[Closed] Pensions - how screwed are you?

Hmm, this is not a subject I like to get into. The die before I'm old approach is my main aim.

I have an old pension that is about £20k now and I'm about to start work contributions again.

38 now and very little pension, plus my wife doesn't have one as is part time/temping at the moment on low salary.

The one plus is that over the last 3 years I reduced my mortgage by 2 years by making overpayments.

I need to budget more if I can do that to some degree still and pay into a pension.

Having said that, I've lived a good life over the past 10 years. I have no regrets.

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

People prefer to ignore the reality of the situation?

Either spend and/or fight Canute-like against the inevitable (see most pension disputes, "it's not fair, we didn't sign up for this." )

Problem with inheritance is that governments don't like you to be prudent and plan for future generations. It's immoral don't you know, How very dare you pass on post-tax income or take responsibility for your family. We want a slug of it first.....

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.

Works quite nicely as a theoretical idea, or if you do it before everyone else does. However, there's more than few people who, having seen their pension provision and the recent increase in divide in prices North to South will be thinking about doing this (look at how the bubble has expanded out of London into broader SE, all the way to Norwich, Bristol etc) will now be thinking about doing this as their 'pension plan'

So suddenly, in about 10-15 years time, you'll get a whole load of people trying to sell up in the SE and buy in the North, which will change the supply/demand equation somewhat in both areas. And unless there's been a significant drop in SE prices in the meantime (20-30+%) then it'll be interesting to see how many buyers there are for your super-expensive SE property.

Not having a pop at you personally but the assumptions people are making about property prices never crashing/falling/progressing ever upwards are heroic.

Essentially a lot of people are expecting the long-term future to be exactly the same as the recent past... which is generally not an effective investment strategy...

Shopping has become the number one leisure activity FFS

I was helping a friends girlfriend with her CV once for getting a job in a similar field to me.... I couldnt get over that her interests outside of work amounted to shopping and socializing(ie the pub)..... i suggested she deleted the entire section rather than write that.

Don't overlook managing your own money in ISAs. Even with a falling stock market there's money to be made. Despite some dead ducks and a few premature sales I managed to gain just over 31% at yesterday's prices since April 15. My sources of information are only the same as every other amateur's i.e. what's on the net and in the press. You need to spend time reading and calculating trends and risk etc but I can't see any other way of managing money coming close.

Incidentally, isn't it time we started talking about defending and improving the welfare state? It saddens me to see so many people accepting their lot of increasing poverty with age.
It doesn't have to be like this!

Interesting thread that confirms my thoughts that most people have not got adequate retirement plans.
I haven't paid into a pension since being made redundant 3 years ago. I'm now self employed and I daren't put anything in to the pension in case the work dries up and I need the cash. Now I need to be putting about £8k a year into a SIPP to get a £500,000 fund to give me £20k a year income.
Employer pension contributions are a under appreciated benefit, something I come to realised more now I'm self employed. I

Started my apprenticeship with MoD in 1992, and we had no option but to join the pension scheme, which looking back on it was great. I only stayed there for 2 years after my 4 year apprenticeship, but it gives you a mindset that you need to put the money away.

I have 16 years worth of contributions in a final salary pension scheme from my last company, and moved 16 months ago to my current employer, who no longer have FS, only a defined benefit scheme.

My mortgage will be gone by the age of 46, which will free up a big chunk to invest for retirement/nobeerette's future.

It's not something I'm overly worried about, my and my families health is the most important thing.

Wellll. I am not really sure if I'm in a good position or not. I suspect not.

I've been paying in what I considered to be a reasonable amount since my first job after graduating from uni; so paying in since about 24yrs old. Now 38 and have about the same as the OP in my pension pots, I think. I've got several spread over various providers but only because of the pensions offered by the companies I have worked for, rather than a conscious effort to spread the risk.

My current company offers what I think is a very good payment option; if I put in 5%, they put in 10% so it is actually quite a good incentive to stay there & keep paying in.

You look at the projections of what I'll get out of it and I'm not exactly going to be living like a king!! Hopefully I'll have paid the mortgage off by then.....

Incidentally, isn't it time we started talking about defending and improving the welfare state? It saddens me to see so many people accepting their lot of increasing poverty with age.
It doesn't have to be like this!

