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I'm worth significantly more dead than alive. Company death benefits, couple of life insurance policies, mortgage paid off...
Sad that I won't be around to enjoy I if something happens to me before pensionable age... 🙁
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.
From what I have read, total transfer to a surviving partner upon your death is normally only whilst you are a paying in member - i.e. not yet retired. My father would have been the same had he died whilst still working but as he died a year into his retirement she only gets 50%. I'd check your ts&cs to make sure. If it does that's a serious bonus.
@trail rat, I was suggesting a shares isa so no need for an annuity and all the problems you and others have talked about, also just an example based on £50pm.
Ok but im talking about annunities completely seperate to my comments on your post.
My comments directed at you were what a sustainable draw down rate on your 122k would be to give long term income without buying an annunity.
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 wilburt says (though I don't think those calcs takes inflation into account.)
You can have as many pensions as you like, it only becomes complex if you start hitting tax limits by investing too much in one year. Just open a SIPP as well as having your employer scheme and simply have a regular saver that is automatically invested into the fund(s) or share(s) of your choice - ideally in a broad portfolio. Most of the common online brokers won't charge you fees for the fund purchases and there are plenty of 'balanced', 'cautious' or 'aggressive' funds to suit your feelings on risk.
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Standard Life's Head Office...shiny shiny...wonder why your pension is worth jack? If people think that their hard saved money is going to be available to them in 25 years time is kidding themselves.
Like many on here, im screwed. The cost of renting and general living costs (food/bills) coupled with a pretty low wage for most of my life meant no chance of saving. Following an unexpected opportunity of living in my deceased grandfathers house rent free for 4 years I managed to save enough to put a deposit down on a house. This was an opportunity im pretty thankful for.
Fast forward a few years and at 38 i have 20 years left on a mortgage, a family of my own, still no spare money but slight better wages.
It definitely keeps me awake at night sometimes thinking about how to cope financially in old age. I have no rich relatives and no likelihood of any money when my folks pass away as they have done some equity release thing with their house.
To be honest I done know if its best to use any money I can potentially save to pay off the mortgage earlier or to try and stick in a pension fund somewhere.
The advice from Konagirl, above, was really helpful and something im looking into.
There are lots of people on here who are in a pretty decent financial position and use this thread as some sort of willy waving 'told you so' kind of opportunity. Its pretty disheartening for people who are trying to make the most from opportunities they make, but will likely never have a pension pot at all.
The whole pension thing is a ticking time bomb, there must be millions of people who will have nothing in their old age and no way of paying for food or bills. Let alone the people who havent been able to buy a house and will have to find rent too.
I am going to have make full possible use of a "Lifetime ISA" when they become active next year to help boost my relatively small work pension and the state one (if they are still around in ~25 years time).
Luckily, even though I'm 42, I believe the rules as set down by Mr Osbourne in the last budget stated that people of any age who had already opened a "Help To Buy ISA" can transfer that money across to a Lifetime ISA. It can still be used to get a 25% boost to buy a first house, but also has a higher annual deposit limit, ~£4200 vs £2400.
, it only becomes complex if you start hitting tax limits by investing too much in one year.
Yep, managed to do this last year by completely forgetting that the company matched my contributions. Luckily Carry Forward is my get out of jail card.
[i]The whole pension thing is a ticking time bomb, there must be millions of people who will have nothing in their old age and no way of paying for food or bills. Let alone the people who havent been able to buy a house and will have to find rent too. [/i]
Yep, and far too many people spending money on 'bling' rather than putting some aside.
Rent-wise, it'll be added to the already huge social cost we currently have.
There are lots of people on here who are in a pretty decent financial position and use this thread as some sort of willy waving 'told you so' kind of opportunity
Are you new here? Did you expect anything different? Sadly, as soon as I saw this thread title I just knew that would be the case, and thats where this thread would end up. It always does in STW ivory towers land.
A lot of people on here haven't got a bloody clue just how lucky and well off they are, and just assume that everyone breathes the same rarified air. And then also assume that if you've not in the same position yourself its because you're a pleb who's spent all their money on big telly's etc, and they can then pass moral judgement on you, you fool.
Completely absorbed in their own spectacularly-pleased-with-themselves mindset, they genuinely have absolutely no bloody idea whatsoever! And more importantly they seem determined to retain this sense of devoid-of-empathy superiority, and wear it as a badge of honour to symbolise their own obvious glowing brilliance. Its a bit pathetic really. No need to name names. I just ignore them and read what the people who inhabit the real world have to say.
