Pensions

[juddian]

The problem with pensions is that for most people the results are so far away from the planning stage and too many fingers can dip into the pie over the decades.
From snake oil salesmen overselling the product in the first place to thieving swine filching the funds and then disappearing ‘overboard’, to snot gobbling chancer chancellors raiding the funds, and a myriad of other scenarios along the way, you do not know what you will actually receive till the time comes, and thats if you manage to stay in the same job long enough to reap the benefits.

The days of golden final salary pensions is over for mere private sector working class folk, you would not believe what those in better jobs, both in private but mainly in the public sector have to look forward to, even now, those in the public sector and yes especially MP’s, it matters not what happens to theirs they’ll just add to council or income or any other tax to make up any shortfall.
The rest of us are in a lottery.

My advice for what its worth, excluding pensions which is way above my head, is to buy as large and individual a house as you can afford and to pay it off as quickly as possible, larger than you need preferably with space to extend because whatever happens to house prices and the economy in general, when the time comes to sell that house it will always be worth considerably more than one that is more suitable for when you come to retire.

[franglais]

Cant really disagree with anything youre saying there Juddian. The experts tell us that housing prices can fall, but so can ALL investments. And with the population rising and no-one building houses the market aint gonna fall anytime soon. Public sector pensions are no longer the attraction for new recruits they once were. Oh, except for senior civil servants and MPs as you point out. And why is it that high earners, and senior executives get big pensions paid for them on top of salary, when its the lower paid, with no spare cash they need help who receive nowt? But maybe that`s just me being cynical and selfish, so unlike our magnanimous political and industrial leaders.

[rjan]

Juddian:
The problem with pensions is that for most people the results are so far away from the planning stage and too many fingers can dip into the pie over the decades.
From snake oil salesmen overselling the product in the first place to thieving swine filching the funds and then disappearing ‘overboard’, to snot gobbling chancer chancellors raiding the funds, and a myriad of other scenarios along the way, you do not know what you will actually receive till the time comes, and thats if you manage to stay in the same job long enough to reap the benefits.

The days of golden final salary pensions is over for mere private sector working class folk, you would not believe what those in better jobs, both in private but mainly in the public sector have to look forward to, even now, those in the public sector and yes especially MP’s, it matters not what happens to theirs they’ll just add to council or income or any other tax to make up any shortfall.
The rest of us are in a lottery.

My advice for what its worth, excluding pensions which is way above my head, is to buy as large and individual a house as you can afford and to pay it off as quickly as possible, larger than you need preferably with space to extend because whatever happens to house prices and the economy in general, when the time comes to sell that house it will always be worth considerably more than one that is more suitable for when you come to retire.

The house may not be worth any more - it may be worth the same as you paid if you buy at the top of the market today (and the market holds up, there having already been one round of defaults and crisis across the Western world). There’s also a political danger that something may be done about house prices in the time between purchase and retirement. Really, this logic is 20 years out of date.

In practice any increase is also little different from picking your own children’s pockets. The people paying for the increase will be your own children. And if you have any concern for them, what you gained on the market will probably be lost again on subsidies to your children and grandchildren (unless all your descendants, and their partners, are all going to live in the same house from now on, and your house doesn’t get carved up by divorce or care fees or IHT or all the other risks).

There is no reliable solution for individuals in the market - the market isn’t designed to give the majority secure retirement incomes. We have already had the verdict of the market in this respect, with many private sector schemes in crisis and every private sector defined benefit scheme now closed to new members, and people are still scrabbling around pretending they have found the recipe for mass market success (or at least, the masses all think they have found the recipe for their own individual success).

As I say, the only market success that some people have had with housing, is to pick the pockets of renters and homebuyers - maybe that makes sense, until you realise your own children are the very renters and homebuyers now disadvantaged by the market. Only a very small minority of homeowners, who moved early and moved big into buy to lets when they were cheap, will be better off today - the majority of society will be worse off as the game of Monopoly plays on.

That’s always the trick of the market - it eventually finds something about which you aren’t willing to accept an adverse market verdict (like your children’s livelihoods), and then gives an adverse verdict! And unlike Abraham who proposed the sacrifice of his son, God does not intervene at the last minute to rescue the market faithful.

The only solution (as it has been for most of the 20th century) is for there to be state pensions which are backed by the power of taxation, and that secondly requires today’s workers to bequeath a stable and healthy economy to the next generation which is capable of being taxed to pay for their retirements.

[juddian]

Jesus wept, i didn’t need a lecture from the Nu Lab rep on the forum.

