Anyone into cars but not credit?

Anyone into cars but not credit?

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Devil2575

13,400 posts

187 months

Friday 21st October 2016
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DonkeyApple said:
Both are correct views in reality but the nub is whether this 'excess' money is net of the investment in future monthly income in retirement. This is really where the confusion in the UK over 'affordability' arises. Most people will stop earning a salary some time in their 60s but statistically live into their 80s so some form of savings are required to simulate a monthly income. Relying on the improbability of dieing while still in work isn't that smart a move.

There is always much discussion in these threads about what is left after thebmortgage and bills as being free money to spend but you have to include your saving for future income in retirement (if you wish to remain independent) in that calculation before you see the actual amount of remaining money for having fun with.

On PH many will brag about their mortgage or their cars etc but it is rare to see anyone bragging about their pension contributions, which in reality, is the real symbol of wealth. About one in five in the U.K. have no pension and of those who do very few are contributing enough to maintain any form of lifestyle commensurate with their current lifestyle.

If people are investing in their pension properly then any cash left over each month is technically free money to invest in life's pleasures. If people are not but choosing to spend that money on life's luxuries then this is not affordable and they are spending their future income to fuel an artificially inflated lifestyle.
I agree. My employer recently closed it's final salary scheme, or at least froze it. So no new entrants and exisiting members can't make any further contributions but the pension will still track with salaries. When an independant financial advisor went through the new DC scheme we were told that based on the current cost of annuities our total (employer and employee) pension contribution of 22% would be worth about half what a final salary scheme would have paid. In other words smeone who was in the final salary scheme until retirement gets a pension 2/3 of final salary. Someone in the DC scheme putting in 22% of their salary every month for typically 40 years would be able to buy a pension about 1/3 of their final salary. I can't imagine what people who are outting substantially less or even nothing think they're going to do come retirement. Actually I think I know, they aren't going to be retiring.

berlintaxi

8,535 posts

172 months

Friday 21st October 2016
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Audemars said:
People assume they have a job for life or can get a new job till they retire.

I expect most we be sacked between 40-50yrs old and will be unable to find a new job with similar renumeration. Can you folks support yourself for 1 to 2 years with no income?

Also to earn minimum wage in retirement you need a pension pot of around £220k. How many will accumulate £220k? Even a £500k pension pot will be a poor amount to live on.

Of course you can get struck by lighting tomorrow so all the above does not matter.

There is absolutely no reason why a young kid/young adult should be buying a new car on finance given the plentiful £1k cars out there.
Your posts get more ridiculous, an orang-utan bashing the keyboard with a hammer would make more sense.

anonymous-user

53 months

Friday 21st October 2016
quotequote all
Audemars said:
People assume they have a job for life or can get a new job till they retire.

I expect most we be sacked between 40-50yrs old and will be unable to find a new job with similar renumeration. Can you folks support yourself for 1 to 2 years with no income?

Also to earn minimum wage in retirement you need a pension pot of around £220k. How many will accumulate £220k? Even a £500k pension pot will be a poor amount to live on.

Of course you can get struck by lighting tomorrow so all the above does not matter.

There is absolutely no reason why a young kid/young adult should be buying a new car on finance given the plentiful £1k cars out there.
Can you please stop being such a weapons grade bell end ?

Your sheer trollishness aside you do make me consider that in addition to PH Driving God and PH Powerfully Built Director we probably need to coin a new sobriquet of PH Self Appointed IFA. They always seem to swarm around these posts wittering on about Pensions whenever anybody dares admit to having ever used a consumer credit product. It's simply not that binary, use of credit does not de facto imply financial recklessness, impending taxpayer funded Armageddon and no thought for one's future. I wish that some of the fiscally verbose high horse merchants could cut people a bit of slack and accept that life is about choices, about life stages, priorities and variety. And that latter point re variety applies to future financial planning because there are more ways to build a prosperous future than simply chucking money into a pension pot, not of course that there's anything wrong with that if that's your preference.

I imagine of course that they are all PH Warren Buffetts.



Edited by anonymous-user on Friday 21st October 13:40


Edited by anonymous-user on Friday 21st October 13:42

SWoll

18,207 posts

257 months

Friday 21st October 2016
quotequote all
DonkeyApple said:
So my interest in these types of threads is always what someone means by 'afford the monthly cost' as I don't think this is technically correct in reality. And if we are facing what seems to be a looming issue of more and more people being retired before they have enough to self finance their existence then everyone else is going to be picking up the tab which is where I suspect a lot of concern from others lies rather than people actually being envious of someone having a newer car?
I can't agree there. I'm pretty sure the vast majority comment out of envy rather than some concern regarding the future of the welfare state.

pti

1,694 posts

143 months

Friday 21st October 2016
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walm said:
Audemars said:
People assume they have a job for life or can get a new job till they retire.

