I'm 42, No pension, will I die in a puddle of my own S#it

[Olivera]

Steffan said:

JensenA said:

Just enjoy life - Drink and smoke more, eat all the food you enjoy, go on holidays. And when the mortgage is paid off you'll have more money to pay for drugs and wes, you can buy a nice flash car to drive around in on the few occasions when you're sober. If you slip up and manage to live beyond 60, don't worry, sell the house off and have a decadent few years in Thailand, marry a young Thai girl, live a life of bliss, have a heart attack in a moment of frenzied passion and die with a smile on your face, and if it all goes wrong and you are still alive, don't worry, come back to the UK, and because you are pennyless, you'll be given a nice little warm flat, rent and council tax paid, no medical fees, free transport, and you can relax and look back on what a wonderful life you've lived instead of worrying about how long your pension will last, and struggling to to pay the gas, electric, and council tax. You know it makes sense

I regret to say there is much truth in this.

There is a fundamental problem in the UK with the benefits system supporting reckless behaviour. It has moved from assessing need to subsidising want.

It is a fact that the UK system does not distinguish between a life ruined by gross debauchery and waste, and the individual born with a disability.

If this continues as it is our country can only degenerate.

Couldn't agree more.

[shirt]

i was lucky to start my career in a final salary scheme with the company putting matching our own contribution. 20-25% of my annual salary went in for 7yrs until i quit.

currently have no pension other than that, but also don't pay any taxes and the rental income on my uk property is in excess of the mortgage.

plan is to buy another 2-3houses in the next 5-6years, with one of these perhaps being somewhere i want to live in future [none will be in the uk!]. someone else can pay the mortgage until that point, and the others will be sold when i want to retire.

[EINSIGN]

Is it worth paying off more capital on a mortgage repayment, or keep paying into a pension fund, ie will the property become worth more long term than the pension fund in say 15 years time? especially whilst interest rates are so low.

[Steffan]

mph1977 said:

JQ said:

The one thing that worries me about this thread is the number of people who consider paying their mortgage off a savings plan. Is everyone intending to sell up and move into a bedsit when they retire?

no but perhaps moving from a 3/4/ 5 bed family home into a 2 bedroom house / bungalow

I think many people have realised that by paying off their mortgage they control their accommodation. I think there is increasing distrust of Pensions and Banks generally for saving. Or indeed any form of security.

People want a tangible asset they control and they own. By combining that with living in the house the individual has the best chance of determining their own financial security.

I think this will attitude will grow as the Bank continue to lose money, status and credibility. The next banking bail out is just around the corner.

There will be increasing resistance to Pensions which rely upon financial institutions. Hardly surprising in view of the extent of the impropriety that has been allowed to reduce our financial institutions to empty shells.

Edited by Steffan on Saturday 12th November 23:08

[JQ]

mph1977 said:

JQ said:

The one thing that worries me about this thread is the number of people who consider paying their mortgage off a savings plan. Is everyone intending to sell up and move into a bedsit when they retire?

no but perhaps moving from a 3/4/ 5 bed family home into a 2 bedroom house / bungalow

Making that change may be more difficult than expected when the time comes for many. My father has been retired a number of years and lives in a 5 bed detached in a very nice area, nice 2/3 bed flats in the same area are not that much cheaper than the value of his house for exactly this reason. So it may not just be a question of downsizing when the move comes.

Certainly where I live 2 bed bungalows are of similar value to 3/4 bed semi's.

I don't disagree that investing in property is a very good idea, but gambling your retirement based on downsizing and potentially moving out of the area you've lived in for the last 40 years is not something I'll be doing. Once the house is paid off it just means my cost of living will reduce and will probably fund the kids though uni. If you want to retire off the back of property invest in a buy to let.

I'm no investment genius, but I suspect a whole generation of people expecting to retire off the back of property downsizing may actually have an influence on the market - not a good one.

[Ozzie Osmond]

EINSIGN said:

Is it worth paying off more capital on a mortgage repayment, or keep paying into a pension fund, ie will the property become worth more long term than the pension fund in say 15 years time? especially whilst interest rates are so low.

What's the interest rate on your mortgage? And what top rate of income tax are you paying?

Unless the interest rate is very low (e.g. a base rate tracker) or you are a 40% taxpayer then it's probably best to deal with the mortgage first. Depends on many things though and there's no magic answer.

If you want a decent pension, the rough rule of thumb is when you start the pension savings the contributions each year need to be a percentage of your earnings which is equal to half your age,

• 25 years old when you start saving - 12.5% contributions
• 40 years old when you start saving - 20% contributions
• 50 years old when you start saving - 25% contributions

Don't forget an ISA also allows tax-efficient saving over the long term and without having to tie up your money for ever.

[sidicks]

Ozzie Osmond said:

If you want a decent pension, the rough rule of thumb is when you start the pension savings the contributions each year need to be a percentage of your earnings which is equal to half your age,

• 25 years old when you start saving - 12.5% contributions
• 40 years old when you start saving - 20% contributions
• 50 years old when you start saving - 25% contributions

Don't forget an ISA also allows tax-efficient saving over the long term and without having to tie up your money for ever.

Given that a typical (public sector) final salary costs around 35% p.a. (40 year, 1/60ths accrual at age 65, inflation linked) then to get something approaching half of your salary at retirement you would need to be paying the same percentage of your earnings as your age (not half age!!), unless you were extemely lucky with your investments!!

