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

[Ozzie Osmond]

sidicks said:

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

you would need to be paying the same percentage of your earnings as your age (not half age!!)

The key point here is that in order to be worthwhile, saving for retirement has to be undertaken on a serious basis, not just a few single figure % of earnings.

Compare, for instance, the level of commitment needed to buy a house.

[Steffan]

RYH64E said:

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.

Public sector pensions are unfunded I think.

I am not aware that the government attempts to fund the pensions of public sector workers by investment as the private sector pensions are funded. I do not think there is an invested fund. I think it is all paid out of taxation. I may be wrong perhaps a Pensions expert can confirm or deny this.

The problem with relying on the government is they are not reliable. At all. Or perhaps a better description is the one related to Errol Flynn. They will ALWAYS let you down.

I think the entire government public sector pensions scheme is a huge Ponzi scheme and not actually funded from contributions in any way. Again can a pension's expert confirm or deny please?

My understanding is that all state pensions are also effectively a Ponzi scheme which means eventually these will either disappear or become totally worthless through inflation. Again can an expert confirm?

Unless you think otherwise, and are certain of the facts, why would you invest in scheme's which appear to be certain to fail? Particularly when the administrators, the government, are run by crooks. You would be mad.

There are structural consequences to an aging population. I suspect in reality one of these is that retirement age will rise as life expectancy rises. Thus when I started work most men died within 5 years of claiming state pension. For that to be the case now most people could not retire before 1t least 70 and probably 75. We are only seeing the early signs of this. It will become more ans more apparent as life expectancy rises.

Not exactly what everyone wants to hear but this seems to me to be the fact of this matter. Any pension experts about?

[fido]

To answer the question, no it'll be someone else's st.

If you carry on paying down the mortgage, save your ISA every year and invest that £100k inheritance instead of spending it on luxuries .. then that will be your pension.

[Wacky Racer]

markcoznottz said:

My top tip would be bungalows. They will never build anymore bungalows again,
so theres a limited supply.

??????

And where did you get that little snippit from?...

[Ozzie Osmond]

fido said:

To answer the question, no it'll be someone else's st.

If you carry on paying down the mortgage, save your ISA every year and invest that £100k inheritance instead of spending it on luxuries .. then that will be your pension.

Very sound advice IMO.

[sidicks]

Steffan said:

Public sector pensions are unfunded I think.

I am not aware that the government attempts to fund the pensions of public sector workers by investment as the private sector pensions are funded. I do not think there is an invested fund. I think it is all paid out of taxation. I may be wrong perhaps a Pensions expert can confirm or deny this.

There is a separate thread on this, but to answer your questions:

The majority of public pensions are unfunded. The key exception is the local government pension fund (which only has 60% of the assets it needs to fund the benefits promised!).

Employees make a contribution and there is a 'notional' employer contribution, but in aggregate these are still not sufficient to fund the future benefits being promised. Hence there is an 'invisible' additional taxpayer subsidy.

Currently the combination of contribtions (employee and employer) is more than sufficient to meet the pension paying out (which leads many people who don't fully understand pensions to believe that these pension schemes are value generating for the taxpayer, when the truth is the absolute opposite (as explained above)).

Steffan said:

The problem with relying on the government is they are not reliable. At all. Or perhaps a better description is the one related to Errol Flynn. They will ALWAYS let you down.

I think the entire government public sector pensions scheme is a huge Ponzi scheme and not actually funded from contributions in any way. Again can a pension's expert confirm or deny please?

My understanding is that all state pensions are also effectively a Ponzi scheme which means eventually these will either disappear or become totally worthless through inflation. Again can an expert confirm?

Yes they are effectively a giant ponzi scheme as the sustainability of the scheme requires either an increasing employee base providing larger contributions (however the public sector is already too large, and needs to be reduced in size, not increased) or significantly increased contributions (and the Unions currently won't accept even minor increases, let alone the huge increases that would be required).

Given that the benefits are linked to inflation, then high inflation means higher pensions, so unlike the national debt, we can't just inflate away the problem!

Steffan said:

Unless you think otherwise, and are certain of the facts, why would you invest in scheme's which appear to be certain to fail? Particularly when the administrators, the government, are run by crooks. You would be mad.

There are structural consequences to an aging population. I suspect in reality one of these is that retirement age will rise as life expectancy rises. Thus when I started work most men died within 5 years of claiming state pension. For that to be the case now most people could not retire before 1t least 70 and probably 75. We are only seeing the early signs of this. It will become more ans more apparent as life expectancy rises.

Not exactly what everyone wants to hear but this seems to me to be the fact of this matter. Any pension experts about?

Plenty, but they aren't always listened to...

You are of course correct that with increasing longevity, the natural conclusion is that people have to work longer and pay more into a pension. The Unions seem to believe that they are somehow exempt from this simple fact!!


Sidicks

Edited by sidicks on Sunday 13th November 13:34

[Globs]

Deva Link said:

Don't many of the comments in this thread make you thankful 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.

Not when they stole my pension to pay for it.

[Deva Link]

Steffan said:

Unless you think otherwise, and are certain of the facts, why would you invest in scheme's which appear to be certain to fail? Particularly when the administrators, the government, are run by crooks. You would be mad.

Alarmingly, there are plenty of people working the public sector who think this.

The NHS pension fund has way fewer members than it should have, considering the NHS emplous 1.7M people.

[markcoznottz]

Wacky Racer said:

markcoznottz said:

My top tip would be bungalows. They will never build anymore bungalows again,
so theres a limited supply.

??????

And where did you get that little snippit from?...

