite near Builth Wells in July? FForest Fields/Farm, something like that. We were there and having a beer one evening when I saw someone from a distance and thought "I'm sure that's Gav".
Why is that then? the lump sum is tax free. obv not sure how long i'll live but there's a sliding scale you can use on the site which tells you how much you can currently pull and how much it reduces the yearly annual pension
is it not worth it then?
Our pensioners are NOT well looked after. The state pension is pathetically low.
A common grumble, often with people pointing to other countries with better state pension. BUT comparing pensions between countries is difficult, because cost of living is different in different places, employer pension provision is different, etc.
Most other countries don't have "flat rate" pensions - they link to your previous earnings, is that fairer? It certainly skews the numbers and makes it seem like their "average" pensioner is better off - but the equivalent employee in the UK probably has some form of earnings related income which is not shown in "our" numbers.
Only the UK has a triple lock, most other countries have a single index link.
You need 35 qualifying years for the full UK pension with generous arrangements for parents of children (typically mothers). In France or Germany that is 42 or 45 yrs respectively.
You can't just look at the payout - countries which pay more usually equate to employers and employees have also usually contributed more over the years. A UK pensioner who wishes they had been "taxed" more to get a better pension has had the option to make personal pension contributions (usually with good tax incentives to do it).
If you compare pension to previous earnings for "average workers" it gives a better indication of state support - and we actually do OK on that metric, roughly comparable to Iceland (that largest payer in simple Euro value), Norway, and Germany (if you only consider the mandatory scheme in Germany).
Occupational pensions are virtually unheard of in some countries.
I don't have a huge amount of sympathy for UK pensioners who complain our pensions are lower than other countries, what they could expect wasn't a big secret, they have the option to make additional provision. Indeed many of them benefited from the mobility to change country if they wanted to seek out the best deal. I have much more sympathy for people who started working with one expectation and then are told their start date has moved.
Yeah state pension is not great if you end up at retirement age and stuck in a rental house rather than owning.
£230 per week doesn't go far when you've got rent and utilities and food to buy.
Sure there are council tax reliefs and whatnot but still... It's not pretty.
And it's going to effect millions of people caught in the rental poverty trap. Probably paying a minimum contribution works pension and are happily oblivious to the fact that it's probably no where near enough to put the heating on, cover the rental and put food on the table
I understand i can change that lump sum and reduce the yearly pension.
You can, but on those numbers you'd be mad to. A defined benefits pension is a very valuable thing, as the income is guaranteed, and will rise with inflation each year. To be honest, for the sake of £8k, I'd be looking to reduce the lump sum and increase the income.
Why is that then? the lump sum is tax free. obv not sure how long i'll live but there's a sliding scale you can use on the site which tells you how much you can currently pull and how much it reduces the yearly annual pension
is it not worth it then?
I suspect the lump sum/increased annual payment is neutral - it will likely be the equivalent of an annuity. So it will depend on how long you live whether you're better off or not (but 'on average' it will make no difference.
Also, 'rise by inflation each year' isn't necessarily as great as it sounds. The defined benefit pension I built up is capped at 4% inflation increases. That was fine for many years but rpi was above 4% from August 21 to April 24 and there was a 12 month period where it was above 10% so that little 'gold plated' pension I have doesn't look so shiny anymore.
Also, 'rise by inflation each year' isn't necessarily as great as it sounds. The defined benefit pension I built up is capped at 4% inflation increases. That was fine for many years but rpi was above 4% from August 21 to April 24 and there was a 12 month period where it was above 10% so that little 'gold plated' pension I have doesn't look so shiny anymore.
That is unfortunate. Still, better in some ways than folks in many jobs whose income has generally lost buying power year on year as wages have been pretty stagnant in the UK for a while.
But I suppose as a pensioner, rather than a ‘retiree’ who keep working, there isn’t the same opportunity to get a different job that might pay more while requiring the same experience as the current one.
Also, 'rise by inflation each year' isn't necessarily as great as it sounds. The defined benefit pension I built up is capped at 4% inflation increases. That was fine for many years but rpi was above 4% from August 21 to April 24 and there was a 12 month period where it was above 10% so that little 'gold plated' pension I have doesn't look so shiny anymore.
interesting. Would love to know if mine will be capped
I found this table
https://www.avonpensionfund.org.uk/receiving-pension/pensions-increasehttps://www.avonpensionfund.org.uk/thinking-joining/your-local-government-pension
but that doesn't tell me if it is capped now or will be capped in the future - how much can they change the conditions of the pension?
I suspect the lump sum/increased annual payment is neutral
Not quite for me. Taking the largest lump sum and the smallest pension or the smallest lump and the largest pension. the former was better if I lived less than 17 years, the latter better if I lived more than 17 years
Yeah, as TJ says, it's simple maths to figure out the point where the equation flips. Do the math then figure out when you are planning to die then proceed with whichever option is best.
Though, if you're a gambler, you could always take the largest lump sum and throw it into a Stocks and Shares ISA* if you don't actually need the funds at that time
* Or put it on your favourite geegee at the 2:30 at Kempton (IANAFA)
I struggle with this mainly due to my dad retiring, getting incurable cancer and leaving this world at 63. I er on the side of getting a load out of muy pension as a lump sum but probably not as responible long term. Its also tricky as my wife retrained as a gardner last year and is not contributing to a pension. I guess we;d downside once the kids have left (not sure when that will be in todays financial climate!)
