[Closed] Pensions - how screwed are you?

I'll need c£1m pot to get an income of £25k

[quote=DezB ]I was made redundant after 33 years of contributions, so can't see if that means I'll get a bit of it or sod all. They don't make it simple.
You'll get almost the full amount but you can also top it up

I think Wiltshire farm foods are pursuing a more aggressive pricing strategy, so possibly, yes

No pension here, I've always eyed pension companies with suspicion, I just don't trust them with my cash!
However, we do have a plan to have 4 or 5 rental flats all paid off for our retirement 'pension'.
It's going well, we are on track.

Holy crap. I've just read that as a rule of thumb if you've not been contributing to a pension then you should divide your age by half and put away that as a percentage of your salary until you retire. That makes my monthly contribution about £400 for the next 30 odd years. And I've got a kid on the way. And I don't own a house yet. 😥

Anyone want to buy a bike? I can't afford to run it anymore!

I'm 40 , and pretty much screwed.

Always had work ones, but at this point that doesn't add up to a huge amount. OTOH I've got a short life expectancy.

TBH it's one of the likely terminal crises for feudal capitalism, this. Pretty soon we'll have an entire generation working to pay for people 2 generations ahead to retire comfortably, while watching their own retirement age increase and pensions collapse, not to mention working benefits- and simultaneously telling their kids that they have to pay for things they never had to, and will likely never be able to afford their own house, or repay their £50000 (and spiralling) of student debt, or receive any number of other things that were taken for granted (and which were inexplicably affordable in the ruins of a world war, but not in the greatest time of plenty in human history)

Very optimistic about my future...

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Not being funny, but will you need an income of £25k? (assuming mortgage planning has that paid off)

Jeremy Corbyn (or any long serving MP) has a final salary pot worth £1.6m for his pension of £50k pa.

Personally not in as good shape as I was due to divorce, I had always saved ontop of company contributions. Given a big part of my job is managing money for pension plans you could say I practice what I preach. Truth is our and future generations will not be as wealthy as our parents and the Golden age of final salary schemes

Got one pension with about 29k in it(from another work, plus when i didn't have a pension for a good few year i contracted out, so I got about 5 year of those, thought i might aswell pocket those as i'll manage the 35 year requiremet, my wages where terrible for that pension so i wasn't contributing much) and i've another that just started with the work last year, with the government requirement. paying 1% and 3% in to that. the works cotribution due to go up to 4% i think, my plan is to start bumping my contributions incremetally over the next 20 year.

I'm 38. so fairly screwed. I really should sit down and do some sums to see where i want to be.

What i really need to do is buy my self a cheap house, now, 15/20 year mortgage so I don't need to worry about rent when i'm older. That's my main concern at the moment, what ever amount pension I get will probably just be to offset what ever work i'll need to do to fund whatever lifestyle I want to live in the future.

Ive been saving in a pension since i started work. Current one is good and the equivalent of 18% ends up in there. Still young. But when you look at the projections for defined contribution you need silly amounts to be able to live like current pensioners.

Still i'm going to do the best i can as i dont think relying on the government and state is a viable option either 40 years down the line.

Not amazing but better than many. I'm 37, last year's statement said there was around £70k in my company pension, with another £20k or so in long term savings/investments elsewhere. Mortgage should be paid off within 10 years. There may be an inheritance in the next few years to help things along (my sister and I are my grandfather's only living relatives).

I'm about to start a new job so intending to bump up contribution levels a bit more when setting up the new arrangements.

My advice to young people I work with and my own kids is to start your pension early and let intrest do the work for you.

30k @ 7% growth and £200 added each month for twenty years is £250,000 which wont give you a brilliant annuity income but is still a substantial lump sum.

I'm lucky in that pensions are compulsory over here. Everyone has at least one (State) anyone who works probably has a company pension plus another private/investment one on the go.

I'll not be rich when i retire, but I'll be able to live. Will probably be working until compulsory retirement add i didn't really join the world of work until my mid 30s.