Sidicks

Edited by sidicks on Sunday 13th November 01:32

[HoHoHo]

With regards to paying off the mortgage, I think the problem here is every situation is different.

I'm overpaying my mortgage not by a few pounds, or even a few hundreds per month but by a significant amount each month (I'm not going into exact figures, but you get the idea). Once I'm 50, the house will be paid off and the massive amount I pay each month currently in mortgage payment will then be directed into savings of some description whihc will offer a significantly better return than the .23% above base my mortgage is currently costing.

So after a further 10 years of work, hopefully I will have some £100000's tucked away - plus commercial property paid for, plus a house paid for.

Equally, I could get run over by a bus tomorrow and regret not havng bought that 997 Turbo

[croyde]

Why is it always a bus?

[HoHoHo]

croyde said:

Why is it always a bus?

Don't know really - don't even have a bus that passes our gaff!

How about....

Could be crushed by a bit of frozen toilet waste falling from a plane landing at Gatwick up the road?

[croyde]

[Slyjoe]

HoHoHo said:

Alternatively, I could get run over by a 997 Turbo tomorrow and regret not havng bought that bus

[Globs]

JQ said:

I don't disagree that investing in property is a very good idea, but gambling your retirement based on downsizing and potentially moving out of the area you've lived in for the last 40 years is not something I'll be doing.

In the last two decades the biggest gamble has been paying into a pension scheme.
Unless you are public sector you really have to make your own plans, plans not involving the pensions industry.

[HoHoHo]

Globs said:

Unless you are public sector you really have to make your own plans, plans not involving the pensions industry.

Property.

You then have rental income and be an asset should you need or want to sell at some stage.

[JQ]

Globs said:

JQ said:

I don't disagree that investing in property is a very good idea, but gambling your retirement based on downsizing and potentially moving out of the area you've lived in for the last 40 years is not something I'll be doing.

In the last two decades the biggest gamble has been paying into a pension scheme.
Unless you are public sector you really have to make your own plans, plans not involving the pensions industry.

At what point did I mention pensions?

I don't disagree with your comment, but we all have to live somewhere and I'm just stating that I consider relying on your own home to provide you with enough income for potentially 30yrs is rather shortsighted. It does appear that more and more people plan to do just this and may be in for a shock, similar to those who've paid into private pensions.

[fandango_c]

JQ said:

At what point did I mention pensions?

I don't disagree with your comment, but we all have to live somewhere and I'm just stating that I consider relying on your own home to provide you with enough income for potentially 30yrs is rather shortsighted. It does appear that more and more people plan to do just this and may be in for a shock, similar to those who've paid into private pensions.

How do you think one should provide for one's retirement then?

[markcoznottz]

HoHoHo said:

Globs said:

Unless you are public sector you really have to make your own plans, plans not involving the pensions industry.

Property.

You then have rental income and be an asset should you need or want to sell at some stage.

The political class all have property portfolios. That means they have a vested interest in restricting building new houses and keeping the bubble inflated. Look at what they do not what they say. As mark twain said, 'buy land they arent making it anymore'.

My top tip would be bungalows. They will never build anymore bungalows again,
so theres a limited supply. I helped my auntie sell her 1930s two bed bungalow, within 3 hours of it being on ebay someone from the council had come round and approved a sale, apparantly they fit them out for people on the housing waiting list who need wheelchair access.

[Deva Link]

sidicks said:

Given that a typical (public sector) final salary costs around 35% p.a. (40 year, 1/60ths accrual at age 65, inflation linked) then to get something approaching half of your salary at retirement you would need to be paying the same percentage of your earnings as your age (not half age!!), unless you were extemely lucky with your investments!!

Don't many of the comments in this thread make you tankful that a sizeable proportion of the population have a decent pension behind them? Something that is worth defending and indeed expanding to other workers?

OK, they cost the taxpayer a lot, but so will looking after people who didn't make any provision for old age.

I also think this thread shows the folly of the argument that adds back the value of the public sector pension into their package, and saying that a £20K/yr public sector salary is worth £30K in the real world. As demonstrated by this thread, the person in the private sector earning £30K isn't throwning £10K/yr into their pension. And give the public sector employee the choice, they wouldn't do that either.

[RYH64E]

Deva Link said:

Don't many of the comments in this thread make you tankful that a sizeable proportion of the population have a decent pension behind them? Something that is worth defending and indeed expanding to other workers?

OK, they cost the taxpayer a lot, but so will looking after people who didn't make any provision for old age.

I also think this thread shows the folly of the argument that adds back the value of the public sector pension into their package, and saying that a £20K/yr public sector salary is worth £30K in the real world. As demonstrated by this thread, the person in the private sector earning £30K isn't throwning £10K/yr into their pension. And give the public sector employee the choice, they wouldn't do that either.

I think most people would be very happy to have a public sector pension and would gladly contribute to it. To get the same pension in the private sector is completely unaffordable for the majority of private sector employees, and knowing that private sector taxes are subsidising public sector pensions adds insult to injury.

[anonymous-user]

RYH64E said:

I think most people would be very happy to have a public sector pension and would gladly contribute to it. To get the same pension in the private sector is completely unaffordable for the majority of private sector employees, and knowing that private sector taxes are subsidising public sector pensions adds insult to injury.

Spot on.