Is anyone else not bothering with pension planning?
Discussion
mangos said:
raceboy said:
The north/south divide really is scary.
My current house (4 bed detached in a nice enough area...and not what I consider that far 'up North') costs us £1k a month to run....including £450ish for the mortgage and food for 3 people.
Council tax...£150 a month
Gas AND Electricity £67 a month
House insurance Not much more than £100 a YEAR
Back to the original issue....I have very little in the way of pension planning, a few old company schemes that will have peanuts in them and no other plans.
Part of it is pure head in the sand....worry about it when it arrives...hopefully about 20 years time, part of it is in the live for now approach.
But with a little luck and having very little debt old age doesn't have to cost a fortune, the only slightly hairbrain 'plan' we have is to move somewhere even cheaper to live at retirement age, along the lines of the Marigold Hotel idea
I live in the South East, desirable commuter town and although my mortgage is higher than yours, all the rest are about the same.My current house (4 bed detached in a nice enough area...and not what I consider that far 'up North') costs us £1k a month to run....including £450ish for the mortgage and food for 3 people.
Council tax...£150 a month
Gas AND Electricity £67 a month
House insurance Not much more than £100 a YEAR
Back to the original issue....I have very little in the way of pension planning, a few old company schemes that will have peanuts in them and no other plans.
Part of it is pure head in the sand....worry about it when it arrives...hopefully about 20 years time, part of it is in the live for now approach.
But with a little luck and having very little debt old age doesn't have to cost a fortune, the only slightly hairbrain 'plan' we have is to move somewhere even cheaper to live at retirement age, along the lines of the Marigold Hotel idea
Mortgage - £850 a month
Council Tax - £135 a month
House insurance - £100 a year
Food - £350 a month
Gas and electricity £100 a month
TV License - £12 a month
Broadband - £14 a month
So really, once mortgage is paid off we shouldnt need much more than £750 a month as a minimum, and then allowance on top for treats or if we are still running a car.
Car insurance will probably have gone up by then...
Unless you're only insuring rings out of Xmas crackers?
drainbrain said:
Right now a person with nothing except the state pension can get housing benefit, other benefits, and a bit over £150 a week to live on.
Many do. I could. What's the problem?
In 20 years time there will more pensioners and fewer workers. Just to maintain the current level of state spending per pensioner the burden on those workers is going to rise dramatically. Are you confident they'll be prepared to shoulder it? And is it fair of you to expect them to?Many do. I could. What's the problem?
I think it's wise to take advantage of any and all tax reductions available for pension purposes. I can put £40k a year into a pension if I wish, tax free. That fund will grow, depending on where I put it, and from 55 I can take money out of it, again tax free up to the threshold of £10k pa (or whatever it is), which means that I will effectively get my money at a very reduced rate of tax.
drainbrain said:
Right now a person with nothing except the state pension can get housing benefit, other benefits, and a bit over £150 a week to live on.
Many do. I could. What's the problem?
None. If you are at the bottom end of society then in this regard you have no worries and no needs. Arguably, your retirement may even be more cash rich than your working life. Many do. I could. What's the problem?
I believe that in all these discussions people are generally referring to wishing to continue to maintain a lifestyle several stages above the social baseline where the State keeps you.
The key in current society is that those (people well above the breadline) who will be able to maintain their standard of living post becoming unemployable (few people will choose to retire and be forcibly 'retired' long before they currently expect) are the absolute minority. If the generation that had the greatest ability to accumulate wealth and the largest pension contributions in history are finding it a struggle to maintain a constant quality of life then arguably the later generations are going to be finding this in far greater numbers.
But, as I mentioned above, the real risk for those wishing to remain in their current socio economic group they face the added cost that whatever guide their 'pension' is in, whether it is property, a pension wrapper or something else) they not only have to save to pay for their own income once employers drop them but they're going to have to pay for all those who didn't prepare for the future. Which is nice.
ATG said:
drainbrain said:
Right now a person with nothing except the state pension can get housing benefit, other benefits, and a bit over £150 a week to live on.
Many do. I could. What's the problem?