I couldn’t give a flying f whether my house goes up or down in value, unless i sell up completely and go live in a tent its irrelevant.

To re-iterate for those hard of hearing, if you buy and live in a larger house than you need or one set in position or grounds that can be extended or sold for further building…as the hordes of incoming migrants will have to live somewhere for free subsidised by us so building regs etc will increasingly go out the window except in the Chipping Norton, Islington and equivalent belts where there is a dearth of asylum seeker centres for some reason …then when you come to retire that large house can be sold and a smaller more manageable house suitable for you as working class pensioner can be bought and you have the difference in prices as an additional income.

Sod me its like drawing teeth round here sometimes.

Yes i know house prices can go up and down , i’ve owned a house since 1975/6 so have lived through few booms and busts under the ‘‘leadership’’ of both worthless mainstream parties and the bunch of weirdos led by Cleggy who aided and abetted the tories last time.
But whether the current price is twice what it should be or half what it should it will still be worth twice what the equivalent house worth, surprisingly, half as much at the same point, will be, comprende?

House prices are artificially too high anyway, in no small way thanks to at least 5 million more people living here than should be.
Also the interests of my children and grandchildren in this country have been squandered and given away by successive traitors elected by fools over the last 40 years, and millions of good men and women who died to prevent exactly this can be heard stirring in their graves because of it.

[franglais]

Rjan "The only solution (as it has been for most of the 20th century) is for there to be state pensions which are backed by the power of taxation, and that secondly requires today’s workers to bequeath a stable and healthy economy to the next generation which is capable of being taxed to pay for their retirements. " … quote…

In an ideal world maybe. All pay in, no excessive profiteering, and all take out.
But consider when the state pension was set up
Schooling 5yrs to 15yrs. Work 15 or so up to 65yrs. Retirement to death 5 or 10 years. And now?
Schooling 5yrs to20yrs? Work 20 to 67yrs? Retirement to death 10 20 or 30 years?
Any body in favour of 50% or more taxation? It may very well be the best solution, but no parties are brave enough to suggest it.
All politicians seem in a race to the bottom , promising lower taxes, but also complaining about poor roads, bad pay for doctors and nurses, teachers etc. Next time a Chancellor promises lower taxes and higher spending Im sure theyll win support as so many seem to believe what they want to hear.
Higher efficiencies some say? Easy ! Dispense with unproductive members of society. Job done. ( n.b. that aint a serious suggestion). No, Im not offering any fixes. But Im not volunteering myself as a politician either. Remember for every difficult problem a politician will offer Quick Easy Cheap Solution. . . And its always Wrong.

[bluey_circles]

Juddian:
I couldn’t give a flying f whether my house goes up or down in value, unless i sell up completely and go live in a tent its irrelevant.

To re-iterate for those hard of hearing, if you buy and live in a larger house than you need or one set in position or grounds that can be extended or sold for further building…as the hordes of incoming migrants will have to live somewhere for free subsidised by us so building regs etc will increasingly go out the window except in the Chipping Norton, Islington and equivalent belts where there is a dearth of asylum seeker centres for some reason …then when you come to retire that large house can be sold and a smaller more manageable house suitable for you as working class pensioner can be bought and you have the difference in prices as an additional income…

If your retirement plan is based around downsizing to a smaller property then you should be very concerned with house prises. Downsizing to a house of half your present value is going to give you a lot more money if it is worth 500k then 100k.

The truth is no one any where knows what the best plan is to secure your old age. so you need lots of eggs in lots of different baskets, have an ISA, own a house, pay into a pension, retrain so as you can keep working doing something into your 80s. you need a plan for where the money is going to come from

But one thing is for certain you should be doing something, as life expectancies continue to rise and society becomes less caring, then you will need to be able to stand on your own two feet for longer and longer - I don’t see the state pension staying at 67, and will you still be able to hack out 60 hour weeks tramping into your 70s ?

[roymondo]

There are still potential problems with the BFO house as a pension pot approach though. What happens if (say) a dirty great sinkhole opens up in the street, immediately rendering your house pretty much unsaleable (or at least, hugely reducing its value), or a major change in Government direction leads to a left-wing “bash the property owners” approach to taxation (or even sequestration of property?). Property ownership also may not suit everyone - e.g. those with chaotic personal lives or whose income is a bit on the volatile side.

