Pensions

[Sergeant Wilson]

Just now, Grim O'Grady said:

 

It's all I've got & an insurance policy etc etc. 

G-Bo(re)

If it's not broke don't fix it!

[strichener]

1 minute ago, throbber said:

 

Why is that scary for you? I haven't paid anything towards a pension myself but if I start at 30 then it's still a good 35 years of savings - £30 a week for 30 years will be £45k upon retirement so it's not that big a deal not paying towards it through your 20's. Especially when a good number of people in their 20's spend years travelling, studying, pissing about at work from job to job or saving up for a deposit for a place of their own then a pension won't top their financial priorities list.

Cumulative performance is why should invest as early as you can.

[Ross.]

1 minute ago, throbber said:

 

Why is that scary for you? I haven't paid anything towards a pension myself but if I start at 30 then it's still a good 35 years of savings - £30 a week for 30 years will be £45k upon retirement so it's not that big a deal not paying towards it through your 20's. Especially when a good number of people in their 20's spend years travelling, studying, pissing about at work from job to job or saving up for a deposit for a place of their own then a pension won't top their financial priorities list.

Do you have a pension through your employer?

Based on retiring at 65, how long would you expect to live? Will £45k realistically fund that period of time?

I'm a bit of a hypocrite on the subject. I've spent large parts of my career selling pension products and have been through enough sales courses that ram all the numbers down your throat to know better, but it was only a couple of years ago I started considering it.

I have a few things I am now looking at for long term income, though my fall back plan is to move home and use the currency difference to my advantage if it comes to it.

[strichener]

Just now, throbber said:

 

I agree - try telling that to your average 21 year old though.

Purchasing an annuity (not a recommendation BTW) would see an income of around £1,200 to £2,600 per annum for a 45k fund if you choose to take the maximum tax free lump sum.  In terms of retirement, a 45k pension fund is the equivalent of going out at the weekend with a fiver.

[Ross.]

Just now, throbber said:

Ross I don't have a pension through my employer - I'm graduating from uni in 2017 though so should hopefully get something sorted out then when I have a proper career plan. Was doing building work through my 20's and travelling and studying and never gave a pension much thought tbh.

Most people don't. I was selling SIPPs and spent time most days talking to people about their pension plans but I didn't bother a f**k until I left Scotland. Only in the last couple of years I've started getting my shit together. Looking at the numbers I wish I had started 10 years earlier.

[die hard doonhamer]

I started contributing to my pension at 20. Next time I get a pay rise I'm going to bump up my contribution to the maximum that my employer will match (I'll put in 8% and they'll put in 14%).

[Honest Saints Fan]

I started at 22. I'd ideally like to retire before I'm 65 (years away) as someone will need to look after an old pish-stained Ruggy. 

I'm also lucky that whilst on maternity leave my employer has been contributing not only their share to my pension pot but also mine so I'm not missing out by being off work and it's also not coming off my SMP.

Most of my friends haven't even thought about retirement. I find that mental.

[Adam]

I started at 22. I'd ideally like to retire before I'm 65 (years away) as someone will need to look after an old pish-stained Ruggy. 

I'm also lucky that whilst on maternity leave my employer has been contributing not only their share to my pension pot but also mine so I'm not missing out by being off work and it's also not coming off my SMP.

Most of my friends haven't even thought about retirement. I find that mental.

There's plenty of folk in my work older than me that don't have anything to do with the pension (although I believe the new rules might mean that have to now, or in the future?).

I worked out the other week that my employer and I contribute a total of 14% of my salary to my pension a year. To retire on £10,000 a year I will need to work until I'm 69. I had upped it I'm June but due to a change in circumstances I've had to reduce it. I'm praying that the state pension is still about when I'm older to act as a top-up, but genuinely wouldn't be at all surprised if it becomes a thing of the past, or something for those who have been stupid enough to not pay into a private scheme.

Basically, we're all fucked.

[Blootoon87]

I'm not worrying about my pension yet. My employer pays in a certain percentage, can't remember how much though. I don't put anything away myself. Live fast, die young!

[hk blues]

I've not really thought about it since getting this letter about 12 years ago so not sure if it has changed.

Quick google -

You need 30 qualifying years of National Insurance contributions or credits to get the full basic State Pension. This means for 30 years at least one of the following applied to you:

you were working and paid National Insurance

you were getting National Insurance Credits, eg for unemployment, sickness or as a parent or carer

you were paying voluntary National Insurance contributions

If you have fewer than 30 years, your basic State Pension will be less than £119.30 per week but you might be able to top up by paying voluntary National Insurance contributions.

Think things changed from April 2016.

Not really clear but understand the number of years increased to 35 and the new max pension is £155 per week but think it only applies to retirees sometime in the future. Seems it will apply to me.

