'Life savings' - do people still have them?
Discussion
J4CKO said:
Fotic said:
bertie said:
And £50k a year isn't exactly living the high life!
If your mortgage is clear, kids are grown up and gone then I reckon it's a pretty tidy sum. 
I genuinely don't think it's a massive amount, and it just bugs me that we are told to save, but get penalised if you save too much!
Grandfondo said:
TwigtheWonderkid said:
Ari said:
Grandfondo said:
Pension pot of 1.25 million required for 50k per year! 
This is the bit that frightens me. You need an astronomical amount of savings to get a half decent income from it. Again, makes you wonder whether it's worth it. If you're a 40% tax payer, you only need to save £6 to get £10 in your pot. many employers contribute. My employer pays in a further half of whatever I put in, so I only have to save £6 to get £15 in my pot. Plus you get returns on your pot saved so far.
TwigtheWonderkid said:
I'm sure you're right. But people complain about the returns on their pension, forgetting that what they have in their pension pot is far more than they ever contributed in the first place.
Well, no, its just not been taxed on the way in, it is taxed on the way out though.bertie said:
Grandfondo said:
Pension pot of 1.25 million required for 50k per year!
Exactly, and if you go over you get taxed horrificaly, so the message is make usre you save, but not too much!And £50k a year isn't exactly living the high life!
Don said:
Funny how many of us have had that experience. As a young man I afforded I car I really shouldn't have. It hurt mightily when it turned out to be a shed. It's a great memory now - but the lesson stuck with me for life.
Me too, I did the same thing, I wouldn't do it to myself again, but, oddly enough, I sort of do and don't regret it at the same time - worst thing is, one of those cars was a Honda S2000 and I wrote it off 
HenryJM said:
TwigtheWonderkid said:
I'm sure you're right. But people complain about the returns on their pension, forgetting that what they have in their pension pot is far more than they ever contributed in the first place.
Well, no, its just not been taxed on the way in, it is taxed on the way out though.I thought you could pull it all out tax free but this link says different
"The first 25% of your pension can be withdrawn completely free of tax"
http://www.which.co.uk/news/2014/07/pension-reform...
Cotty said:
HenryJM said:
TwigtheWonderkid said:
I'm sure you're right. But people complain about the returns on their pension, forgetting that what they have in their pension pot is far more than they ever contributed in the first place.
Well, no, its just not been taxed on the way in, it is taxed on the way out though.I thought you could pull it all out tax free but this link says different
"The first 25% of your pension can be withdrawn completely free of tax"
http://www.which.co.uk/news/2014/07/pension-reform...
Ari said:
So has the mindset of years of careful saving, slowly accumulating a nest egg gone? Is the idea hopelessly outdated?
No. My 21 year old student son, has savings of £23K. He also has a car.
When he graduates in 12 months he thinks it might be useful as a deposit on a house or flat.
In fact hardly anyone I know uses finance. None of my family or my wife's family, have ever bought anything other than a house with finance.
Those I do know who use finance, take financial risks that scare me, and have no concept of 'working it out' - for instance a guy I know was being paid 45p a mile to drive his own quite mediocre car by his employer. Gets promoted and is offered a 'flash' company car. Now IF that were me, I'd know how much 'profit' the old car was making me, and I'd know how much tax I'd be paying on the new one, and I'd therefore know what the Flash car was actually costing me.
I worked it out at about £4K a year. I'm not saying I wouldn't take the company car, but I'd know what it was costing me vs the alternatives.
Justin Cyder said:
eltax91 said:
1% below base? Isn't base at 0.5% at the moment? So he's actually getting paid for his mortgage?
That's my mortgage. It was on the news in 2008ish when about 1500 of us on that deal were written to by C&G to inform us that we wouldn't be getting paid now our mortgage rate was effectively their burden. Suits me, I've over paid the b
d furiously ever since.Grandfondo said:
Ari said:
Grandfondo said:
Pension pot of 1.25 million required for 50k per year!
This is the bit that frightens me. You need an astronomical amount of savings to get a half decent income from it. Again, makes you wonder whether it's worth it. Kermit power said:
What concerns me is that despite the annual statements and the like, I'm still really struggling to figure out what my standard of living is actually likely to be from my pensions!
Between my contributions and my employer's, I've currently got just over a grand going into my pension every month, which is the sum total of my savings. This, according to my last annual pension statement, will give me a retirement pot of £496k "in today's money", assuming the middling 2% return.
Given that their suggestion is a 25% lump sum followed by an annual pension of £11k from the remainder, they can go and screw themselves if they think I'm going to be buying an annuity!
Absolutely, it's the annuity rates that make it look terrible not the pot, think what you could invest the money in assuming that you get £124k tax free and £35.4k per annum for ten and a half years (£10k tax free and 32k at 20%), probably longer if it stays invested whilst you empty it. Between my contributions and my employer's, I've currently got just over a grand going into my pension every month, which is the sum total of my savings. This, according to my last annual pension statement, will give me a retirement pot of £496k "in today's money", assuming the middling 2% return.
Given that their suggestion is a 25% lump sum followed by an annual pension of £11k from the remainder, they can go and screw themselves if they think I'm going to be buying an annuity!
For me the biggest negative with pensions is the uncertainty as to when people can access their funds, until a few years ago it was 50, then they changed it to 55, as of 2028 it will be 57 and there's a proposal that it may be changed to be 5 years before state pension age rather than 10 years. I'd be gutted if I could afford to retire but couldn't access the funds to do so for a few years, this is what really puts me off saving in a pension, well that and the minimal benefits it offers over ISA's which is why I support the proposal below even though as a 40% tax payer I'd lose out I think this is a fairer approach which would benefit the country.
http://www.thisismoney.co.uk/money/investing/artic...