Anyway, back to the subject of company pension contributions - I’ve dug out the information regarding my previous employer’s scheme, which I joined at the end of 2009 and was a member for six years before the current lot took over. During that six year period, deductions from my salary amounted to £9580 (although tax relief meant my take-home pay was only reduced by about £8000). My employer contributed £13480 on top of that (“free money”, if you like). According to the latest benefits statement, my fund is currently worth £29,000. So, by foregoing £8k from my salary, I have ended up with a pension pot of £29k. Had I put that money away in a cash ISA or similar, my pot would be maybe £9k. No-brainer really.

[juddian]

Bluey Circles:

Juddian:
I couldn’t give a flying f whether my house goes up or down in value, unless i sell up completely and go live in a tent its irrelevant.

To re-iterate for those hard of hearing, if you buy and live in a larger house than you need or one set in position or grounds that can be extended or sold for further building…as the hordes of incoming migrants will have to live somewhere for free subsidised by us so building regs etc will increasingly go out the window except in the Chipping Norton, Islington and equivalent belts where there is a dearth of asylum seeker centres for some reason …then when you come to retire that large house can be sold and a smaller more manageable house suitable for you as working class pensioner can be bought and you have the difference in prices as an additional income…

If your retirement plan is based around downsizing to a smaller property then you should be very concerned with house prises. Downsizing to a house of half your present value is going to give you a lot more money if it is worth 500k then 100k.

The truth is no one any where knows what the best plan is to secure your old age. so you need lots of eggs in lots of different baskets, have an ISA, own a house, pay into a pension, retrain so as you can keep working doing something into your 80s. you need a plan for where the money is going to come from

But one thing is for certain you should be doing something, as life expectancies continue to rise and society becomes less caring, then you will need to be able to stand on your own two feet for longer and longer - I don’t see the state pension staying at 67, and will you still be able to hack out 60 hour weeks tramping into your 70s ?

Yes that very true, i think we all expect the retirement age to rise to 70 whatever happens, i didn’t mean to convey oversizing/downsizing as the only method for having enough funds for old age, but its one that up to a point wide boys and the govt haven’t found a way (yet) of stealing your money before you get it, you’re living in the investment and even as bad as Britain is getting they haven’t got round to throwing owners out to house more needy migrants, give them time though.

The ones who are going to find it hard are those still paying rent when they retire, and its not just the cost its having no control over where they put you as your health deteriorates and the country grows ever more unpleasant.

[bluey_circles]

Juddian:
Yes that very true, i think we all expect the retirement age to rise to 70 whatever happens, i didn’t mean to convey oversizing/downsizing as the only method for having enough funds for old age, but its one that up to a point wide boys and the govt haven’t found a way (yet) of stealing your money before you get it, you’re living in the investment and even as bad as Britain is getting they haven’t got round to throwing owners out to house more needy migrants, give them time though.

The ones who are going to find it hard are those still paying rent when they retire, and its not just the cost its having no control over where they put you as your health deteriorates and the country grows ever more unpleasant.

Little surprise that the gov initiative to get people saving towards their future hinges around investing in equities, lets keep the city wide boys wealthy with our hard work - difficult to slide a cigarette paper between bankers and politicians.

And I totally agree anyone retiring whilst in rented accommodation are going to be really stuffed, rent will eat up most of the state pension, they will be lucky to have enough left over to eat and keep warm. But how do young people get onto the housing ladder, it seems impossible for them these days, society seems to be more cut-throat now than ever before.

[conor]

Bluey Circles:

Little surprise that the gov initiative to get people saving towards their future hinges around investing in equities
[/quote]
Some epic level ignorance there. All pension funds invest in equities, stocks, shares etc. Most of those shares sold to the City when the Post Office and the like were privatised? They went to investors running pension funds.

And I totally agree anyone retiring whilst in rented accommodation are going to be really stuffed, rent will eat up most of the state pension, they will be lucky to have enough left over to eat and keep warm. But how do young people get onto the housing ladder, it seems impossible for them these days, society seems to be more cut-throat now than ever before.

Again more bollox. Housing benefit of some sort will exist for those with little money in retirement. Not everywhere is like London when it comes to house buying. Hell my 21 year old son can afford to buy a house similar to the 3 bedroom one he’s currently renting. In fact taking his and his partners joint income they can afford something like this. And unlike when I was looking to buy when I was his age the interest rates aren’t so high that 3/4 of his pay will go on paying the mortgage.

[rjan]

Juddian:
Jesus wept, i didn’t need a lecture from the Nu Lab rep on the forum.

New Labour ha!

I couldn’t give a flying f whether my house goes up or down in value, unless i sell up completely and go live in a tent its irrelevant.