In 20 years time there will more pensioners and fewer workers. Just to maintain the current level of state spending per pensioner the burden on those workers is going to rise dramatically. Are you confident they'll be prepared to shoulder it? And is it fair of you to expect them to?Many do. I could. What's the problem?
There's a saying you may have heard which is "sufficient unto the day is the evil thereof". I'd go with that as a sensible approach, and concentrate on the issues that are now rather than the issues that might be if there's a tomorrow.
Your last point is interesting. "is it fair...." Unfortunately it depends on what you mean by 'fair'. Do I believe it's fair to OBLIGATE the younger members of the tribe to look after the incapable elderly? Yes as it happens I do. However I don't think it's reasonable to expect everyone to share that opinion. Obviously there are many cultures where the incapable elderly are looked after by their families as a matter of course. Ours happens not to be one, and this may be something that has to change as it's one of the many solutions to old age survival.
drainbrain said:
ATG said:
drainbrain said:
Right now a person with nothing except the state pension can get housing benefit, other benefits, and a bit over £150 a week to live on.
Many do. I could. What's the problem?
In 20 years time there will more pensioners and fewer workers. Just to maintain the current level of state spending per pensioner the burden on those workers is going to rise dramatically. Are you confident they'll be prepared to shoulder it? And is it fair of you to expect them to?Many do. I could. What's the problem?
There's a saying you may have heard which is "sufficient unto the day is the evil thereof". I'd go with that as a sensible approach, and concentrate on the issues that are now rather than the issues that might be if there's a tomorrow.
Your last point is interesting. "is it fair...." Unfortunately it depends on what you mean by 'fair'. Do I believe it's fair to OBLIGATE the younger members of the tribe to look after the incapable elderly? Yes as it happens I do. However I don't think it's reasonable to expect everyone to share that opinion. Obviously there are many cultures where the incapable elderly are looked after by their families as a matter of course. Ours happens not to be one, and this may be something that has to change as it's one of the many solutions to old age survival.
And, yes, there is a social obligation to look after people who can't look after themselves. But those of us looking to retire 20 years from now CAN try to look after ourselves if we CHOOSE to by saving for our retirement now. I'd say that was a clear moral duty. Accumulating a load of nice holiday snaps or whatever now on the assumption that some other bugger will pay to have me fed and housed in my old age seems a little unfair.
drainbrain said:
Neither you nor anyone else has any idea what will or won't be in 20 years time. Nor what solutions will have evolved to deal with evolving problems, nor even if there will be any problem requiring solution at all. The opinion you quoted starts "Right now" and asks what the "right now" problem is or even if there is a problem at all?
There's a saying you may have heard which is "sufficient unto the day is the evil thereof". I'd go with that as a sensible approach, and concentrate on the issues that are now rather than the issues that might be if there's a tomorrow.
That seems to be anything but a 'sensible approach' simply relying on 'someone else' to sort out the problem.There's a saying you may have heard which is "sufficient unto the day is the evil thereof". I'd go with that as a sensible approach, and concentrate on the issues that are now rather than the issues that might be if there's a tomorrow.
The only rationale and sensible approach is to try and make provision for your retirement as best you can, as early as you can.
ATG said:
You can look at the age distribution of the current population and have a pretty good idea how the worker/retired ratio is going to look in 20 years time, because both groups are already alive. Even if people started dropping sprogs as quickly as possible tomorrow, those sprogs won't be joining the workforce for 20 years.
And, yes, there is a social obligation to look after people who can't look after themselves. But those of us looking to retire 20 years from now CAN try to look after ourselves if we CHOOSE to by saving for our retirement now. I'd say that was a clear moral duty. Accumulating a load of nice holiday snaps or whatever now on the assumption that some other bugger will pay to have me fed and housed in my old age seems a little unfair.
So what we can predict with some certainty is that there will be less workers and more retired people in 20 years. But we can't predict what solutions will have evolved to prevent this becoming a problem, can we? And it's only going to be a problem if no solutions are found, isn't it? And since the dawn of time there aren't really very many problems the human race has encountered that solutions haven't been found to address, are there? And, yes, there is a social obligation to look after people who can't look after themselves. But those of us looking to retire 20 years from now CAN try to look after ourselves if we CHOOSE to by saving for our retirement now. I'd say that was a clear moral duty. Accumulating a load of nice holiday snaps or whatever now on the assumption that some other bugger will pay to have me fed and housed in my old age seems a little unfair.