I expect most we be sacked between 40-50yrs old and will be unable to find a new job with similar renumeration. Can you folks support yourself for 1 to 2 years with no income?

Also to earn minimum wage in retirement you need a pension pot of around £220k. How many will accumulate £220k? Even a £500k pension pot will be a poor amount to live on.

Of course you can get struck by lighting tomorrow so all the above does not matter.

There is absolutely no reason why a young kid/young adult should be buying a new car on finance given the plentiful £1k cars out there.
Reported.





(For being a gargantuan douche.)
laugh

SWoll

18,207 posts

257 months

Friday 21st October 2016
quotequote all
Audemars said:
People assume they have a job for life or can get a new job till they retire.

I expect most we be sacked between 40-50yrs old and will be unable to find a new job with similar renumeration. Can you folks support yourself for 1 to 2 years with no income?

Also to earn minimum wage in retirement you need a pension pot of around £220k. How many will accumulate £220k? Even a £500k pension pot will be a poor amount to live on.

Of course you can get struck by lighting tomorrow so all the above does not matter.

There is absolutely no reason why a young kid/young adult should be buying a new car on finance given the plentiful £1k cars out there.
Another classic. You really do need your own thread where you can keep all of your pearls of wisdom in one place for the benefit of the rest of us.


DonkeyApple

54,932 posts

168 months

Friday 21st October 2016
quotequote all
SWoll said:
I can't agree there. I'm pretty sure the vast majority comment out of envy rather than some concern regarding the future of the welfare state.
Maybe. It doesn't seem logical to me as I would have though most people could gear up to almost any conventional car if they wanted it that much?

ChasW

2,135 posts

201 months

Friday 21st October 2016
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I worry that there will be social unrest starting in 10-15 years time when the chickens come to roost as the first phase of underprovisioned workers have to retire into near poverty. The state pension age will creep towards 70 and older employees, in their 50s, will be let go even earlier than they are now as cheaper younger workers are promoted into their roles. I guess many will be hedging against this with planned property downsizing.

sparks_E39

12,738 posts

212 months

Friday 21st October 2016
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£500k a poor pension? Ridiculous.

Audemars

507 posts

97 months

Friday 21st October 2016
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People think that if they earn £1k per month and their current bills are £400pm then they can afford £600pm on spending on various things. WRONG.

Yes most people will experience redundancy in their lifetime especially between 40 - 50yrs of age when they can be replaced by cheaper more enthusiastic juniors.

Given current cost of living (including house prices) its shocking what people spend their money on. Yes given the current state, future pensioners with be on benefits, freezing to death in their sheds.

Still at least they can tell their grandkids of their good times driving around in a new BMVee and OOODI.

anonymous-user

53 months

Friday 21st October 2016
quotequote all
ChasW said:
I worry that there will be social unrest starting in 10-15 years time when the chickens come to roost as the first phase of underprovisioned workers have to retire into near poverty. The state pension age will creep towards 70 and older employees, in their 50s, will be let go even earlier than they are now as cheaper younger workers are promoted into their roles. I guess many will be hedging against this with planned property downsizing.
From PCP to pitchforks ?

SWoll

18,207 posts

257 months

Friday 21st October 2016
quotequote all
DonkeyApple said:
SWoll said:
I can't agree there. I'm pretty sure the vast majority comment out of envy rather than some concern regarding the future of the welfare state.
Maybe. It doesn't seem logical to me as I would have though most people could gear up to almost any conventional car if they wanted it that much?
I sense the bubble you live in is rather larger than Audemars, but it's still there never the less.

DonkeyApple

54,932 posts

168 months

Friday 21st October 2016
quotequote all
sparks_E39 said:
£500k a poor pension? Ridiculous.
I think it's about maintaining relative standards of living. So to many that sum seems ludicrously high while someone else may realise that it simply isn't enough to maintain the same standard of living during their working years.

Very crudely you probably need about half of your average later career salary in order to maintain the same sort of standard of living. So if you've been living on £50k a year you'll need about £25k a year income in retirement. To calculate what size your pension pot needs to be to generate that then the crude rule of thumb is to multiply that retirement income number by 20. And there you are at needing £500k. And don't forget that every year you'll be technically earning less as inflation erodes the value of your income.

