Other people's facepalm financial management

[Ozzie Osmond]

CaptainSensib1e said:

Making pensions more flexible has been a real shot in the arm to pensions, makes them much more attractive as a way to save for retirement so should encourage more saving, not less.

^^^

[DoubleSix]

CaptainSensib1e said:

Sorry, I have to disagree with this. I work for a pension company and this is not what people are doing with their pensions. Basically, if you've been prudent enough to save your whole working life to build up a pension pot, you're not the sort of person to spunk it away at the first opportunity. That type of person wouldn't have much of a pension to start with!

Making pensions more flexible has been a real shot in the arm to pensions, makes them much more attractive as a way to save for retirement so should encourage more saving, not less.

Thanks for saving my typing finger.

[TwigtheWonderkid]

I was wondering why the bowls club car park wasn't awash with Lamborghinis.

[98elise]

CaptainSensib1e said:

Northbloke said:

uknick said:

An example of this is when Osborne allowed people to cash in their pension fund so as to generate growth in the economy, albeit temporary.

Agreed. What was he even thinking with that one?

There's a real problem with people not saving anywhere near enough for their retirements (so future govts will have to pick up the tab). I know, let them blow some of what little they do have on a car and a holiday.

Bonkers.

As a natural saver it really bugs me that all incentives are biased towards the feckless (e.g. bailouts, no repossessions for political reasons). Is it the absence of moral hazard (or is it the presence of it, not sure which way around!)

Sorry, I have to disagree with this. I work for a pension company and this is not what people are doing with their pensions. Basically, if you've been prudent enough to save your whole working life to build up a pension pot, you're not the sort of person to spunk it away at the first opportunity. That type of person wouldn't have much of a pension to start with!

Making pensions more flexible has been a real shot in the arm to pensions, makes them much more attractive as a way to save for retirement so should encourage more saving, not less.

Agreed.

People that want to piss the money away wouldn't save for retirement in the first place. I actually stopped paying into pensions 5 years ago due to their restrictive nature. Now that we have flexibilty I've started putting in as much as I can.

[Cotty]

98elise said:

People that want to piss the money away wouldn't save for retirement in the first place. I actually stopped paying into pensions 5 years ago due to their restrictive nature. Now that we have flexibilty I've started putting in as much as I can.

Still too restrictive as to when you can take it, I want to retire at 50

[Ozzie Osmond]

Cotty said:

Still too restrictive as to when you can take it, I want to retire at 50

I hope you've been doing your ISAs as well then - perfect for "flexible retirement".

I think quite a few people on this Finance forum do both. It's a usefully tax efficient mix-and-match strategy.

[CaptainSensib1e]

Ozzie Osmond said:

I hope you've been doing your ISAs as well then - perfect for "flexible retirement".

I think quite a few people on this Finance forum do both. It's a usefully tax efficient mix-and-match strategy.

Amen to that

[98elise]

Cotty said:

98elise said:

People that want to piss the money away wouldn't save for retirement in the first place. I actually stopped paying into pensions 5 years ago due to their restrictive nature. Now that we have flexibilty I've started putting in as much as I can.

Still too restrictive as to when you can take it, I want to retire at 50

I'm 50 and aiming to retire at 55 so the changes have worked well for me. I started investing in property as I didn't want my capital to tied up in a restrictive pension wrapper. The changes shifted my perspective on pensions. I'm aiming to max out my contributions for the next 5 years.

[Granfondo]

98elise said:

Cotty said:

98elise said:

People that want to piss the money away wouldn't save for retirement in the first place. I actually stopped paying into pensions 5 years ago due to their restrictive nature. Now that we have flexibilty I've started putting in as much as I can.

Still too restrictive as to when you can take it, I want to retire at 50

I'm 50 and aiming to retire at 55 so the changes have worked well for me. I started investing in property as I didn't want my capital to tied up in a restrictive pension wrapper. The changes shifted my perspective on pensions. I'm aiming to max out my contributions for the next 5 years.

Even before the new rules if you were a 40% tax payer it was a no brainer!

[Cotty]

Ozzie Osmond said:

I hope you've been doing your ISAs as well then - perfect for "flexible retirement".

I think quite a few people on this Finance forum do both. It's a usefully tax efficient mix-and-match strategy.

