[Closed] Pensions in the news...heavy financial topic warning.

to be brutal, probably more than you can save.

🙁
Pants

This is one scary topic.

If you were a youngster starting off with a money purchase scheme based on today's stock market performance and life expectancy you would be looking at putting away 25%, maybe 30% of your take home pay each month to come even close to the current final salary schemes.

Funnily enough I said this last night, we are living in the golden age of retirement, there has never been a better time to retire (as long as you are old enough ;))

But remember what Mr C said yesterday about us all being in this together.

Some of us are all in this together!

based on today's stock market performance and life expectancy

It's the life expectancy that's the killer. My own pension is forecast to pay out little more than a tenth of what the best projection said when I started it. The fund isn't that much smaller than forecast but the annuity rates are a fraction of what people thought they would be 20 years ago.

My current plan is to get an incurable disease, take out an annuity and then use my retirement to develop a cure. Nothing can go wrong... 🙂

This is not new news the Tories pushed for private pensions in the 80's after they put there hand in the pension funds.
Private pensions funds are about as good has a Endowment policy sold
with your house/flat.
You have to be a MUG to have a private pension.

Hmmm.. however I spin it I don't think I can really blame the Tories for increased life expectancies. Could have a good go at Brown for dipping his claws in my pension fund against all advice though.

Scary topic indeed. I suspect inflation may strip my pension away long before I get to use it.

I don't consider myself a mug for having a private pension, although it was a company arranged personal scheme and for 10 years my employer paid 15% of my salary so that wasn't going to be turned down!!
Looks like B&Q might be inundated with +65 age employees in the next 20 years.

Torminalis Dont give up yet the Tories Love high intrest rates
for there investers

Yeah, because the Tories have everything under control. Rest easy folks.

you folks that heve pensions seem to spend an awfull amount of time worrying about them. 😐

you folks that heve pensions seem to spend an awfull amount of time worrying about them

It's true, if you save some cash you will end up in a moderately priced old people home. If you don't you will go to a moderately priced old peoples home. Hope my kids have an annexe in their plan.

i promise i didnt spell have wrong on purpose. 😆

😆

I promise I am not only being argumentative when you are in the room.

my company has just had it's "active" defined benefit scheme shafted

the same Unions "represented" the workforce and were as much use as a chocolate fireguard (Unison etc)

private schemes are only worthwhile if you get some money put in by the employer, or can put a lot in anfd use the tax benefits. The pensions industry has been fiddling on fees for years (why do you pay fees on a "managed" fund that consistently underperforms against FTSE?) the industry construct simply is wrong/ fraudulent. This is why they don't advertise anymore as the FSA/ASA rules would see them in jail.

personal experience is that the best the public sector will get is

"defined benefit" schemes closed to new entrants
defined benefit pension based on current salary linked to rpi or pay rise whichever is lower
substantially increased contributions
the loss of any early retirement benefits

well thats what they (Unison) recommended we accept

for those without a scheme I'd look at minimising outgoings when you retire (at 70+)

So is the ideal pension plan to buy a flat, rent it out to cover the mortgage, then a) sell it to buy a pension, or b) continue to let it and live off rental proceeds?

My current pension plan is b) and I don't pay into any pot. Am I screwed?

any income you get will be means tested, so most of your "pension" will just offset the benefits which you would receive anyway if you had nothing

which sums up the problem, small saving/ pensions are pointless if pensioners benefits/ income is means tested

you would be looking at putting away 25%, maybe 30% of your take home pay each month to come even close to the current final salary schemes.

and bearing in mind all investment is a form of gambling I suggest you spend it while you have it and plan on working till you drop or becoming a street vagrant (like me)

you folks that heve pensions seem to spend an awfull amount of time worrying about them

of course - having predicated a lot of your personal worth on a gang of grasping bandits you have every reason to be worried. It's like "Why do you robs banks?" "That's where all the money is"

It's hard to know what to do really.

The economy of the western world has ran out of puff and it is hard to know where the next big dose of economic growth is going to come from.

Artificially low interest rates as seen in the UK and US since 2001 did lead to growth, but the growth was not sustainable and collapsed in 2008.

From a purely economic/academic point of view I find it very interesting, but from a "I have to live in this world" point of view I find it quite frightening.

Funny you should mention this I just had a private pension statement through - over 7 years 16k was paid in, worth 25k now after 10 years. Not bad huh? Expected payment at 65 assuming 7% growth (!!!!) is, wait for it, £2k a year.

I moved to the civil service 3 years ago specifically for job security and pension. 'Defined benefit' is the key word to focus on, everyone jumps on final salary and I think they jump to the conclusion this means everyone is retiring on £40k odd. Not so, for me every year I work I earn a set (v.small) % of my salary up to capped %.

I think the issue isn't civil service people retiring on huge pensions (didnt the latest report say something like £8k average?) It's that it is the government who bear the risk of a defined benefit scheme and not the punter.

Thing is, one of the main reasons for taking the lower salary was the better pension provision, if your going to change the rules, I'd like a payrise please 🙂

Personally I'd rather have the money myself and invest it how I see fit over the years. Anyone who'd been putting money in the property market over the last 15yrs will have made a killing.

Thing is, one of the main reasons for taking the lower salary was the better pension provision, if your going to change the rules, I'd like a payrise please

I think you will have to move back to the private sector for one of them!

I wonder what other austerity measures are going to be introduced? I wonder if we will more vocal demonstrations against the cuts in time as well?

spend it while you have it and plan on working till you drop or becoming a street vagrant

This.

I'm lucky enough to still have a final salary pension. It will pay out handsomely. However, with the rate that the retirement age is going up, I'll probably be dead before I see any of it :o(