Will the OAP exist for me?
Discussion
Hi folks
I'm 34 years old next weekend. My wife and I both have good jobs on decent salaries. The company I work for is private sector and offers a decent matched contribution pension scheme, ive been in it since I joined 5 years ago. The wife works in the charity sector so has whatever the bare legal minimum the government instructs companies must have.
Our aim has been typical of many I suspect, we want to keep our current standard of living when we retire, but hopefully we will be from a non mortgage cost base.
For the last ten years we have both been putting money into separate private pensions too. I've recently had some work done to bring them together to one pot and the projections for income, well they look ok but they are not stellar.
Then I was talking to the FiL over the weekend. He gets his state pension next month and its Circa £800 a month. That would effectively double my income from other pensions.
So, the question is, will there be a state pension when I reach my retirement age, whatever that may be when I get there! And will it be at similar levels to today, adjusted for inflation of course? Or do I need to budget to hammer more cash into savings in the 10-15 years before I call it a day with work?
What's people's opinions on this?
I'm 34 years old next weekend. My wife and I both have good jobs on decent salaries. The company I work for is private sector and offers a decent matched contribution pension scheme, ive been in it since I joined 5 years ago. The wife works in the charity sector so has whatever the bare legal minimum the government instructs companies must have.
Our aim has been typical of many I suspect, we want to keep our current standard of living when we retire, but hopefully we will be from a non mortgage cost base.
For the last ten years we have both been putting money into separate private pensions too. I've recently had some work done to bring them together to one pot and the projections for income, well they look ok but they are not stellar.
Then I was talking to the FiL over the weekend. He gets his state pension next month and its Circa £800 a month. That would effectively double my income from other pensions.
So, the question is, will there be a state pension when I reach my retirement age, whatever that may be when I get there! And will it be at similar levels to today, adjusted for inflation of course? Or do I need to budget to hammer more cash into savings in the 10-15 years before I call it a day with work?
What's people's opinions on this?
I was reading this the other day
http://www.moneyobserver.com/our-analysis/how-can-...
Not to sound alarmist but it struck me as one of few articles that is working to building on an existing state pension at retirement. Most forecasts (certainly those I have had from IFA's) ignore the state pension entirely when looking at what i want from a projected retirement income
I am a couple of years older than you and certainly not expecting to see any state pension. My view is if it still exists it will be a bonus top up. In any event, the age eligibility is likely to be North of where it is now. I plan on semi-retirement well ahead of that in any event as I have modest needs so if I can cruise along with a reasonable income, a private pension cutting in and then ultimately any state top up at 68 - 75 then great. Perhaps then I will sign up to one of these wasteful PCP schemes and get a Golf R..
http://www.moneyobserver.com/our-analysis/how-can-...
Not to sound alarmist but it struck me as one of few articles that is working to building on an existing state pension at retirement. Most forecasts (certainly those I have had from IFA's) ignore the state pension entirely when looking at what i want from a projected retirement income
I am a couple of years older than you and certainly not expecting to see any state pension. My view is if it still exists it will be a bonus top up. In any event, the age eligibility is likely to be North of where it is now. I plan on semi-retirement well ahead of that in any event as I have modest needs so if I can cruise along with a reasonable income, a private pension cutting in and then ultimately any state top up at 68 - 75 then great. Perhaps then I will sign up to one of these wasteful PCP schemes and get a Golf R..
Not even sure about private pensions being that great, especially after having read a statistic that a large percentage of people do not reach retirement age due to ill health or death.
However I would advise that if your employer has a facility where they will increase their contribution if you also put in the maximum then take it, its almost as good as a wage rise.
The only really wealthy people I know of that are retired have done so out of property or building a business that is large enough to now employ a management team or to sell it on. One man I know, who started a business selling toilet rolls to chemists shops from an old van, has just sold his business and walked away with £42m. The business ended up in pharmaceuticals and his name is on many OTC medicines.
Must admit, I think you are doing the right thing in considering your pension now rather than leave it till its too late, especially if you want to retire before the state retirement age.
However I would advise that if your employer has a facility where they will increase their contribution if you also put in the maximum then take it, its almost as good as a wage rise.
The only really wealthy people I know of that are retired have done so out of property or building a business that is large enough to now employ a management team or to sell it on. One man I know, who started a business selling toilet rolls to chemists shops from an old van, has just sold his business and walked away with £42m. The business ended up in pharmaceuticals and his name is on many OTC medicines.