As someone said above there really isn't a problem right now for the poor people. I assume he means the millions upon millions who live pretty well hand to mouth and neither have nor ever will have any savings at all. They're fine.
Obviously the rich people are fine. They've found the solution to living well in old age. Have to say, I don't think many of them have solved it by saving in tax-wrappers but, no matter, they've not got a problem.
So the problem's about the poor old middle class. How to perpetuate the lifestyle they became accustomed to during the career they can no longer pursue.
Well, they're a funny old tribe the middle class. But how they fund their old age is up to them. If they don't do something they'll probably end up surviving like the poor do. But they like keeping their financial affairs close to the chest. And they're generally firm believers in 'every man for himself'. So, my opinion is ...who cares what they do or don't do? If they want to live a whole life believing in future rather than instant gratification that is entirely up to them.
Personally I couldn't advocate living life like a rehearsal because in my experience that's back to pretending you know what tomorrow's going to be like. Which you don't.
Two things that will almost certainly change. One is that more older people will work in some capacity. This has started already. And the other is that state pensions and other benefits will all become means tested. Which is probably the first thing that'll happen when too much moaning about pensions starts.
But one thing won't change. People won't ever feel any empathy for the plight of the middle class trying to maintain post career lifestyles. Most of their lives are an illusion anyway. So they may as well wait until old age is upon them to discover why it never really needed much funding in the first place.
sidicks said:
The only rationale and sensible approach is to try and make provision for your retirement as best you can, as early as you can.
That's not true though, is it? The truly rich are sorted, and the poor are sorted. But the middle classes are gambling - if they don't accumulate enough to join the rich before retirement they could scrimp all their lives just to be means tested into joining the poor anyway. Spin that wheel.
oyster said:
How is house insurance so cheap???
Unless you're only insuring rings out of Xmas crackers?
I paid £135 with Nationwide last year. 2-bed semi, Farnborough, standard £50k contents, no valuables listed, and I think I got cashback on top of that. It's likely that replacing all my contents new would cost more than this though (even though all items are of relatively low value, there is a lot), I should really go around taking photos...Unless you're only insuring rings out of Xmas crackers?
grumbledoak said:
sidicks said:
The only rationale and sensible approach is to try and make provision for your retirement as best you can, as early as you can.
That's not true though, is it? The truly rich are sorted, and the poor are sorted. But the middle classes are gambling - if they don't accumulate enough to join the rich before retirement they could scrimp all their lives just to be means tested into joining the poor anyway. Spin that wheel.
Unfortunately that's where my crystal ball sees a helluva lot of people ending up by taking current advice to save in pension plans, especially this crazy new workplace pension which as everybody well knows isn't going to be worth diddly squat for the vast majority.
drainbrain said:
So what we can predict with some certainty is that there will be less workers and more retired people in 20 years. But we can't predict what solutions will have evolved to prevent this becoming a problem, can we? And it's only going to be a problem if no solutions are found, isn't it? And since the dawn of time there aren't really very many problems the human race has encountered that solutions haven't been found to address, are there?
To my mind, it doesn't seem a viable strategy to do nothing and just assume that someone else will come up with a solution that somehow creates lost of money out of nothing!drainbrain said:
As someone said above there really isn't a problem right now for the poor people. I assume he means the millions upon millions who live pretty well hand to mouth and neither have nor ever will have any savings at all. They're fine.
Obviously the rich people are fine. They've found the solution to living well in old age. Have to say, I don't think many of them have solved it by saving in tax-wrappers but, no matter, they've not got a problem.
So the problem's about the poor old middle class. How to perpetuate the lifestyle they became accustomed to during the career they can no longer pursue.
Well, they're a funny old tribe the middle class. But how they fund their old age is up to them. If they don't do something they'll probably end up surviving like the poor do. But they like keeping their financial affairs close to the chest. And they're generally firm believers in 'every man for himself'. So, my opinion is ...who cares what they do or don't do? [b]If they want to live a whole life believing in future rather than instant gratification that is entirely up to them. ['b]
Personally I couldn't advocate living life like a rehearsal because in my experience that's back to pretending you know what tomorrow's going to be like. Which you don't.