Anyway... back on topic...
Standard Life's Head Office...shiny shiny...wonder why your pension is worth jack? If people think that their hard saved money is going to be available to them in 25 years time is kidding themselves.
I've said it before but I firmly believe that in years to come the whole private pensions Industry will end up dissolving into the kind of scandal that will make the whole banking PPI mis-selling business look like just a little bit of an accounting error at a corner shop.
Standard Life's Head Office...shiny shiny...wonder why your pension is worth jack?
Your pension is worth jack shit because you paid jack shit into it.
Pensions are not miracle workers, what you get out is proportional to what you put in.
If you want to retire at 60 and have a £20k a year pension for life (just example numbers), then given you could live to 100, you'll need something like 40 years x £20k = £800k fund. You're not going to get that putting £50/month in for 40 years (£24k total), even if the fund charges were zero.....
I think the big gap in the auto enrolment pension scheme is the lack of provision to make swapping jobs/pension providers simpler. Alot of people, including myself are in careers where you're likely to switch employer on average every 3 years throughout your career. Currently in my early 30's I have three pensions!
I think there should be further legislation making it law that an employer must contribute to any existing pension and the pension companies should make the necessary bureaucracy changes to make this practical.
Currently in my early 30's I have three pensions!
It's very easy to consolidate them all into a SIPP (I've done that). Only if they are final salary pensions is it worth keeping them where they are.
Probably very lucky compared to most. 52years old and have 21 years of final salary NHS pension with an additional £60k purchased (half of my redundancy).
Swings and roundabouts I suppose. Job is boring and I took a conscious decision 15years ago to stick with safe and dull for the pension/benefits. I don't ever want to retire just do less of something different. My father's 88, still works a bit and would be gutted if his contract wasn't renewed.
When I have extended periods of time off I find that I don't enjoy life so much. I need structure and to be busy to enjoy my hobbies etc more.
When I have extended periods of time off I find that I don't enjoy life so much.
Do you need a chunky pension then 😉 ?
Sorry, I've not read all the above. I'm a pensioner. Life is better because I contributed to two, work and private: ISTR being told this was illegal, but I carried on anyway. I'm glad I did.
Life is better because I contributed to two, work and private: ISTR being told this was illegal, but I carried on anyway. I'm glad I did.
Not illegal at all.
When I have extended periods of time off I find that I don't enjoy life so much.
Do you need a chunky pension then ?
Work/life balance innit. All play and no work make Jack do sodding heaps of pointless DIY and start to think along the lines of 'I won't ride this morning it's only 15C and there is a faint chance of clouds'.
Well, I'll have bugger all but the "state" pension, so about £170 a week then. I don't bother worrying about it, life's too short.
its is a fine balance - while i do appreciate i have been lucky thus far.
There is an element of self sacrifice to get here - and an element of my parents threatening to disown me....
summer 2009 - i was off to ride in the usa on a particular route off the back of touring round the southern hemisphere all winter - fit as ****.
told my parents and was told - well you best get a flat rented etc etc your not living here doing that.
I have friends who still live that life - 6 months on the road - racing , riding having fun and 6 months working to pay for the other 6 months. and yes later in life they may settle down and get a job/pension/house.... but starting on the back foot to find them selves in a position where they have to save loads to make it worth while and ultimately - not bothering....
I know which id rather be doing in my heart but equally i want to have a family and a stable home for them so im stuck here doing a job and have pretty much stopped racing(but importantly not riding) as my work doesnt allow me the continuity to train.
But that has let me get my self into a position where ive been able to plan for the future.
its all swings and roundabouts and im sure ill go to my death bed thinking what may have been.....its not all golden spoon.
Standard Life's Head Office...shiny shiny...wonder why your pension is worth jack? If people think that their hard saved money is going to be available to them in 25 years time is kidding themselves.
This is a luddite view. That building is an asset, which is probably owned by either an insurance co. or a property co. whose shares will be owned primarily by pension funds. The rent that SL pay is therefore paying for your pension. The value of the building is therefore contributing to the value of your pension pot. I don't deny that there are some factions of the life and pensions market that are spivs and shysters, but let's not be silly, eh?
It's also not that big and expensive given how large the funds are they manage (£307.4b in 2015).
For better or worse working life has changed , many go to uni now and have a debt on paying back the student loan, additionally people then get married have a big dual income mortgage. Then the kids arrive.