Must admit, I think you are doing the right thing in considering your pension now rather than leave it till its too late, especially if you want to retire before the state retirement age.
CoolHands said:
I'm expecting a state pension. They can hardly withdraw it when I (we've) been planning on it. You can get a statement of how much state pension you've already accrued, and the NPA is also set (68 for you I believe).
Thanks for the replies so far everyone. Coolhands - where does one look up this info?
CoolHands said:
I'm expecting a state pension. They can hardly withdraw it when I (we've) been planning on it.
The withdrawl of the State Pension for women born after 5 March 1954, means that they won’t hit state pension age until July 2019 . The loss to these women is in excess of £20,000 of basic state pension.To echo what has been said, do not rely on any government for your financial security.
It has the potential to be altered, perhaps only postponed but I wouldnt rely on it as being guaranteed.
eltax91 said:
Hi folks
I'm 34 years old next weekend. My wife and I both have good jobs on decent salaries. The company I work for is private sector and offers a decent matched contribution pension scheme, ive been in it since I joined 5 years ago. The wife works in the charity sector so has whatever the bare legal minimum the government instructs companies must have.
Our aim has been typical of many I suspect, we want to keep our current standard of living when we retire, but hopefully we will be from a non mortgage cost base.
For the last ten years we have both been putting money into separate private pensions too. I've recently had some work done to bring them together to one pot and the projections for income, well they look ok but they are not stellar.
Then I was talking to the FiL over the weekend. He gets his state pension next month and its Circa £800 a month. That would effectively double my income from other pensions.
So, the question is, will there be a state pension when I reach my retirement age, whatever that may be when I get there! And will it be at similar levels to today, adjusted for inflation of course? Or do I need to budget to hammer more cash into savings in the 10-15 years before I call it a day with work?
What's people's opinions on this?
You can look it up here:I'm 34 years old next weekend. My wife and I both have good jobs on decent salaries. The company I work for is private sector and offers a decent matched contribution pension scheme, ive been in it since I joined 5 years ago. The wife works in the charity sector so has whatever the bare legal minimum the government instructs companies must have.
Our aim has been typical of many I suspect, we want to keep our current standard of living when we retire, but hopefully we will be from a non mortgage cost base.
For the last ten years we have both been putting money into separate private pensions too. I've recently had some work done to bring them together to one pot and the projections for income, well they look ok but they are not stellar.
Then I was talking to the FiL over the weekend. He gets his state pension next month and its Circa £800 a month. That would effectively double my income from other pensions.
So, the question is, will there be a state pension when I reach my retirement age, whatever that may be when I get there! And will it be at similar levels to today, adjusted for inflation of course? Or do I need to budget to hammer more cash into savings in the 10-15 years before I call it a day with work?
What's people's opinions on this?
https://www.tax.service.gov.uk/check-your-state-pe...
You'll need to sort out a Verify check, but it's quick to do.
I used the Experian one.
I am not banking on getting a state pension. If one exists when (or if) I reach the qualifying age - then it will be a bonus.
I fully expect the state pension age to be pushed back further before I reach retirement age though (i'm early 40s now). It's currently projecting to be 67 - but I doubt it will stay there.
If I am drawing it before I reach 70 i'll be pleasantly surprised.
People are living longer and there is only a finite pot of money - something has to give.
I fully expect the state pension age to be pushed back further before I reach retirement age though (i'm early 40s now). It's currently projecting to be 67 - but I doubt it will stay there.
If I am drawing it before I reach 70 i'll be pleasantly surprised.
People are living longer and there is only a finite pot of money - something has to give.
Edited by Moonhawk on Monday 6th March 08:34
Robbo 27 said:
The withdrawl of the State Pension for women born after 5 March 1954, means that they won’t hit state pension age until July 2019 . The loss to these women is in excess of £20,000 of basic state pension.
To echo what has been said, do not rely on any government for your financial security.
It has the potential to be altered, perhaps only postponed but I wouldnt rely on it as being guaranteed.
Additionally, as far as I'm aware, if you decided to retire at the gov approved age and say adios with a big smile on your face and take off to a nice and sunny climate such as the Philippines or Thailand the fTo echo what has been said, do not rely on any government for your financial security.
It has the potential to be altered, perhaps only postponed but I wouldnt rely on it as being guaranteed.
kers freeze your pension at the rate when you leave. No further increases like you would receive if you stay in cold/expensive UK. Which is nice.
Talk about a Piss take.