Pensioners are doing pretty well at the moment, the triple-lock guarantee is very generous (by social welfare standards).

Not having a pop at you personally but the assumptions people are making about property prices never crashing/falling/progressing ever upwards are heroic.

No I agree with you - as I said I'm pretty screwed!

However, whatever happens to the housing market one thing will remain true and that's that a large 4-bed house will always cost more that a small 2-bed one, so releasing cash to fund retirement that way will always be an option.
The question will just be how much that ends up being.

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

NHS pension is guaranteed by the state (you cannot buy one like that) and its inflation linked to boot. As its related to final salary/career average its the sort of pension those of us who have to save cannot replicate, if we trid we'd have to be saving 40% (?) of our income

"Not having a pop at you personally but the assumptions people are making about property prices never crashing/falling/progressing ever upwards are heroic."

My only assumption about housing is that ill probably need one for most of my natural. Its nice to watch the cost of living in it go down rather than up as my rent used to every other year.

it might go up . it might go down .... how ever thats immaterial if its primary job is to keep the rain off my head and the cold out.

So... does this mean that those who work in the public sector will all be riding around on gold plated unicorns and lighting huge cigars with burning 50 quid notes, while the rest of us work three jobs each until we drop? Most jobs involving the supply of coke and hookers to the publicly funded wrinklies as they lord it over us?

For those of us with final salary schemes, accrued benefits are dependent upon your employer remaining solvent. This is not much of a problem in the short term, but long term (20+yrs) who knows? At which point this lot become relevant:

[url= http://www.pensionprotectionfund.org.uk/DocumentLibrary/Documents/what_is_the_ppf.pdf ]Pension Protection Fund[/url]

What's going to happen over the longer term is that businesses that have been raped by private equity (Boots, AA, Saga, etc) and that are now leveraged up to the hilt with cheap debt will go pop when interest rates finally rise. The assets will be sold off, leaving just the pension funds which will in all likelihood be underfunded. The PPF won't be able to cope and those in the pensions business know this. It's the next financial services scandal.

When I was 18 I was TOLD I HAD to join the pension scheme (it turns out that wasn't true) but it's some of the best advice I was ever given.
Next year when I turn 60 I'll get a pension just short of £30k plus a lump sum of just under £200k.
It's never too early to start a pension.

7% growth - where the hell did you get a fund that gives you that?

"Not having a pop at you personally but the assumptions people are making about property prices never crashing/falling/progressing ever upwards are heroic."

Those extolling the value of not owning a house should really be on the Bivi and bikepacking thread! I work in the SE, I live in the SE, I wanted a nice-ish house with a garage and outside tap, what exactly was the alternative to buying a house? If it goes up, winner. If it stagnates, mehhh, it'll probably still buy a nice house up north when we retire (or in ~10-15 years when we're bored of the rat race). No financial plans based around it, and inflation seems a certainty, so at leas the cost will go down.

As for pension, 29, been paying in 15% on top of my employers 8% since 25, and before that it was whatever the minimum was (5% +5% I think). Original plan was to 'cap' my wage at something sensible and pay in the rest, on the upside with being made redundant this means I can find a new job that pays 20% less and still have the same net pay, and not be behind on my contributions for ~5 years in the worst case.

I'm not screwed, but feeling let down as a pathological saver.

The NHS Pension Scheme pays for its current pensioners through contributions of people who are in employment and paying-in during their working lives.

I joined it in 2003, when it was still a final salary scheme and cost 6% of my salary. I would have retired at 60, with a pension of maximum 50% of final salary.

Following post-2008, 2010 and 2015 changes: I am now paying contributions of 13.5% at around [u]£900 per month[/u]... for something I'm worried I'll never get! The Scheme is now "career average" rather than final salary and - crucially - is linked to State Pension Age. The 2008 review made the Scheme sustainable: all the changes since have been to generate larger surpluses to support other government expenditure.

I am very worried that there will be another substantial increase in State Pension Age; further increases in contribution; and further dilution of benefits.

I am especially concerned that high contributors will opt-out of the NHS Pension Scheme due to a) the £1m cap on untaxed contributions and b) new / private / non-NHS providers reducing the numbers of people who pay in to the scheme. GPs, Consultants and small number of senior nurses and managers are subsidising a much larger number of current pensioners.