It's no wonder that people find saving into a pension difficult, well enough for their retirement.
I' can see this being a very big problem in the next 20 odd years or so.
A lot can happen in this time also, but the stock market is now the big gamble for pension returns, gone are the final salary pensions.....
For most people it will be a difficult decision on what to do with the ever increasing demands of just leading a normal working life.
t's also not that big and expensive given how large the funds are they manage (£307.4b in 2015).
Or that expensive a location i.e. Edinburgh instead of central London
Me and Mrs-g have 2 kids and live in London, and just bought the best house we could afford on our average London earnings last year at 35. My plan to for retirement is as follows.
Spend the next 20-25 years as a wage slave paying off the mortgage on the house, kids leave home, then when we hit say 60 we can sell the house and buy a smaller place, as there will only be 2 of us, and we can buy that anywhere as we wont need to live in London anymore. use the rest to buy another small place to rent out and live off that rental income.
I like this plan as I think it is inflation proof, the only way I see that it could fail catastrophically is if the price of housing everywhere else rises much more then the price of housing in London, trapping me in the house.
Is this a good plan, what else am I missing?
I'm gambling on the collapse of the NHS reducing life expectancy to the level that us hardy fit cycling types will be able to pick up the savings of the dear departed. Alternatively, if I'm not in that group, I won't care.
One of our directors did a meet the people day at our office a few years back when civil service pay freeze and pension reforms were kicking in. I suggested the best thing I could do for my families short to medium term financial security was to die in service, and got a round of applause from my colleagues. My boss was less keen on my intervention, apparently.
[i]Currently in my early 30's I have three pensions! [/i]
So.
I'm early 50's and have 5 defined benefit, 2 defined contribution and a private one. It would've been more but I consolidated a couple in the 90's. Changed companies a lot plus a Contractor.
Eggs and Baskets.
[i]If you want to retire at 60 and have a £20k a year pension for life (just example numbers), then given you could live to 100, you'll need something like 40 years x £20k = £800k fund. You're not going to get that putting £50/month in for 40 years (£24k total), even if the fund charges were zero.....[/i]
This, with annuity rates at +£35k for £1000 pa you needs loads.
Where I work now (I'm a Contractor here) they've just implemented auto-enrolement, I'm quite amazed of the number of employees who have no (or very little) existing pension provision.
Also because of life-time limits it may be worth for a couple to start putting money into the one with the lesser pension provision.
its not a very diverse plan ?
I like this plan as I think it is inflation proof, the only way I see that it could fail catastrophically is if the price of housing everywhere else rises much more then the price of housing in London, trapping me in the house.
The price of housing in areas which are not easily commutable into london (or other big city) will always be much lower than in commutable areas.
Nothing is going to change that.
So I'd say you are right as long as you are happy with moving to such an area.
I guess the question is what shape will the housing market as a whole be in when you decide to cash out? If the whole UK housing market has collapsed massively then you might get a lot less than you think.
My personal (completely uneducated) opinion is that a long-term collapse will not happen. Prices in London and the SE will have to level off at some point but I think will always remain high within our lifetimes.
ff said:
[i]Not illegal at all[/i]
It was a long time ago, and I have a poor memory, yet I believe it was a pensions chap who told me that. I wondered why he'd said it.
A workmate's pension vanished when his previous employer was taken over by an entrepreneur who promptly did a Maxwell with the pension fund. That's one of the reasons why I kept the two separate.
We've moved from an era of lower life expectancy and defined benefit, guaranteed pensions, where employees were "on the books" of the company long term, even after retirement. you could see it that employees have been taken "off the balance sheet" of employers, and are now more short term costs. That's freed up corporate growth, flexibility etc but placed the risk and liability of employees retirement funding in their hands. We're now in a position where employers are being required to put tiny percentages under auto enrolment into employee pensions, which really don't amount to a hill of beans.
I'm not sure what the answer is.... I have friends who have no retirement savings at all and rely on property. I take the view that I'll need at least £500k in a pot to give me £20k pa retirement. When the average pension pot is nearer £35k in total, where do you go from there?
I think the Government are seeing this, leading to lifetime ISAs and the ability to extract funds from a pension outside of the annuity regime...but when its gone its gone.
"We're now in a position where employers are being required to put tiny percentages under auto enrolment into employee pensions, which really don't amount to a hill of bean"
but importantly its enough to reduce/eradicate the benifits they would have been entitled too when it comes to the crunch.