I don't think anyone is suggesting not enjoying the present and saving everything for the future - I'm certainly not! But there is a balance and making no provision for the future because it is 'unknown' doesn't seem very viable to me.Obviously the rich people are fine. They've found the solution to living well in old age. Have to say, I don't think many of them have solved it by saving in tax-wrappers but, no matter, they've not got a problem.
So the problem's about the poor old middle class. How to perpetuate the lifestyle they became accustomed to during the career they can no longer pursue.
Well, they're a funny old tribe the middle class. But how they fund their old age is up to them. If they don't do something they'll probably end up surviving like the poor do. But they like keeping their financial affairs close to the chest. And they're generally firm believers in 'every man for himself'. So, my opinion is ...who cares what they do or don't do? [b]If they want to live a whole life believing in future rather than instant gratification that is entirely up to them. ['b]
Personally I couldn't advocate living life like a rehearsal because in my experience that's back to pretending you know what tomorrow's going to be like. Which you don't.
drainbrain said:
Two things that will almost certainly change. One is that more older people will work in some capacity. This has started already. And the other is that state pensions and other benefits will all become means tested. Which is probably the first thing that'll happen when too much moaning about pensions starts.
Those who are able to may well work in some way, but this isn't viable for everyone and im clear where all these extra jobs are suddenly going to be found from?If, as is likely, state support will reduce, it's even more important that people start making their own provision sooner rather than later!
drainbrain said:
But one thing won't change. People won't ever feel any empathy for the plight of the middle class trying to maintain post career lifestyles. Most of their lives are an illusion anyway. So they may as well wait until old age is upon them to discover why it never really needed much funding in the first place.
Enjoying yourself in retirement will certainly require funding, unless you plan to stop all holidays etc when you hit age 65...drainbrain said:
Can I just add to that....the worst possible position to be in is to have a small or smallish pension. Those people will be means-tested out of benefits, and, like the low-waged, will find themselves worse off than those who don't have a small(ish) pension.
Unfortunately that's where my crystal ball sees a helluva lot of people ending up by taking current advice to save in pension plans, especially this crazy new workplace pension which as everybody well knows isn't going to be worth diddly squat for the vast majority.
Ain't that the truth.... of course the government wouldn't have thought that through when setting up workplace pensions..... would they??Unfortunately that's where my crystal ball sees a helluva lot of people ending up by taking current advice to save in pension plans, especially this crazy new workplace pension which as everybody well knows isn't going to be worth diddly squat for the vast majority.
drainbrain said:
Can I just add to that....the worst possible position to be in is to have a small or smallish pension. Those people will be means-tested out of benefits, and, like the low-waged, will find themselves worse off than those who don't have a small(ish) pension.
Means testing won't mean you are worse off than someone with no pension, just that you might not be much better off.drainbrain said:
Unfortunately that's where my crystal ball sees a helluva lot of people ending up by taking current advice to save in pension plans, especially this crazy new workplace pension which as everybody well knows isn't going to be worth diddly squat for the vast majority.
Given that most people are paying less than 'diddly squat' into these pensions, they aren't giving up much in the way of current consumption anyway!drainbrain said:
So what we can predict with some certainty is that there will be less workers and more retired people in 20 years. But we can't predict what solutions will have evolved to prevent this becoming a problem, can we? And it's only going to be a problem if no solutions are found, isn't it? And since the dawn of time there aren't really very many problems the human race has encountered that solutions haven't been found to address, are there?
As someone said above there really isn't a problem right now for the poor people. I assume he means the millions upon millions who live pretty well hand to mouth and neither have nor ever will have any savings at all. They're fine.
Obviously the rich people are fine. They've found the solution to living well in old age. Have to say, I don't think many of them have solved it by saving in tax-wrappers but, no matter, they've not got a problem.
So the problem's about the poor old middle class. How to perpetuate the lifestyle they became accustomed to during the career they can no longer pursue.