I struggle with this mainly due to my dad retiring, getting incurable cancer and leaving this world at 63. I er on the side of getting a load out of muy pension as a lump sum but probably not as responible long term. Its also tricky as my wife retrained as a gardner last year and is not contributing to a pension. I guess we;d downside once the kids have left (not sure when that will be in todays financial climate!)
It's a tough one isn't it... I don't want to drop dead with a gazillion pounds in the bank having been frugal for 20 years... but i don't want to end up on the streets either.
Worst case i could downsize/sell house and that gives a decent chunk if needed.
Funniest part is, i'm worth a LOT more dead than i am to my wife while alive 😀
Funniest part is, i'm worth a LOT more dead than i am to my wife while alive 😀
Tell me about it. I have to be careful going down the stairs and the likes with my wife behinds me.. . If I can make it to retirement, when I lose my death in service benefits I think I can trust her again.
I have to be careful going down the stairs and the likes with my wife behinds me
No, it's the book hidden under the carpet on one of the steps, to create an odd height step that you aren't used to, lose your balance and fall. It can then be removed so it looks like an accident.
Recent events tell me not to work beyond early 60's. My younger sister, daughter's boyfriend's mum, and a colleague at work have just been diagnosed with breast cancer. Another fella has had a heart attack, and one had a stroke on the commute home on the train.
My sister is on a six figure salary and works all hours. It's time she packed it in. Her hubby earns well too, they have never had a mortgage (inherited house), can afford to pay 'cash' for a £50k extension. I'll be recommending she re-thinks her goals as they both don't spend much, have 2 cars, a few years old (plus 5 yrs) and don't go on lavish holidays. They have the baby (a dog) and no kids. I'll tell her to enjoy herself more, max out the sick leave and think about reduced workload, or pack it in, and send hubby to work (he wants to retire and play golf - both early 50's).
Stuff like thinking about 'you' is more important. 6-7 years more for me (assuming I don't break myself more) and I'll seriously be looking at retirement in my early 60s. We won't have loads of money, but could pay the leccy bill and camping isn't expensive !
Work isn't that important, unless you are struggling money wise.
Yeah as above, my dad worked very hard all his life. Retired early 60s dead at 69. The lovely DB scheme he had at work didn't seem really so very good cast in that light.
The only other factor really is that if you have a DC pension it can be passed on to your spouse and kids. So personally I'm chucking money into it to pass on, as much as I am to retire on.
And yes I know about the change to iht rules
We are retired at 60 with a combined 4k per month income. Helpful tools for us are Snoop for managing spending. Rebel Finance School and Meaningful Money for optimising investments. Avoid tax, fees and financial advisors.
I suspect the lump sum/increased annual payment is neutral
Not quite for me. Taking the largest lump sum and the smallest pension or the smallest lump and the largest pension. the former was better if I lived less than 17 years, the latter better if I lived more than 17 years
it’s neutral based on the actuaries calculation of a retirees likely lifespan. As post below, it depends on when you intend to die, though that’s not something completely under our own control.
im almost certainly going to draw my final salary pension at 55. There’s a fair bit of reduction on the annual payment but my simple calculation was that I’d be 82 before it tipped over.
We are retired at 60 with a combined 4k per month income. Helpful tools for us are Snoop for managing spending. Rebel Finance School and Meaningful Money for optimising investments. Avoid tax, fees and financial advisors.
These are the real world experiences I like reading about here, as much more reflective of typical situations I think. A few folks chipped in a couple of months and quite a few pages ago with great and similar stories.
I finished full time work aged 59.5 in July there.
I will hopefully not need to access my drawdown pension for another 12-15 months, maybe a little longer depending what pans out on part time work, though only hoping to do a day a week max of quite well paid consultancy type work. Our house is fully paid, as are the cars, and my wife will continue working part time for at least another 5 yrs probably, until she is 60.
We are reckoning on a combined net monthly income from cash and pension drawdown, a bit of tax free income from a bit of work, plus wife’s tax efficient part time salary, of around 5k, which will be more than enough I reckon.
im not missing the stress of work one little bit so far.
Do the calculations include tax? took the max lump sum on the basis that I intended to work part time afterwards. Had I taken max pension I would have been hitting the Scottish higher tax band while working part time.
Meanwhile the investment gains on my lump sum in ISAs were tax free.
The other big factor in my decision was that had I popped my clogs shortly after taking the pension Mrs Irc would be better with a smaller pension and a lump sum based on the full pension.
Our 4k a month is after tax. A combination of cash savings, ISA, Premium Bonds, SIPPs and DB pension to create most tax efficient portfolio. Is simple to do but appreciate that not all are able to do.
My figure is also net, my pension is a privately managed SIPP and when I do start to drawdown it will use the uncrystallized approach to be tax efficient. Having paid high rate tax for quite a while one of my goals now is to pay as little as is allowed, from next tax year. As with others, mix of pension, cash, ISA, etc.