I was at the max as i paid voluntary contributions as i live overseas but now need to make up 8 more years to get the £155.

Didn't receive anything from DWP about this, had to do all the legwork myself. I guess a few guys living overseas will have missed this change.

[bob the tank]

Serious Q.

I've taken early retirement through a voluntary redundancy from work, what happens about my state pension, obvz not paying any stamp anymore, so will it be reduced when I hit state pension age?

Have any of you older c***s done anything similar & know the answer?

Thank you in advance. 

G-Bo(re) 

I'd find out when exactly you qualify for the state pension Grimbo. When I was between jobs, I was told I wouldn't get the pension until I was nearly 67, and my sister in law who is four months older than me was told she wouldn't get it until almost 68. No chance of getting a part time job with peoples pension provision ?

[Lambie's Pigeon Feed]

Anyone recommend some good reading on investing? I'm only doing it because regular savings and cash ISAs are a joke for rates, I can't top up a civil service pension and I don't want my money to diminish over time. I don't want the most boring safe funds ever but I'm not going to be monitoring it on a regular basis, seeking out emerging funds, etc so my time spent on it will be low.

And even though any returns aren't going to be above the tax free capital gains threshold I presume I still want to be doing it through a stocks and shares ISA?

[Suspect Device]

On ‎9‎/‎15‎/‎2016 at 12:09, Lambie's Pigeon Feed said:

Anyone recommend some good reading on investing? I'm only doing it because regular savings and cash ISAs are a joke for rates, I can't top up a civil service pension and I don't want my money to diminish over time. I don't want the most boring safe funds ever but I'm not going to be monitoring it on a regular basis, seeking out emerging funds, etc so my time spent on it will be low.

And even though any returns aren't going to be above the tax free capital gains threshold I presume I still want to be doing it through a stocks and shares ISA?

 

A fairly decent and simple read is The Naked Trader by Robbie Burns (no relation I guess). You can probably get a pdf copy online for free. I got one emailed to me by a mate.

http://nakedtrader.co.uk/

On a separate point, I noticed when I was online looking at my self assessment ta you can get an estimate of what your state pension would be.

https://www.tax.service.gov.uk/check-your-state-pension/account

Apparently I've made NICs of £35,947.32 over 33 years so if I manage another 2, I will be entitled to £8,943.93 (not accounting for inflation increase) from 23rd of January 2035.

If I'm still alive.

Edited October 10, 2016 by Suspect Device

[Le Tout P'ti FC]

Bump. I've been reading this series of articles in the Guardian today and the fear has set in.

Talks of a generation who can't afford to retire, and a return to mass pensioner poverty. The drop in home ownership exacerbating matters because of permanent rental commitments, where previously mortgages would have been cleared.

Most alarming to me was this - the IRRI state that people should put 15% of their lifetime earnings into their pot to avoid pensioner poverty. But 42% have no private pension, and the average fund size is only £47k. This would buy you an income of
47% of those in 30s/40s are not saving adequately, or at all. Over 45s private savings will generate an income of £4k on average.

More. 63% of those retiring today do not receive a full state pension. Hints to expand state retirement age to 75 or even 81. My retirement age has already climbed from 65 to 68, so roughly 1 year added for every 5 years I have worked so far.

It is quite the most depressing and terrifying list of woe I have read in some time.

I'm 38. I saved a little bit privately from graduation at 22 until I was 28, my previous employer did not offer a scheme. It was a modest amount in retrospect.

From 28 onwards I've been saving 10% into my work scheme, and my increasing private contributions into my own scheme take me up to maybe 18% in total. So I've put a decent sum aside.

But yet every time I read something like this and do a pensions calculator it shows that I'm not doing enough.

The whole thing alarms me, and I am a financial professional.

Anyway, if you want to share a dose of the fear, read this...

'There's a danger of a generation who can't afford to retire'

https://www.theguardian.com/membership/2017/jan/23/saving-retirement-pension-generation-old-age?CMP=Share_AndroidApp_Messages

[Ross.]

I'd say 81 is probably a tad optimistic. I'm only a few years younger than you(34 going on 35) but I fully expect the retirement age to be upped to 84 at least for folk my age.

If I still stayed in the UK I would be fucked, as far as that goes. Had a decent enough job but thanks to private renting and a fairly reckless attitude towards my lifestyle, I had next to f*ck all put away beyond my NI contributions and the 5% of my salary that was going into my works pension(matched by my employer).

Since finding work over here I am extremely comfortable. I have one flat back home which is let out at the moment and I hope that it stays that way in perpetuity. I am considering buying a second, but need to really look into the tax consequences as I think the income will move me up a tax bracket over here. My pensions contributions here work out around 8x what I was managing back home, which is helping me catch up with everything I missed out. I shifted the pension I had with my previous employer to a SIPP, which I have so far managed to do OK with though it will only ever form a tiny part of any pension plan I can put together. The Swiss public pension is one of the largest and most stable in the world, and even if I leave here I will be able to transfer my contributions elsewhere so I won't lose out.