Well with an increasing uk population and the greatest pressure on state housing in europe, its unlikely large plots which house the least amount of people per square metre would be approved. Its getting to the point where 1950s/60s bungalows which would need total renovation to sell on todays market are being knocked down and those blocks of 4 house/flats with parking put in. No brainer really, 4x yield on the same plot.

[F i F]

fandango_c said:

CASHisKING said:

Probably a better bet than giving money to s pinstripe suited mugger!

But if you don't win, then the shysters steal your money!

Good one, keep it up!

[NorthernBoy]

Willy Nilly said:

If you put money into an ISA, you get tax relief when you put the money in and don't get taxed whe you take your money out.

I don't know who told you that, but it's not true. No tax relief on the way in, or out.

[ukwill]

JQ said:

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

For exactly what reason is a 2/3 bed flat not that much cheaper than a 5-bed detached, when both are in the same area?

[DonkeyApple]

audidoody said:

OP: this is a l-o-n-g shot. Buy a safe. Then buy one a gold coin a month for whatever you can afford (e.g.krugerrand, sovereign etc). When you're 60 you'll have around 216 gold coins that can be instantly sold at, hopefully, a rate that has kept up with inflation. There will be no capital gains tax as you are selling legal tender.

That is genuinely fking mental

[DonkeyApple]

markcoznottz said:

My top tip would be bungalows. They will never build anymore bungalows again,
so theres a limited supply.

I tend to agree that current land values to tend to suggest that no commercial outfit will build new bungalows, and many existing ones are being knocked down or converted. I can't see land values falling back to the point where bungalows become commercially viable again.

Having said that, it does not take away from the fact that older people tend to only want to live on one floor and also have fears over investment returns and whether they are inflation proof. So this raises the question of whether the two problems can be resolved withon one solution.

That solution being the commercial viability of bungalows with a self contain flat above for renting out to deliver constant income stream with suitable laws to protect that stream for qualifying pensioners.

Ergo, you downsize to a smaller home and create a monthly income stream at the same time.

[sidicks]

DonkeyApple said:

Having said that, it does not take away from the fact that older people tend to only want to live on one floor and also have fears over investment returns and whether they are inflation proof. So this raises the question of whether the two problems can be resolved withon one solution.

That solution being the commercial viability of bungalows with a self contain flat above for renting out to deliver constant income stream with suitable laws to protect that stream for qualifying pensioners.

Ergo, you downsize to a smaller home and create a monthly income stream at the same time.

Hmm, very interesting!

Sidicks

[ukwill]

talking about bungalows... chap at the end of the road sold his earlier this year, now the plot has 4 townhouses on it...

I reckon he probably sold for around 650-700ish. Each townhouse is, i believe, up at 600.

[audidoody]

DonkeyApple said:

That is genuinely fking mental

Which is exactly how I would describe the current pension industry. How else would you describe the process of handing your money every months for 18 years to a faceless fund manager who has as much chance of beating the markets as you have if you were to stick a bunch of names on a dartboard, blind fold yourself and then invest in whatever the arrows hit? This leaves aside the moot point that said fund manager will help himself to a slice of your money win, lose, or draw followed by HMRC grabbing a whack of whatever is left, assuming the Government of the day hasn't altered the rules so screw you even more.

If not the gold, then at least a BTL.

[DonkeyApple]

audidoody said:

DonkeyApple said:

That is genuinely fking mental

Which is exactly how I would describe the current pension industry. How else would you describe the process of handing your money every months for 18 years to a faceless fund manager who has as much chance of beating the markets as you have if you were to stick a bunch of names on a dartboard, blind fold yourself and then invest in whatever the arrows hit? This leaves aside the moot point that said fund manager will help himself to a slice of your money win, lose, or draw followed by HMRC grabbing a whack of whatever is left, assuming the Government of the day hasn't altered the rules so screw you even more.

If not the gold, then at least a BTL.

Just about the only scam that rapes more in fees, redemptions and is more risky than UK pensions is gold coins with physical delivery.

[Globs]

audidoody said:

DonkeyApple said:

That is genuinely fking mental

Which is exactly how I would describe the current pension industry. How else would you describe the process of handing your money every months for 18 years to a faceless fund manager who has as much chance of beating the markets as you have if you were to stick a bunch of names on a dartboard, blind fold yourself and then invest in whatever the arrows hit? This leaves aside the moot point that said fund manager will help himself to a slice of your money win, lose, or draw followed by HMRC grabbing a whack of whatever is left, assuming the Government of the day hasn't altered the rules so screw you even more.

If not the gold, then at least a BTL.

The only flaw I can see with audidoody's idea is getting a secure enough safe.
With a bank deposit safe it could work well.
In fact I'm sure it's already being done in large numbers.

[Deva Link]

DonkeyApple said:

Having said that, it does not take away from the fact that older people tend to only want to live on one floor and also have fears over investment returns and whether they are inflation proof. So this raises the question of whether the two problems can be resolved withon one solution.

That solution being the commercial viability of bungalows with a self contain flat above for renting out to deliver constant income stream with suitable laws to protect that stream for qualifying pensioners.

Ergo, you downsize to a smaller home and create a monthly income stream at the same time.

Or you could what a fair number of people seem to - convince the older person to sell their house, give one of their children the proceeds and then and move in with them. The child sells their house too and uses the combined sum to buy a bigger house with suitable ground-floor accommodation. Then bides their time until the old person kicks the bucket and doesn't have to contend with sharing the original equity with brothers and sisters.

I know several people who have done this and are in houses that are significantly bigger than they would have owned if they'd not had the additional funds. One of them has council funded carers going in 3 times to look after their elderly mother.