I have also been saving £600 per month into ISAs since 2007. This is my plan B, but as my pension contributions have more than doubled, this has become harder to sustain. I'm also worried about a raid on ISAs! 🙁

you'll get a whole load of people trying to sell up in the SE and buy in the North, which will change the supply/demand equation somewhat in both areas.

France is cheaper and warmer. But there are a lot of French people there.

Those extolling the value of not owning a house should really be on the Bivi and bikepacking thread! I work in the SE, I live in the SE, I wanted a nice-ish house with a garage and outside tap, what exactly was the alternative to buying a house?

I'm also worried about a raid on ISAs!

It's right to be concerned about these things, but this sounds ever-so-slightly like a case of worrying too much... are you envisaging a Cyprus bail-out scenario?

It's never too early to start a pension.

In principle, yes, totally agree. But:

I did this, and prioritised it over getting a mortgage and will now have to pay at least 100k more + interest to buy a house as a result (+ add in tens of thousands spent in rent)... so starting a pension young has turned out to be a less than optimum strategy... I'm worse off as a result.

More importantly, look at how low the salaries are for the younger workers now, the job insecurity and the rents they have to pay in order to be where those jobs are, and you'll realise saving for a pension isn't an option - there's no money left at the end of the month... living costs have eaten it all up

So can final salary pensions go tits up then? What happens if the company goes insolvent?

Im Ok . Started work at 17 in 1986 and the only good thing my Dad did for me was to make me start a pension.
Went with Scottish Mutual and have around £90k with them
Took out a second Equitable pension in 1995 and have around £90k with them as well
Also conracted out of SERPS and stayed out for years and there is £40k there as well.
No mtg so should put more aside as the tax repayment make it a sensible choice.
Would like to think I can get away with £250 - £300 a week income as I have no dependants or illusions of grandeur

I only started a pension last year - I'm [s]41[/s] 42 whoops lost a year there. To be totally fair we are in a good position with a significant cash pot in funds, ISAs and two properties mortgage free. I used my SIPP to reduce my tax liability but having now woken up to them I'm quite shocked by some of the schemes and some of the liabilities that big companies are sitting on. Our plan is for me to work until I am 45 and then either stop completely and do some contract work while my wife goes back to work or get down to 3 days a week. I acknowledge we are very 'lucky' but once upon a time I took a massive risk which paid off, otherwise I'd be utterly utterly skint. Even so the returns on it all aren't flash. I really worry for my daughter, so much so we've started chipping cash into funds for her as there is no way the next generation could afford to live based on what I observe.

So can final salary pensions go tits up then? What happens if the company goes insolvent?

The pension lifeboat fund thing kicks in and bails it out. If you're deferred you get 90% of your pension paid out up to something like £40k a year.

https://en.wikipedia.org/wiki/Pension_Protection_Fund

I will most likely work till I drop.

35 and nowhere near buying my own place, not much spare cash at the end of the month so no real savings. Will inherit a good lump sum when my parents pop it but it looks like that'll be swallowed up caring for one or both before I get to see any of it. Have three small pensions but they total £12k between them and the largest one has gone down in value for the last 3 years!

I could, in theory, do no fun stuff (biking or socialising) and put a few quid away to save for a retirement I might see but that's worse than hell so I'll take the option of a skydive without a parachute (or some other fun way to check out 😈 ) but TBH I doubt I'll get to my retirement age of 70 anyway. Even now people who reach retirement age at my work are staying on for 5+ years and stopping new blood from entering the workforce. I really don't want to be in that situation but I cannot see any other option. Unlike a lot of my school friends I did not follow a specific career straight after school so my pay has been low. A lot are in the public sector (teachers, medical, civil servants) and they're all seemingly sitting pretty with houses, savings and a good standard of living. It is actually starting to become an issue affecting some friendships already and I can see it getting worse as the gap between the have and have-nots gets worse, sort of like a micro version of the country as a whole.

That was depressing writing all that 🙁

I'll ask this - anyone else really started to look at lifespan with all these celebs dying, I'd never really thought about it but recently I've been a lot more "jesus, I could have 15 years so bugger this I'm going to do what I want"

Well, I'm 58 very soon. The house is paid for and the pensions are worth about 250K. Mrs Z's not likely to get much as she didn't work for 20 years while the sprogs were growing up. She only works a few hours each week now.

