Half of working-age adults are not paying into a pension

[bitchstewie]

I know there are some scary stats about the percentage of the population who have absolutely no savings but as a stat this has absolutely floored me.

Why I'm not paying into a pension

[South tdf]

No surprising really as a lot of my generation (born in the 80’s) believe someone else will always look after them when needed. It’s happened so far so why not in the future. Either way if it does go wrong it will always be someone else’s fault.

[OutInTheShed]

'Working Age' includes a lot of us who are drawing pensions.

And a lot of unemployed, criminals and people who have other arrangements.
And a few who've already paid in as much as they think is worthwhile.

[Rufus Stone]

bhstewie said:

I know there are some scary stats about the percentage of the population who have absolutely no savings but as a stat this has absolutely floored me.

Why I'm not paying into a pension

Thing is, having just confirmed that they will want 40% of your pension when you die, the Government are unlikely to manage to persuade those not making provision to do so.

[scenario8]

It doesn t surprise me in the slightest that comfortably well off people don t understand the financial situation of people worse off than them.

Glad you ve been made aware of the situation.

I ve been banging this drum literally for decades. PH, particularly NP&E contains a very large number of contributors who themselves are already retired on very good terms (commonly now unavailable to younger generations) or who are in a position to set aside significant sums into long term savings plans commonly with very good terms. Millions out there don t make very much money and don t have access to the generous savings and pensions plans others think of as entirely ordinary.

Thread after thread after thread in this place talks of 10% employer contributions as normal, 40% tax rebates and so on as if these sorts of terms are available for all but a tiny number of most likely undeserving layabouts. Meanwhile many public sector schemes rely on astronomical employer contributions to make the numbers work.

Realistically what do we expect workers on £25-40k or so pa, who may have access only to 3%/3% stakeholder pensions while trying to pay rent, save for a deposit, pay down a mortgage, have a family etc? Or contractors with similar annual earnings?

(I predict much talk of gym memberships, white Audis, coffees and avocados).

(Talk I do have a tiny bit of time for!)

[bitchstewie]

Agree with a lot of that as I've taken a fair bit of stick over the years for pointing out "cancel Netflix and batch cook" won't quite cut it when you've got sod all to start with.

I started a thread on here about people facing cost of living issues and one of the first replies was to ensure you make full use of the then £40K pension allowance.

So I'm not surprised there is a problem but I am surprised at the scale of the problem.

I'd be interested what the stats are on people actively withdrawing or opting out from a workplace scheme.

[911Spanker]

Labour are fking the economy up big time so it's no surprise.

[scenario8]

What is surprising is the number of eligible individuals opting out of public sector schemes these days. Despite being in most cases evidently clever bods operating in union heavy and pensions and benefits savvy work environments. Utter madness.

I read that article earlier and the stats contained within it are laughable. Back of an envelope maths to provide for a comfortable retirement income? A lottery win. Literally that. If you re not in a public sector scheme the sums required for working people is absurd.

Many will benefit from very large inheritance windfalls. Many will not. I suspect there will be a significant overlap of those in comfortable retirement positions receiving the significant inheritance windfalls.

We re very much heading towards a haves and have nots future I fear.

[valiant]

911Spanker said:

Labour are fking the economy up big time so it's no surprise.

This has been going on for a while.

It certainly hasn’t just started to happen in the last year.

[Terminator X]

You don't actually need that much money when you retire though assuming mortgage paid off. £100 a week food, £100 a month for energy. Same for Community tax.

A couple would get what £25k combined from Govt pension, not taxed. Assuming you had even a small personal pension each you'd be ok imho.

Also your lifestyle will change at 65-70 due to age related stuff too, not out clubbing every night of course!

TX.

[White-Noise]

I doesnt surprise me at all.

I'm an older millennial and so many of my friends to my knowledge hadn't started anything until well into their 30s, and they did have the means to do it earlier.

I think a lot of the time people are just busy with life and don't think about money and the future (pensions and savings). For myself in contrast it was always important to sort my pension and savings.

There is a problem coming down the line but hey, where isn't there a problem coming down the line!

[paulrockliffe]

It's worth bearing in mind that Boomer wealth is all going somewhere and there's a lot of it. There'll be a lot of people that will retire with no pension and live comfortably off their parent's good fortune.