When I looked at transferring my UK pension pot over, i got laughed at as it was so small compared to the time I'd spent paying in. And that was one of the better UK company pensions around at the time. (But i was only there a couple of years)

My basic plan is tonwork until I'm mid sixties, give any property to the kids, buy a camper and spend the next ten years travelling, living of the state pension and savings after which I expect my body will expire and pensions wont matter

I don't think it's fair to say that previous governments haven't warned us about the reality of future state pensions. I picked up the message loud and clear at age 21, in 2001, so under Blair's second government, right? At the time I'd started as a trainee investment manager at a small private bank. I was on a final salary scheme there, making over-payments on the student loan, and using some of my ISA allowance (not all of it, it wasn't a great time in the City...). Whilst the job security and benefits were solid it was still working in a bank, right, so I quit after two years to get back into academia. And therein lies the rub.

During the PhD and postdocs most waive their pension contributions as the salaries are so small but as we (and I presume other professions) are effectively in training for so long it means we don't start pension contributions until our early-mid thirties... I'm now a state researcher in France and even if I worked until the (current) compulsory retirement age I wouldn't have done enough service for a full pension. You should see a French payslip too, they often run onto two A4 pages with all the deductions and weird calculations the state makes.

In essence, I've got a job I love with a mediocre salary but ace job security. What'll happen to me in the 2040s, I've no idea... So depressing but I'm going out cycling now, am in the Alps 😀
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£250,000 which wont give you a brilliant annuity income but is still a substantial lump sum.

You haven't factored inflation into the calculation - £250,000 in twenty years time will be worth much less than it is today.

My pension plan statements suggest that at 50 I have funded a lot of expensive cars and fine wine for some spiv in the city but I end up in a cardigan with holes eating dog food. I plan to work till I drop.

We recently found out that the sister in law is mid 40s with no pension, and a 100% interest only mortgage (Edinburgh new town so should be appreciating nicely but.....) and just lost her nicely paid financial job (£60k+) she's just had to borrow £400 to get her through the month.

Although my pension is being squeezed I feel better about it.

36, One UK pension pot of around 1k in 2001 - not checked back on that one for a while.
Then about 11 years as agency/contractor not paying into anything
Just short of my 2 years in the not quite gold plated company scheme when I move to Oz so I got my cash back but the company got their 8k back out of that one 🙁 👿
Finally getting some paid in here in Oz where the minimum company contribution is nearly 10% just checked up to nearly $8k(Aus)

I don't expect to ever buy a house, I work with my brain so as long as that is good I'll keep working. After that it's lottery wins and any inheritance. It's a really depressing situation if you keep thinking about it but in reality I'm doing what I can. The amount of money required to service the promises made to people already is staggering (the Steel Works thread highlighted it like many other companies is mostly a gaping pension black hole with a bit of industry on the side) the monumental increase in housing prices that has mostly benefited those that had the pay bugger all in pension get a magic bag of cash every month till you die no strings attached is going to hurt a lot more people.

I'm sorted as I've got one of those gold plated NHS pensions. It's worth loads apparently 😯

Being slightly more realistic though it would appear , from the statements they've sent me, that despite my contributions having gone up a couple of times recently and apparently going up again this month I'll be able to claim the pension when I'm 69 and it'll be worth a fairly paltry sum.

Not quite what I keep reading about how this fantastic pension will leave me retiring and living a lifestyle similar to Hugh Hefner!

Those pension return figures are terrible. £1M for £25k! The only reason I can see to pay into a pension is the free money from your employer. As I don't have one of those my meagre savings have been going into property and shares. Not a huge amount but it's currently returning £400ish a month, plus a bit of capital growth. The nice thing is it is doing that now so I can reinvest. I imagine I'll still do a bit of work well after 'retirement'. Not sure if this is a good plan but the only alternative is dying young.

Many are sadly screwed especially if reliant on public sector ponzi pensions

And the interest only mortgagae route to financial salvation may also be a disappointment

Not sure about the term feudal capitalism NW - although it has a nice ring - but our selfishness and lack of planning will have adverse impacts in future generations. Either that or the public pot ends up being considerably smaller than expected.

30k @ 7% growth and £200 added each month for twenty years is £250,000 which wont give you a brilliant annuity income but is still a substantial lump sum.

7% growth - where the hell did you get a fund that gives you that? Stocks, especially oil, have tanked this year. Started a pension last year, the £10k I put in over the year is still worth £10k. I make that 0% growth?