My family history would indicate that I'm unlikely to draw my pension, but Mrs Z should be OK.

God help my daughter or the grandchildren. I do worry about their futures.....

So can final salary pensions go tits up then? What happens if the company goes insolvent?

The current pensioners get preference over all the deferred members too so the people who got made redundant are doubly shafted.

The current pensioners get preference over all the deferred members too so the people who got made redundant are doubly shafted.

Nope, the fund will get bailed out by the PPF and deferred members get 90% of their pensions.

https://en.wikipedia.org/wiki/Pension_Protection_Fund

Ah right, I'd forgotten about that, but 10% could be a significant cash reduction for a long running scheme.

edit - didn't not read your first post about it, I was catching up with other threads.

You still get 90% of what you were due, which is pretty good considering that prior to the PPF being created, you could have got zilch (e.g. Robert Maxwell etc).

Ben H. Don't know the detail but when the make changes to pensions it's normal (from my experience) that what you have already accrued stays the same. Only going forward will the average salary kick in. As I said I dont know the NHS pension change details. But I'd be very surprised if the change included back dating. What's been earnt can't be taken away.

37 year's old here, only been paying into a pension for about 5 years, I had a colorful youth! I'm sure there will be no state pension to speak of if I live to the ever increasing retirement age, so my current plan is selling the family house, downsizing and resorting to petty crime to buy food.

I'm sure there will be no state pension to speak of

If they did get rid of it, people would starve to death in their 100,000s!

I can see if being means tested and reduced, but for > 50% of the population, it's pretty much all they have.

http://www.telegraph.co.uk/finance/personalfinance/pensions/10182664/Number-of-people-paying-into-a-pension-hits-60-year-low.html

Very screwed. Plan A is to make very good friends with a Vet, Plan B is lots of insulin.

Plan A is to make very good friends with a Vet,

so they can shove a thermometer up your arse and charge you £80?

Anyway. Genuine question.

Let's just say that, hypothetically, you had a payrise and wanted to put an extra 50 quid a month into your rainy day fund, and you've already got a work pension.

What are the options? Add it to the pension? Get an ISA that will probably pay about 1% interest? Something else?

It's not really a lot but maybe you'll get another payrise one day and be able to increase it...

anyone else really started to look at lifespan

The celebs thing is a red herring, theres more "celebrities" than ever before so more shuffing off at any given time.
We don't however plan well, if at all for death which is strange given its inevitability.

If I get 20 more years it will be substantially more than any male in my family history so realistically I can probably maintain interest in work for 15 years or so, then another 10 after that is probably all I need to fund.

I agree with your sentiment no time to waste.

Shares ISA?
I think 10pc is not uncommon but for calculating future value 7pc is reasonable.
[b]
£50 a month for 30 years @ 7pc gives you £61,000 leave that another 10yrs without adding any more payments and it doubles to £122,000

How many people would feel more comfortable about retiring with that as a lump sum no annuity gamble.

32 years old and currently got 35k in my pension pot. Only been paying into it for 4 yours so its cost me a fair bit already, but really need to up my contributions once the damned mortgage is paid off.

My caution to couples is not put all your bets on one of your lives. My parents did this with too much put into my father's pension (as it was better than my mother's). Only snag is he died at 66 so didn't really get much from it. Yes, she gets half of his pension as a widow's pension now but would be a hell of a lot better off if more had been invested in her name directly.

Does depend on the pension thoough convert.

Mine is diverted to my wife in its entirety in case of my death. - thats a term of my pension.probably one of the many reasons why its so shite. - im also currently forced to take a annunity with optional lump sum- draw downs not an option currently.

What you describe did happen to my grand parents though. Financial mess to sort out after my gran died unexpectedly and rapidly.

Wilburt - 122000 is only 5k a year at 4% draw down (a fairly well accepted draw down number) . Also most people educated in the matter of oensions and investing have scaled back to using 6% as their base line growth figure for pensions. 🙁

slackalice - Member

Plan B is lots of insulin.

Good idea- stockpile it now and once the NHS is abolished you can sell it for a fortune.