Pensions - are you saving enough?

[Anna B]

According to last night's 'Channel 4 Dispatches' a 29 year old woman needs to be saving £200+ a month (I believe their example earned £13,000 a year) into a private/works pension to have a very basic standard of living in retirement.

 

Some of the other examples needed to save more than many people earn in a month! Often because they didn't start saving soon enough. Savings of £100,000 will now buy an annuity (pension) of about £500 a month.

 

What with high rents, mortgages, rising cost of living, paying back student loans etc, is this feasible for most people?

 

Is this yet another ticking time bomb?

[ECCOnoob]

And does the programme base this on the rather unlikley fact that Mrs Unambitious will she still be earning £13k a year aged 55 and there no possibility that her career would have developed through promotion or other work to earn more and in turn put more into her pension pot over the next 25 years of working life and/or that she never invests in a house and/or that she never has a partner/gets married to share the burden and/or she never receives any inheritance from a parent or relative and/or she never acquires any assets whatsoever that may be sold should time be hard...etc..etc...

 

Even if by some minute chance our Mrs U never does any of that. Define what is classed as "basic standard". Is that a roof over your head, food in your belly and heating? I think you will find most pensioners are living with just that now on just the bare minimum state pension. They manage to survive on nothing but state handouts and so would our example Mrs U.

 

Everyone will receive the same state pension and so for anyone who contributed to a private one, no matter how small there is a few hundred pounds a month of additional income on top of the state support. That would help pay for, say, a few luxuries every now and then.

 

Thats pretty much how pensioners have got by for years. Some have been unfortunatle and had nothing but state handout. Others have had a (albeit little) private pension to top up their income.

 

Yes the advice is to start saving early. Some do and many dont. That's life.

Yes it is difficult to pay into one when trying to deal with bills, mortgages and having a lifestyle to fund. That's a sacrifice we have to make because its important. Some do and many dont.

 

The point is, nothing is new here. What's the ticking time bomb? ADULTS need to save for their future shock horror.

 

Amazing how a doom mongering interpretation can be translated into something more palatable when you stop to think beyond the headline.

[jfish1936]

In Australia, old age pensions are means tested.

We are comfortably off (for an undemanding lifestyle) because we had a big family house and downsized to a small one. That left us money to buy an "allocated pension", which has now run down far enough for us to get a small Government pension too.

 

Now, "Mrs Unambitious" will be saving, and her fund can grow by compound interest; can the Government keep its sticky hands off her interest?

Next, in 1966 we had 6 quid a week for food for a family (see the thread on how much for food). Now, inflation has bitten; even here, we're watching prices rise around us faster than our fund investments appreciate. So, if she saves enough to have an income apparently enough at today's prices on retirement, what will it be worth by the time she does retire?

Her best bet in Australia would be to spend 8 years as a Member of Parliament; their pension scheme is extraordinary; all honour to the generous Australian people who recognised the needs of their retired M.P.s!

[Anna B]

And does the programme base this on the rather unlikley fact that Mrs Unambitious will she still be earning £13k a year aged 55 and there no possibility that her career would have developed through promotion or other work to earn more and in turn put more into her pension pot over the next 25 years of working life and/or that she never invests in a house and/or that she never has a partner/gets married to share the burden and/or she never receives any inheritance from a parent or relative and/or she never acquires any assets whatsoever that may be sold should time be hard...etc..etc...

 

 

Believe it or not, many people do not progress that much in their lives which is why social mobility is important, particularly if they get caught in the minimum wage, 0 hours, temporary jobs culture. They do not get the chance to progress. All the things you mention are actually under threat in our new 'austerity' economy, it just hasn't had time to filter through yet. Sorry if that's gloomy, but that's arguably the way it is, and IMO why we should be banding together to fight it.

 

There is a crisis in pensions thanks to Gordon raiding the pension pot, rising costs, bank charges etc, and people seem to be growing increasingly unwilling to fund more and more OAPs, so I suspect some government or other will suggest state pensions being means tested before long, (like Australia.)

[Mecky]

I may save more if my employer paid me more in the first place.

 

I wonder how many of the MPs that keep banging on about pensions draw a state pension and how many of them actually need it considering all of the other benefits and expenses they've screwed us over with over the years?

[francypants]

Yes right, go without and struggle to pay into a pension now which you can't get your hands on even if it's doing really badly ( you can transfer it but can't draw it out ) but the government can use it and lose it !!

Then when it's your time to draw your pension, you find that because you've been paying into this pension you are a gnats over the threshold to draw any means tested benefits, so you struggle again. Makes sense doesn't it !

[tinfoilhat]

I've gone "all in" with the business, if I can sell it, or even just the stock I've a fighting chance. I might be able to run some of it part time. If none of that works out I'm proper knackered. Ill be an elderly benefit scrounger!

[spilldig]

Yes right, go without and struggle to pay into a pension now which you can't get your hands on even if it's doing really badly ( you can transfer it but can't draw it out ) but the government can use it and lose it !!

Then when it's your time to draw your pension, you find that because you've been paying into this pension you are a gnats over the threshold to draw any means tested benefits, so you struggle again. Makes sense doesn't it !

 

Too right, and it's already happening.

[Mr Gobby]

Don't have a pension .Do have bricks and mortar, far better then a pension.

[erebus]

Do not worry. there will be no need for pensions in a 30 years, with the NHS finished, most will die well before their pension are due, and in the UK with its lack of industry, and booming population cannot you realise its all just a con.

 

The pension funds need to make profits, and to do this they have to invest, and the products they invest in....well many are very questionable, as they were manufactured by the banks. The banks sold such products to Greece, Spain and many other countries, pension funds where plunder was waiting to be taken.

 

So where will the British wealth come from? North Sea oil and gas will be history by then. So there are more people employed, but where is the wealth coming from, where is it being generated from? Tourism? Educating foreign students? The coal and steel industry? Building cars? Making railways, showing the world we are a powerhouse of what? Where is the investment coming from? Can we print paper money forever, and pretend its OK while we pile-drive generations into debt?

 

SO where is the wealth coming from.....ever thought of that? So you have got some property, and who will be buying it, and what with? In the Mark Jenkinson property auction catalogue last week, two properties had an asking price of 10K. OK so they were no Buckingham Palace, but the bricks and land alone are worth more than that, whatever the area, however crap the area.

 

Things are certainly looking up for them that have cash for now, but who will be paying the rents in20-30 years, as housing benefits are already being cut and this is just the start. If you have property in London then that might just hold its price at todays value, but anywhere else??? 10K???