Worst case scenario for me is moving back to the UK as it stands, unless there are huge changes in the world. The currency inflation should mean I do OK in that respect.

[dee_62]

54 minutes ago, Le Tout P'ti FC said:

Bump. I've been reading this series of articles in the Guardian today and the fear has set in.

https://www.theguardian.com/membership/2017/jan/23/saving-retirement-pension-generation-old-age?CMP=Share_AndroidApp_Messages

Thanks for posting - a real eye-opener.

Company I work for stopped its final salary scheme a few years ago - I'd accrued 20 years service in it before it closed - I then joined the money purchase scheme and pay in 8% (which attracts a company contribution of 14%).  

After seeing loads of my colleagues do it, I finally got around to getting a valuation for my final salary pot and went to an IFA to discuss options.  Think I'll be moving it from its current location and investing in a private pension with a view to using it for a drawdown.  Ideally, I'd like to take the 25% tax free lump sum option at 55 and have a nice holiday, pay off any remaining debts (potential student loans, weddings and help the kids with deposits for property if needed). (My mortgage is due to be paid off at age 53).  I'd like to keep working FT with the same company, stick the rest of the tax free sum in various ISAs etc and leave the remaining 75% of the pot untouched and earning investment income for another 6/7 years.  Hope to finally quit any form of paid FT work by the time I'm 59, use the leftover tax free sum as an income for a while before finally dipping into the leftover invested pot.

The private pension also gives better provision to my wife and kids in the event of me shuffling off before them - unlike the final salary scheme which would pay them an absolute pittance.

I've also paid in about 32 years of National Insurance, so only 3 more years to qualify for the full £8900 p.a from age 67.

[Granny Danger]

The pension shortfall is quite frightening but the political response that may flow from it may be equally concerning.

I can foresee a right-wing response that seeks to drive a wedge between 'wealthy' pensioners and those less well off (just look at the title of Willets' book mention in the Guardian article).  In doing so they will seek to ignore the fact that the UK state pension is not particularly generous when compared to other economically developed countries.

 

Any serious response to the pension crisis will need to address wealth inequality for those of working age.  People working for the minimum wage can hardly be expected to put much/anything aside for old age, even if they do they won't build up much of a pension pot.

 

I realise most of these points would be more at home on the Politics Forum, but any debate about this issue is largely a political one.

[Dosser-fae-the-shire]

Thanks for posting - a real eye-opener.
Company I work for stopped its final salary scheme a few years ago - I'd accrued 20 years service in it before it closed - I then joined the money purchase scheme and pay in 8% (which attracts a company contribution of 14%).  
After seeing loads of my colleagues do it, I finally got around to getting a valuation for my final salary pot and went to an IFA to discuss options.  Think I'll be moving it from its current location and investing in a private pension with a view to using it for a drawdown.  Ideally, I'd like to take the 25% tax free lump sum option at 55 and have a nice holiday, pay off any remaining debts (potential student loans, weddings and help the kids with deposits for property if needed). (My mortgage is due to be paid off at age 53).  I'd like to keep working FT with the same company, stick the rest of the tax free sum in various ISAs etc and leave the remaining 75% of the pot untouched and earning investment income for another 6/7 years.  Hope to finally quit any form of paid FT work by the time I'm 59, use the leftover tax free sum as an income for a while before finally dipping into the leftover invested pot.
The private pension also gives better provision to my wife and kids in the event of me shuffling off before them - unlike the final salary scheme which would pay them an absolute pittance.
I've also paid in about 32 years of National Insurance, so only 3 more years to qualify for the full £8900 p.a from age 67.

Be careful if you're transferring a final salary pension. Make sure you fully understand what you are doing.

[dee_62]

Be careful if you're transferring a final salary pension. Make sure you fully understand what you are doing.

Yep, been to an IFA qualified to talk transfers. The annuity provided by the final salary isn't that great tbh. Particularly if I want to retire in my late 50s. Other stuff like death in service etc will continue if I keep paying into my money purchase scheme. Also, like I mentioned, the inheritance features of the final salary are non-existent.
Working on the basis that I'd like more money available at a younger age when I'll want to do more stuff and by the time I'm in my 90s, I'll not be needing anything like as much. So, while its nice to know that the final salary scheme will pay a set amount, increasing in line with cost of living, for the rest of my life, I just don't think it's the way ahead for me.

[JamieT1314]

Some of the cetv's bring offered on final salary schemes at the moment mean you would be mental not to transfer, can get your full 25% pcls, tailor your death benefits on the annuity accordingly and possibly stick a bit in drawdown for a rainy day. The new hybrid products are great for this.