[Pit Pony]

Terminator X said:

You don't actually need that much money when you retire though assuming mortgage paid off. £100 a week food, £100 a month for energy. Same for Community tax.

A couple would get what £25k combined from Govt pension, not taxed. Assuming you had even a small personal pension each you'd be ok imho.

Also your lifestyle will change at 65-70 due to age related stuff too, not out clubbing every night of course!

TX.

I have spent the last year tracking our spending.

We could live on the Old Age pension, provided we dont want to go anywhere or do anything that isn't free.

[ChevronB19]

bhstewie said:

I know there are some scary stats about the percentage of the population who have absolutely no savings but as a stat this has absolutely floored me.

Why I'm not paying into a pension

I fortunately will get a pretty good pension, but not for lack of trying. We were never taught about pensions at school (at least mine), or VAT, tax, any kind of economics to be honest. I wish we had. Should be taught as a basic life skill along with sex education, relationships etc (NB: this was in the 80’s, it may well hopefully be on the national curriculum).

[ChevronB19]

scenario8 said:

What is surprising is the number of eligible individuals opting out of public sector schemes these days. Despite being in most cases evidently clever bods operating in union heavy and pensions and benefits savvy work environments. Utter madness.

I read that article earlier and the stats contained within it are laughable. Back of an envelope maths to provide for a comfortable retirement income? A lottery win. Literally that. If you re not in a public sector scheme the sums required for working people is absurd.

Many will benefit from very large inheritance windfalls. Many will not. I suspect there will be a significant overlap of those in comfortable retirement positions receiving the significant inheritance windfalls.

We re very much heading towards a haves and have nots future I fear.

I knew several long term ‘contractors’ who just looked at non-contribution/no pension as ‘extra cash in my pocket’ and spent it. With no forthcoming inheritance or anything else. These were people on huge daily rates in the nuclear industry.

[cml24]

I believe around 35% of working age adults pay no income tax (either not working or earning below personal allowance). It's reasonable to assume none of those would have opportunity or reason to pay into a pension, so that only leaves about 15% not paying in who potentially could and potentially might benifit.

[richhead]

ChevronB19 said:

. We were never taught about pensions at school (at least mine), or VAT, tax, any kind of economics to be honest. I wish we had. Should be taught as a basic life skill along with sex education, relationships etc (NB: this was in the 80 s, it may well hopefully be on the national curriculum).

Ive always thought this, so many people dont have a clue about simple economics, it would be far more useful than half the subjects taught at school.

[Condi]

paulrockliffe said:

It's worth bearing in mind that Boomer wealth is all going somewhere and there's a lot of it. There'll be a lot of people that will retire with no pension and live comfortably off their parent's good fortune.

The generation's who do get the Boomer wealth (largely Millennials) will be the richest generation ever, but also one of the most unequal in centauries. Your success in life today depends (statistically), not on how hard you work, or what school you went to, but whether your grandparents had a house. It's disastrous for society in the longer term, work is not being rewarded but whether your grandparents were fortunate enough to buy their own place is.


Anyway, from memory the youngest generation in the workforce are actually some of the better savers. Partly due to auto-enrolment, but also because they've been told how important it is from a younger age. Some of those saving the least are people in their late 30's and 40's, who didn't have auto enrolment when they were younger, but also saw their parents and more senior staff being nicely looked after by company pensions and the state. They're not going to get the same benefits as their predecessors, but haven't worried about it as much as those coming after. Obviously some will be okay with money coming down from parents and grandparents, but many will not be.

[Jamescrs]

South tdf said:

No surprising really as a lot of my generation (born in the 80 s) believe someone else will always look after them when needed. It s happened so far so why not in the future. Either way if it does go wrong it will always be someone else s fault.

Not sure about that, I was also born in the (early) 80's and from a young age my dad always stressed to me how important a pension was and said to me there may well not be a state pension by the time I retire so I needed to have one, and I always have, I still think he may have been right and in 20 plus years time I may not get a state pension or something will be means tested.

[South tdf]

Jamescrs said:

Not sure about that, I was also born in the (early) 80's and from a young age my dad always stressed to me how important a pension was and said to me there may well not be a state pension by the time I retire so I needed to have one, and I always have, I still think he may have been right and in 20 plus years time I may not get a state pension or something will be means tested.

Am in the same position, very healthy private pension but so many friends with very good jobs only seem to have the basic employer contributions.