We've moved from an era of
One of the biggest changes is the distribution of wealth, the middle / lower classes have a lot smaller share now......
<I> One of the biggest changes is the distribution of wealth, the middle / lower classes have a lot smaller share now...... </I>
...a consequence of taking the employees "off balance sheet", with the resulting flexibility, growth and profit flowing to the stakeholders. I think its much more complicated though than this, as general standard of living, disposable income is so much higher, and flexibility re who and how we work has lots of benefits.
One thing that has taken a hit though is the retirement income, which has shifted to individual responsibility. The problem is individuals haven't adjusted for it - partly because we aren't able to, as wages didn't increase to fully compensate the loss of defined benefit pensions, and partly because putting a roof over our heads (rightly) takes first charge on our income...
Your pension is worth jack shit because you paid jack shit into it.
No, my pension will be shite cos the company I worked for at the time decided not to pay f### all into it for more than a decade, during the good times, then whined like a banshee and paid people off when they realised they weren't just going to have to put their hands in their pockets again, but actually quite deep into their pockets.
Dicks.
Your pension is worth jack shit because you paid jack shit into it.
cos the company I worked for at the time decided not to pay f### all into it for more than a decade
I rest my case...
Is this a good plan, what else am I missing?
Probably pretty good but:-
I don't think it's tax efficient (Capitol Gains Tax vs pension relief).
You may expire prior to reaching 60 - do you have life insurance that would allow your wife to pay off your part of the mortgage
Buy to let is getting a lot of attention ATM - as in a target for additional taxation.
An unholy alliance of interest rate rises, redundancy and downturn could lose your current house.
I don't think it's tax efficient (Capitol Gains Tax vs pension relief).
You don't pay capital gains tax on a main house. Given that a house is needed anyway, buying one (with a view to later downsizing) in an expensive central area where employment prospects are good and commute times short seems like a reasonably strategy to me.
And the choice between buying the buy to let or otherwise investing the leftover cash doesn't need to be made for years. The tax/investment landscape could be anywhere by then.
Difficult to predict pension funds in the next 20 years, but here is my real life take on the expectation right now.
I'm 61 and have worked all my life, always paid into a pension, even did top up contributions ( I'm not be self righteous here).
Reasonably well paid, but did make a lot of sacrficies.
Three kids, no car for about 5 years once when we had just £500 in the bank,
Recently retired from work , earned the most money I was ever paid, and it took quite a leap of faith to just walk away.
If you have no debt, mortgage free, kids grown up etc, then the amount of money you need to live reasonably well on is considerably lower than a salary to fund kids, mortgage, new cars, expensive holidays etc.
My opinion, or should I say expectation, is that my quality of life without work is much better. Having to adjust to lower income has been a little difficult as two kids are still at home.
£20,000 a year as an income in today's value, would be more than enough for me and my wife.
The trouble is that now that annuities are very poor, drawdown is a good long term option, but care is needed as the temptation is to buy expensive shiny things right now.
I rest my case...
Your case allows for a £0 contribution from Her Magesty's Government.
Even if pensions are frozen at the current levels , or are set at say £150 pppw that is £8k a year you wont need to find , and the magic £20K figure from your PPP becomes £12k
I think there is more to this than just having enough cash at the right time, my father worked till he was sixty five had a very physical (but very steady away) job and stress was non existent, 20 mins to work, tea on the table, only investment in children was preventing starvation until 16 and out to work you went - me on the other hand all the stuff that goes with "modern" life big house, sharing parenting, business, four kids into university, providing all the stuff we "need" and at 52 I am completely knackered both physically and mentally (my Father is 84 nearly 20 retired years) and if I was retiring at 68 on a state pension I think I would top myself - anyway just say that I think it is a very difficult world we are heading into and us 50 somethings all seem to end up looking after ageing parents (just as the kids leave home) I am lucky to have a good lump of property, a business, pensions that means I can more or less retire from full time work at 55 (the truth is I doubt I could continue after this in a proper job) I really worry about my kids having to work into their 70s
Not as screwed as a divorce....
Been paying in between 11 and 15% for the last 6-7 years, add to that the company share schemes hopefully we will be ok.
Wife has been in the same company for 18 years paying in the whole time so she is far better off.
Not sure if divorce is not a better bet long term as I could live very well on half my income the missus on the other hand