I'm with Grum, think I'll take up base jumping when I retire. Always wanted to try it but still being young(ish), too much of a risk at this stage in life.

I'm 26 so I work till I die, I think.

My pension plan....

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I've got 2 private pensions. one is ok. One makes me feel like I've been raped. But its nowhere near what I'll need to exist at more than a subsistence level in retirement, given that the state pension will be a quaint memory by the time I reach 'retirement age'

In all seriousness, I've already accepted that I'll be working till I drop. If you've not, and you think you're going to have a 'retirement' that in even the slightest tiny way resembles the one the baby boomers are presently enjoying, you're delusional!

I think the private pensions industry is going to end up making the whole banking/PPI mis-selling scandal look like a minor accounting error at a corner shop

Mine has been substantially above 7% for many years, helped this year by me asking them to move it out of oil companies. I posted that suggestion on here btw and got much derision from the usuals, oh how I laughed.

I dont have a massive sum but logging in online and watching it earn more than I used to earn for working is quite nice and makes you realise how the rich get richer.

If both sets of parents die without having to go into a home for years then we're OK.

If they go on forever racking up huge care home bills, then we're a bit screwed.

Our main priority is being mortgage and debt free before we are 60.

We both have small pensions, but our total pot combined is probably worth 40k at the minute.

Not being funny, but will you need an income of £25k? (assuming mortgage planning has that paid off)

I love the cosy, comfortably-off, middleclasstrackworld assumption that everybody owns at least one property.

Meanwhile ... back in the real world.....

I'm not too worried about myself (48) and my wife (50) as we could retire now in reasonable comfort (with some lifestyle changes), however I'm rather more worried for the situation when my kids get to retirement age.

well if financial planning comes into it it seems crazy to save blindly for something that may not happen at the cost of not having your own roof over your head....meaning you need to save even more to pay the rent during a time in your life that may not happen when you have no income. - all while paying inflated costs to rent someone elses house - surely ?

Unless you need to be flexible for work moves every few years then i look at it like paying your debts off before you save.

But i guess thats my opinion YMMV that said - i started my pension when i was 23 and put in the max i had to to get max company contributions - but no more. my own investments are outperforming my pension by a significant %age. How ever although my company pensions going down and the markets depressed - the number of units i get each month is huge compared to 3-4-5 years ago so if the market ever picks up ill see huge gains. MEanwhile its just sitting there doing its thing.

Another one screwed here.
I'm 39 and only started a pension a few years back so it will never be worth much.
As with others here the only thing I can see working for me is that we have a nice house in the South east and when we retire we can downsize and move to a cheaper part of the country.

Something just doesn't add up with all of this. Is the only way to make money in this country any more just to keep selling/renting over inflated property to one another?

Something has to give, suspect it's not going to be pretty!

I'm 43 and my wife 40.
She's been teaching for 16 years, when she started it was generally understood that you'd retire at around 60.
Recent changes to teachers pensions have scuppered this - and they are now expected to work until they are 68.

I wasted my 20s and didn't start earning 'proper money' until I was 33.
I've been paying into the defined contributions scheme at work for the last 9 years, I pay in 5% and my employer matches it.
I can't remember how much is in there but it's not a lot.

We don't have any inheritance coming out way - my folks don't own a property and the in-laws won't be leaving us anything.

We are paying off the mortgage on a great house, which I don't want to sell in order to fund our retirement.

So, in short - I've got 20 years to build a retirement fund.
On the plus side I have a job which is largely desk based, there is no reason I can't work part time beyond mid-60's
I'm also pretty handy with woodwork tools and can turn out saleable items fairly easily.

I've been to a few school reunions lately and it amazed me how many people have nothing and no plan. made me feel quite good about my own crap situation.

I plan stuff and so decided that I'd want a pension pot of £600k at 65 so working back assuming 7% growth I needed to build up £150k at 44 so did that. Now just build up ISAs so got a mix plus my home which I could downsize from/move to a cheaper area if wanted.

Buying my 1st house as soon as I started work in the mid 90s helped me a lot but I don't earn a silly big salary.