Well, they're a funny old tribe the middle class. But how they fund their old age is up to them. If they don't do something they'll probably end up surviving like the poor do. But they like keeping their financial affairs close to the chest. And they're generally firm believers in 'every man for himself'. So, my opinion is ...who cares what they do or don't do? If they want to live a whole life believing in future rather than instant gratification that is entirely up to them.
Personally I couldn't advocate living life like a rehearsal because in my experience that's back to pretending you know what tomorrow's going to be like. Which you don't.
Two things that will almost certainly change. One is that more older people will work in some capacity. This has started already. And the other is that state pensions and other benefits will all become means tested. Which is probably the first thing that'll happen when too much moaning about pensions starts.
But one thing won't change. People won't ever feel any empathy for the plight of the middle class trying to maintain post career lifestyles. Most of their lives are an illusion anyway. So they may as well wait until old age is upon them to discover why it never really needed much funding in the first place.
To summarise, "maybe the magic money tree will bear fruit, and fAs someone said above there really isn't a problem right now for the poor people. I assume he means the millions upon millions who live pretty well hand to mouth and neither have nor ever will have any savings at all. They're fine.
Obviously the rich people are fine. They've found the solution to living well in old age. Have to say, I don't think many of them have solved it by saving in tax-wrappers but, no matter, they've not got a problem.
So the problem's about the poor old middle class. How to perpetuate the lifestyle they became accustomed to during the career they can no longer pursue.
Well, they're a funny old tribe the middle class. But how they fund their old age is up to them. If they don't do something they'll probably end up surviving like the poor do. But they like keeping their financial affairs close to the chest. And they're generally firm believers in 'every man for himself'. So, my opinion is ...who cares what they do or don't do? If they want to live a whole life believing in future rather than instant gratification that is entirely up to them.
Personally I couldn't advocate living life like a rehearsal because in my experience that's back to pretending you know what tomorrow's going to be like. Which you don't.
Two things that will almost certainly change. One is that more older people will work in some capacity. This has started already. And the other is that state pensions and other benefits will all become means tested. Which is probably the first thing that'll happen when too much moaning about pensions starts.
But one thing won't change. People won't ever feel any empathy for the plight of the middle class trying to maintain post career lifestyles. Most of their lives are an illusion anyway. So they may as well wait until old age is upon them to discover why it never really needed much funding in the first place.
k the middle classes either way". Righto.the middle class is a very large group who tend to pay into pensions and support the rest of society by paying taxes etc therefore financing the rest of society via benefits free nhs care etc
when middle class get fed up with government changing pensions isas etc and do not pay into pensio this creates huge problem in where will government find the money to pay for benefits free nhs care etc
when middle class get fed up with government changing pensions isas etc and do not pay into pensio this creates huge problem in where will government find the money to pay for benefits free nhs care etc
DonkeyApple said:
The term middle class is misleading as it bring hate into the discussion.
It's anyone who isn't already subsisting on the State.
I don't see anything pejorative about the term. Nonetheless......It's anyone who isn't already subsisting on the State.
I'd call people who subsist or partly survive on benefits (apart from Child Benefit) the financial underclass.
The next category - people who need to spend everything they earn on basic bills right up to people who can only save at all by living austerely - the financial lower class.
I think there are millions of people in those two categories who will never achieve meaningful savings no matter how loudly they are shouted at.
What's meaningful? Well there's been talk of living on £1kpm. On top of the state pension that'd currently require a pot of about £100k to produce an extra £4kpa. And I really don't think £1kpm is much better than poverty line living. And I really don't think many of my 'financial lower class' will get close to that.
A £250k pot producing £10kpa plus state pension minus a bit of income tax is probably the beginning of the end of living on the poverty line.
And if that's the case, here's the reality of matters:
http://www.thisismoney.co.uk/money/pensions/articl...
Oh dear!
So people who DID bother contributing to pensions didn't on average create a fund which would , including the state pension, even take them to £1kpm.
Getting to a £250k pot (and edging out of poverty) would require 3 times the UK average. Dreamland in other words.
My conclusion? Pension savings and especially all their tax benefits are for people who can afford to fund them with large contributions.
But for poor people - the financial working and even lower middle class? Next door to a waste of time and certainly not worth living in even greater austerity than you already have to do.
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