I have been paying pension and AVC's on top for 30 years but also ISA, normal and stocks and shares ISA.

I thought they put the retirement age up to 57 but checking I don't think that has come in yet.

[RWD cossie wil]

Simpo Two said:

brickwall said:

Quite. How anyone in that position would not have squirreled away a good chunk of rainy-day money is baffling.

Many seemingly intelligent people use one of the following:

'But I might get run over by a bus tomorrow, haha'
'I don't live to work, I work to live!'*
'You've got to enjoy it while you have it'

• these people are still working

It is a balancing act. Why would you want to live like a hermit saving every penny you have, not doing anything fun, to have a modest income when you are old & decrepid & still can't do anything?

I totally agree you need to plan for the future, but not at the expense of living for today.

[TwigtheWonderkid]

RWD cossie wil said:

It is a balancing act.

I totally agree you need to plan for the future, but not at the expense of living for today.

For the vast majority of people, planning for the future (which has to involve putting money aside in some form) will always be at the expense of living for today. As you said, it's a balancing act.

Most people in the UK don't have excess money to save and do the things they want to do today, so saving will always mean forgoing some form of pleasure now.

[UpTheIron]

Even as a (not powerful) PH style Company Director I struggle with pensions.

I have a reasonably small pension, but I want to retire soon... early 40's. I could avoid some corporation tax by sticking more in a pension now, but I need that money sooner than I'll be able to access a pension fund. A tad frustrating, but my bigger worry issue that the goalposts keep moving.

[Cotty]

RWD cossie wil said:

It is a balancing act. Why would you want to live like a hermit saving every penny you have, not doing anything fun, to have a modest income when you are old & decrepid & still can't do anything?

I totally agree you need to plan for the future, but not at the expense of living for today.

I totally agree that it is a balancing act, but a lot of people put a lot of energy into spending time with family with little expenditure. With the nice weather we are having I can see a lot of BBQ's being fired up. People whatever their wage need to eat, doing it on a BBQ with friends/family round is an enjoyable and inexpensive way to spend the day.

[Craikeybaby]

I find that if the money comes out on payday, either as salary sacrifice or a standing order as soon as it hits my account, I don't miss it.

[Crafty_]

It would obviously take a generation or two, but I think basic personal finance should be taught in schools - compound interest, taxation and the like. A 14/15 year old will be able to understand this stuff, the basics aren't that complicated.

There are many people that just look at what they get in their pay packet every week/month and make their decisions purely based on that. Repaying a loan at £50 over 5 years is better than £75 over 3 years I was once told, "cos its less innit". They hadn't given total cost a thought.

I'm far from an expert on finance matters, just have a cautious/risk adverse nature and can at least understand the simple stuff.

[bayleaf]

Cotty said:

I totally agree that it is a balancing act, but a lot of people put a lot of energy into spending time with family with little expenditure. With the nice weather we are having I can see a lot of BBQ's being fired up. People whatever their wage need to eat, doing it on a BBQ with friends/family round is an enjoyable and inexpensive way to spend the day.

how is having a BBQ cheaper than normal cooking? Also what's that got to do with retiring early and living like a hermit?

[Cotty]

bayleaf said:

how is having a BBQ cheaper than normal cooking? Also what's that got to do with retiring early and living like a hermit?

I didn't say it was cheaper, please quote where I said that.

[All that jazz]

RWD cossie wil said:

It is a balancing act. Why would you want to live like a hermit saving every penny you have, not doing anything fun, to have a modest income when you are old & decrepid & still can't do anything?

I totally agree you need to plan for the future, but not at the expense of living for today.

My Old Dear was a perfect example of the former. Lived very frugally and never bought anything new unless what she wanted couldn't be cobbled together out of some rubbish she had stored somewhere. She became ill towards her retirement and was left pretty much immobile without her scooter. When she died it transpired that she'd stashed a small fortune over the years which basically went to waste because she was too ill to use any of it to go travelling which is what she wanted to do when she retired.

[bogie]

Its always a balancing act, but sooner or later you have to think of the future you want to live in. I have family that claim to be too hard up to afford to save in a pension, then sign themselves up for a new car on the knock. All about lifes priorities I guess