The media generally references that to match minimum wage you need a pot greater than £250k.


DonkeyApple

54,932 posts

168 months

Friday 21st October 2016
quotequote all
SWoll said:
DonkeyApple said:
SWoll said:
I can't agree there. I'm pretty sure the vast majority comment out of envy rather than some concern regarding the future of the welfare state.
Maybe. It doesn't seem logical to me as I would have though most people could gear up to almost any conventional car if they wanted it that much?
I sense the bubble you live in is rather larger than Audemars, but it's still there never the less.
Maybe. We all live in bubbles of differing natures in reality. I just would have thought that as most of the lease threads centre around numbers in the area of £3-400/month that most people commenting could find that money if they really wanted the same car as someone else even if it meant living on bakebeans (pity the next owner of that car though!).

SWoll

18,207 posts

257 months

Friday 21st October 2016
quotequote all
DonkeyApple said:
SWoll said:
DonkeyApple said:
SWoll said:
I can't agree there. I'm pretty sure the vast majority comment out of envy rather than some concern regarding the future of the welfare state.
Maybe. It doesn't seem logical to me as I would have though most people could gear up to almost any conventional car if they wanted it that much?
I sense the bubble you live in is rather larger than Audemars, but it's still there never the less.
Maybe. We all live in bubbles of differing natures in reality. I just would have thought that as most of the lease threads centre around numbers in the area of £3-400/month that most people commenting could find that money if they really wanted the same car as someone else even if it meant living on bakebeans (pity the next owner of that car though!).
If you have a look at the average Uk salary, average mortgage payment and then factor in additional bills for CT, childcare etc then £3-400 a month is a very significant sum to many people. Then take in the natural PH demographic into account and I'd suggest it becomes even more significant.

Devil2575

13,400 posts

187 months

Friday 21st October 2016
quotequote all
Audemars said:
I expect most we be sacked between 40-50yrs old and will be unable to find a new job with similar renumeration.
And this is based on what exactly? The massed ranks of 40-50 year olds being sacked at the moment?

walm

10,609 posts

201 months

Friday 21st October 2016
quotequote all
DonkeyApple said:
To calculate what size your pension pot needs to be to generate that then the crude rule of thumb is to multiply that retirement income number by 20.
More like 25 these days. frown

Devil2575

13,400 posts

187 months

Friday 21st October 2016
quotequote all
SWoll said:
If you have a look at the average Uk salary, average mortgage payment and then factor in additional bills for CT, childcare etc then £3-400 a month is a very significant sum to many people. Then take in the natural PH demographic into account and I'd suggest it becomes even more significant.
And what exactly is the typical PH demographic?

Also you're missing a big factor here, the fact that many households have two incomes.

wormus

14,509 posts

202 months

Friday 21st October 2016
quotequote all
SWoll said:
If you have a look at the average Uk salary, average mortgage payment and then factor in additional bills for CT, childcare etc then £3-400 a month is a very significant sum to many people. Then take in the natural PH demographic into account and I'd suggest it becomes even more significant.
I too would be interested to learn what the natural PH demographic looks like. For many of us, £3-400/month wouldn't be enough to maintain a decent cellar.

SWoll

18,207 posts

257 months

Friday 21st October 2016
quotequote all
Devil2575 said:
SWoll said:
If you have a look at the average Uk salary, average mortgage payment and then factor in additional bills for CT, childcare etc then £3-400 a month is a very significant sum to many people. Then take in the natural PH demographic into account and I'd suggest it becomes even more significant.
And what exactly is the typical PH demographic?

Also you're missing a big factor here, the fact that many households have two incomes.
Average household income is still < £50k a year before tax, so maybe an income of £3k a month after tax? You can easily lose half of that with an average mortgage, council tax and various utility and other bills. Then add living costs for a family of 4, childcare etc. and I'd be surprised if much more than £500 a month is left? Spending the vast majority of that on a car is a significant outgoing I would have thought. I know that when I was on that kind of salary and my wife was at home looking after the kids for a few years when they were younger that was the case anyway.

When I say the PH demographic I'm suggesting that it will be swayed more towards the lower to average range of income purely due to the type of topics discussed and range of views I've seen over the years. That's not in any way meant in a derogatory fashion, just based on the observations of someone who has been a member for many years. I could well be wrong of course.


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