DoubleTime said:
Robbo 27 said:
The withdrawl of the State Pension for women born after 5 March 1954, means that they won’t hit state pension age until July 2019 . The loss to these women is in excess of £20,000 of basic state pension.
To echo what has been said, do not rely on any government for your financial security.
It has the potential to be altered, perhaps only postponed but I wouldnt rely on it as being guaranteed.
Additionally, as far as I'm aware, if you decided to retire at the gov approved age and say adios with a big smile on your face and take off to a nice and sunny climate such as the Philippines or Thailand the fTo echo what has been said, do not rely on any government for your financial security.
It has the potential to be altered, perhaps only postponed but I wouldnt rely on it as being guaranteed.
kers freeze your pension at the rate when you leave. No further increases like you would receive if you stay in cold/expensive UK. Which is nice.
Talk about a Piss take.
Robbo 27 said:
The withdrawl of the State Pension for women born after 5 March 1954, means that they won’t hit state pension age until July 2019 . The loss to these women is in excess of £20,000 of basic state pension.
It wasn't withdrawn per-se, it was postponed to bring it in line with men's state pension age.Instead of getting it at 60 - they will now get it at 66 (the same as a man under similar circumstances would)
Moonhawk said:
Robbo 27 said:
The withdrawl of the State Pension for women born after 5 March 1954, means that they won’t hit state pension age until July 2019 . The loss to these women is in excess of £20,000 of basic state pension.
It wasn't withdrawn per-se, it was postponed to bring it in line with men's state pension age.Instead of getting it at 60 - they will now get it at 66 (the same as a man under similar circumstances would)
CoolHands said:
I'm expecting a state pension. They can hardly withdraw it when I (we've) been planning on it.
Chancellor: Bad news PM, we are skint. Gonna have to make the state pension means tested, with a view to withdrawing it completely over the next few years.
PM: Sorry, you can't do that....some bloke on PH has been planning on it.
Chancellor: Ahhh, OK, didn't realise. I'll have to make up the shortfall from somewhere else.
SunsetZed said:
I think the point was that what you are planning for can be changed by the government in a way that would affect you even if you are only 5 years away from retirement so to say that they can hardly take it away (or indeed change it) when you've planned for it for 2-30 years is naive.
Quite - also the full pension is based on NI contributions, this was 30 years worth and is now 35 years worth. I'm confused about what happens if you were contracted out by contributing to a company pension scheme. I got the impression that didn't count as a full years NI contributions.SunsetZed said:
I think the point was that what you are planning for can be changed by the government in a way that would affect you even if you are only 5 years away from retirement so to say that they can hardly take it away (or indeed change it) when you've planned for it for 2-30 years is naive.
I didn't say they can't take it away or change it. In fact in my post a couple above the one you quoted I have clearly stated that I fully expect it to be changed and also acknowledge that there may even be a chance state pension may not exist by the time I reach retirement.
To expect that it cannot change or cannot be withdrawn is IMO more naive.
Do the maths and it all starts to unravel. A lot of people are paying less in and getting more out at SPA.
To counter this we need to pay fewer people. That means, IMHO, SPA is going to creep up.
Will it exist, I say yes. In what form, I don't know. I think we (people in their 30s) are looking at SPA of 70 and I think it could well be means tested.
To counter this we need to pay fewer people. That means, IMHO, SPA is going to creep up.
Will it exist, I say yes. In what form, I don't know. I think we (people in their 30s) are looking at SPA of 70 and I think it could well be means tested.
condor said:
Quite - also the full pension is based on NI contributions, this was 30 years worth and is now 35 years worth. I'm confused about what happens if you were contracted out by contributing to a company pension scheme. I got the impression that didn't count as a full years NI contributions.
Yep that is true:https://www.gov.uk/additional-state-pension/contra...
Also - a common misconception seems to be that your NI contributions are for your pension (people commenting things like "I have paid my stamp" etc).
That's not how it works. All your qualifying NI contributions (or "stamp") do is qualify you to draw whatever state pension exists, if one does in fact exist. You don't pay into a pot of money for your own retirement like happens with a private pension.
In essence - your NI contributions are paying for the state pensions of those people drawing their's now (your parents and grandparents).
When you retire - it will be the NI contributions of the current working population that pay for your state pension. If there isn't enough income at this point - then it's quite possible state pension will go tits up and you may get nothing. The amount you contributed in NI throughout your working life will, in effect, be irrelevant.
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