This thread has re-affirmed what a fortunate position I'm in, despite not being a 'high earner'

Started in a FS pension scheme 10 years ago age 22, and if joint company / Union statements are to be trusted, no intention of closing for current members.

Also received some inheritance as one of my parents died a few years ago. So long term financially I should be OK.

Do feel for the next generation. Inter-generational inequality could become a rising issue as wages / assets / houses stagnate.

What's certain is if you fail to plan for your old age then your the one that's going to take the hit. You may come to regret a cynical approach. The world in the 60s 70s 80s was no more predictable than today. You just have to play the cards your dealt.

I saved into pension scheme and bloody glad I did.

agent007 - Member

Something just doesn't add up with all of this. Is the only way to make money in this country any more just to keep selling/renting over inflated property to one another?

Something has to give, suspect it's not going to be pretty!

I personally wouldn't bet the farm on buying your way to wealth with property - as you say, something's got to give.

Homeowners and BTL magnates have been protected at all costs since the credit crunch for the sake of the Banks balance sheets. 0.5% interest rates and restrictive planning laws to ensure demand outstrips supply - the later is changing, large scale building projects are being green lit, the tax changes to make BTL less attractive should start to increase supply soon. Interest rate rises might still be a while off thanks to troubles in Europe and China - but it won't last forever. I don't suspect they'll crash, it's being too carefully managed for that, but I wouldn't bet on buying a house today for £250k to be worth £1m when you retire so you can equity release a huge pot for retirement.

thekingisdead - Member

Do feel for the next generation. Inter-generational inequality could become a rising issue as wages / assets / houses stagnate.

Maybe it will, maybe it won't one thing I try to remember is that the powers that be, do at least try to bend to the will of voters, as generation Y and the Millennials get older more of them will vote, and because of a growing population there are more of them than baby boomers - plus, the first of their generation is reaching 70 now.

If you accept that the housing market is a very carefully controlled market (which I believe it is) then it's inevitable that when more people who bother to vote want it to move, it will. You can see it already, both main parties are talking about young people and home ownership - at first that meant another artificial tool to make the unavoidable, affordable (help to buy etc), now it's another less artificial tool, affordable homes sold at 80% of their 'value' - but the tide it turning.

binners - Member

Not being funny, but will you need an income of £25k? (assuming mortgage planning has that paid off)

I love the cosy, comfortably-off, middleclasstrackworld assumption that everybody owns at least one property.

Anyway, since when was having a mortgage middle class? I thought the middle classes mostly inherited.

The middle class might get inheritances but I suspect I'll be in my 60s before my parents go.

Thats my point scotroutes. The housing market has been rigged, and corrupted to such a degree recently that to qualify for a mortgage and get onto the property ladder is the epitome of middle class. Because a mortgage is becoming less and less of a realistic proposition to people on 'normal' incomes, and a generation brought up paying inflated rents to (older, luckier) BTL Landlords which mean saving for a deposit is all but impossible

The inherited wealth you talk about which may have defined being middle class in the past, is now what pays the deposits on ludicrously overpriced housing for the children of the middle class.

Do the maths. average income in this country is about 25 grand PA. Take a look at property princes. It just doesn't stack up. Its completely unsustainable.

Inheritance is probably a bit of a thing of the past for a lot of people now with longer lives, fixed pot pensions the house and assets are going to be getting flogged to fund the rest of retirement

Inheritance is probably a bit of a thing of the past for a lot of people now with longer lives, fixed pot pensions the house and assets are going to be getting flogged to fund the rest of retirement

Yeah - best thing for my daughter would be if I drop dead right now. That way she will be on the housing ladder. Otherwise she hasn't a hope.

It's going to be very interesting to watch how my generation (in my 40s) and below take to being pensioners. My guess is not very well. I think in general we are (and have been encouraged to be) a consumerist lot putting short term ownership of 'stuff' ahead of long term security. Shopping has become the number one leisure activity FFS. However you cut it very few pensioners get to have much toy money, and I can't see that being anything but worse in the future. As a generation I think we are going to struggle with the concept.

Thinking about the inheritance thing, maybe this will change for our children's generation (I have 2 at 6 and 4 and I'm 39). People are having kids later and later so the kids should be younger when the parents die.....maybe