SunsetZed said:
Justin Cyder said:
eltax91 said:
1% below base? Isn't base at 0.5% at the moment? So he's actually getting paid for his mortgage?
That's my mortgage. It was on the news in 2008ish when about 1500 of us on that deal were written to by C&G to inform us that we wouldn't be getting paid now our mortgage rate was effectively their burden. Suits me, I've over paid the bd furiously ever since.Pit Pony said:
No.
My 21 year old student son, has savings of £23K. He also has a car.
When he graduates in 12 months he thinks it might be useful as a deposit on a house or flat.
In fact hardly anyone I know uses finance. None of my family or my wife's family, have ever bought anything other than a house with finance.
Those I do know who use finance, take financial risks that scare me, and have no concept of 'working it out' - for instance a guy I know was being paid 45p a mile to drive his own quite mediocre car by his employer. Gets promoted and is offered a 'flash' company car. Now IF that were me, I'd know how much 'profit' the old car was making me, and I'd know how much tax I'd be paying on the new one, and I'd therefore know what the Flash car was actually costing me.
I worked it out at about £4K a year. I'm not saying I wouldn't take the company car, but I'd know what it was costing me vs the alternatives.
Good on your son but I think he's in a very small minority, especially at that age, but across the population as a whole. I know people who've taken out a loan to go on holiday which is just mental IMO!My 21 year old student son, has savings of £23K. He also has a car.
When he graduates in 12 months he thinks it might be useful as a deposit on a house or flat.
In fact hardly anyone I know uses finance. None of my family or my wife's family, have ever bought anything other than a house with finance.
Those I do know who use finance, take financial risks that scare me, and have no concept of 'working it out' - for instance a guy I know was being paid 45p a mile to drive his own quite mediocre car by his employer. Gets promoted and is offered a 'flash' company car. Now IF that were me, I'd know how much 'profit' the old car was making me, and I'd know how much tax I'd be paying on the new one, and I'd therefore know what the Flash car was actually costing me.
I worked it out at about £4K a year. I'm not saying I wouldn't take the company car, but I'd know what it was costing me vs the alternatives.
The other thing I find scary is just how little many people seem to understand about financial matters. For example an otherwise reasonably intelligent friend of mine was saving for her wedding in an account paying a pittance in interest, but had debts on a credit card at over 20% APR.
I also agree on the business mileage thing, my old ZX made me about £3k profit per year
SunsetZed said:
For me the biggest negative with pensions is the uncertainty as to when people can access their funds, until a few years ago it was 50, then they changed it to 55, as of 2028 it will be 57 and there's a proposal that it may be changed to be 5 years before state pension age rather than 10 years.
It does rather make a mockery of the phrase 'financial planning'. You cannot plan anything if Governments are going to turn it upside down every few years. I prefer to think of my pension as 'spare' money; I certainly wouldn't like to base any plans on what it may or may not actually be worth when I get there. I am quite confident, however, that it will be less than I expect, if indeed I was even interested in what it was theoretically going to be worth. Because whatever it says it will be worth now, it won't be.Justin Cyder said:
SunsetZed said:
Justin Cyder said:
eltax91 said:
1% below base? Isn't base at 0.5% at the moment? So he's actually getting paid for his mortgage?
That's my mortgage. It was on the news in 2008ish when about 1500 of us on that deal were written to by C&G to inform us that we wouldn't be getting paid now our mortgage rate was effectively their burden. Suits me, I've over paid the bd furiously ever since.
RizzoTheRat said:
The other thing I find scary is just how little many people seem to understand about financial matters. For example an otherwise reasonably intelligent friend of mine was saving for her wedding in an account paying a pittance in interest, but had debts on a credit card at over 20% APR.
That's quite common I think. I had a mate almost fall out with me when I pointed out how daft he was to buy a £9K motorbike on finance with a fairly high APR when he had £10K sat in the bank. Apparently he couldn't touch his savings. I asked him whether, if he had £1,000 in the bank, he'd borrow £9K and put it in the same bank account as 'savings'? I was being stupid apparently.
It was beyond him that taking on the same amount of debt whilst he already had that money was effectively the same thing.
RizzoTheRat said:
Good on your son but I think he's in a very small minority, especially at that age, but across the population as a whole. I know people who've taken out a loan to go on holiday which is just mental IMO!
The other thing I find scary is just how little many people seem to understand about financial matters. For example an otherwise reasonably intelligent friend of mine was saving for her wedding in an account paying a pittance in interest, but had debts on a credit card at over 20% APR.
I also agree on the business mileage thing, my old ZX made me about £3k profit per year
To be honest I'm buggered if I don't use my car for business miles, as I need the tax free cash to keep the car roadworthy, so that I can use the car to get tax free cash for my business miles. Ah..........Doh............In all seriousness, last month I had the biggest garage bill I've ever had, but 4 trips to the South East at 45p a mile has more or less paid for it, and the car should only need normal servicing for a good length of time. I'm saving using the train for Winter. The other thing I find scary is just how little many people seem to understand about financial matters. For example an otherwise reasonably intelligent friend of mine was saving for her wedding in an account paying a pittance in interest, but had debts on a credit card at over 20% APR.
I also agree on the business mileage thing, my old ZX made me about £3k profit per year
The government doesn't really want you to save at the moment - except in terms of saving for retirement and building up house equity to pay for your care. Even that is probably not going to be their problem - but keeping people spending is, in terms of VAT receipts and keeping people employed.
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