To re-iterate for those hard of hearing, if you buy and live in a larger house than you need or one set in position or grounds that can be extended or sold for further building…as the hordes of incoming migrants will have to live somewhere for free subsidised by us so building regs etc will increasingly go out the window except in the Chipping Norton, Islington and equivalent belts where there is a dearth of asylum seeker centres for some reason …then when you come to retire that large house can be sold and a smaller more manageable house suitable for you as working class pensioner can be bought and you have the difference in prices as an additional income.

Sod me its like drawing teeth round here sometimes.

But the defect in your cockamamie scheme is that, if prices remain the same, then you will, at best, get back out only what you put in. But that is true of a savings account, and unlike a savings account, the final “balance” of the house requires a interest-charging mortgage up front (so you’ll lose money relative to savings, or shares, or gold which can be purchased incrementally without borrowing).

Also, nobody seriously thinks that house prices are going to rise by so much again, because people simply can’t afford bigger mortgages than they already have. They couldn’t afford them last time in fact, which is why many banks themselves folded.

And unless you are nearing retirement already, I wouldn’t bet that nothing is done politically about house prices over decades to come.

Yes i know house prices can go up and down , i’ve owned a house since 1975/6 so have lived through few booms and busts under the ‘‘leadership’’ of both worthless mainstream parties and the bunch of weirdos led by Cleggy who aided and abetted the tories last time.
But whether the current price is twice what it should be or half what it should it will still be worth twice what the equivalent house worth, surprisingly, half as much at the same point, will be, comprende?

No comprende!

House prices are artificially too high anyway, in no small way thanks to at least 5 million more people living here than should be.
Also the interests of my children and grandchildren in this country have been squandered and given away by successive traitors elected by fools over the last 40 years, and millions of good men and women who died to prevent exactly this can be heard stirring in their graves because of it.

Millions died in the wars because they were fools. Those that lived through learned and built a better Europe, but we are seeing that deteriorate as we have returned to pre-War ideologies of free markets and so forth.

[juddian]

Rjan:
Millions died in the wars because they were fools. .

[/quote]
You mate can go to hell.

[rjan]

Juddian:

Rjan:
Millions died in the wars because they were fools. .

You mate can go to hell.

People respect the war dead for various reasons which are subtly different, and one of those is so they can carry on condemning their children to die in the mud, and do so with the approval of their consciences.

[bluey_circles]

Conor:

Bluey Circles:
Little surprise that the gov initiative to get people saving towards their future hinges around investing in equities, lets keep the city wide boys wealthy with our hard work - difficult to slide a cigarette paper between bankers and politicians.

Some epic level ignorance there. All pension funds invest in equities, stocks, shares etc. Most of those shares sold to the City when the Post Office and the like were privatised? They went to investors running pension funds.

I never said they weren’t!
the point I was making was the new initiatives towards getting people to save towards their retirement is the same casino style investment that seems to benefit the city types more than the average bloke doing an honest days work. Why couldn’t the gov have come up with some sort of government backed guaranteed long term investment that would afford lower paid private sector workers with the same certainty in retirement that is enjoyed by the Police, Nurses, Firemen, Council Workers, Civil Servants etc.

Bluey Circles:
And I totally agree anyone retiring whilst in rented accommodation are going to be really stuffed, rent will eat up most of the state pension, they will be lucky to have enough left over to eat and keep warm. But how do young people get onto the housing ladder, it seems impossible for them these days, society seems to be more cut-throat now than ever before.

Again more bollox. Housing benefit of some sort will exist for those with little money in retirement. Not everywhere is like London when it comes to house buying. Hell my 21 year old son can afford to buy a house similar to the 3 bedroom one he’s currently renting. In fact taking his and his partners joint income they can afford something like this. And unlike when I was looking to buy when I was his age the interest rates aren’t so high that 3/4 of his pay will go on paying the mortgage.

I wouldn’t like to think my future was reliant on the generosity of future governments, this last few decades has seen a consistent degradation of our welfare state, it will never be more generous than it is now, we’re on a downhill slope.

Great to see your son and his partner getting onto the housing ladder, but that is massive commitment and something that most young people will not get a chance at. Incidentally me and my wife bought our first house when we were 21, a very basic farm cottage for just under 7K, our joint annual income was about 10K (av house prices at the time was 19K) Buying houses was very doable in the early 80s. Yes interest rates were high but that worked in our favour, prices and wages were rising so fast that what may have seemed a big mortgage at the time soon became something you could just pay off in a oner 5 or 6 years later. I think young people have it really tough now.

[big_truck]

I have a SIPP pension and top up £120month and Gov adds another £30 and been going since 09.
Put in £17k back then and £10k in 2011 and pot is currently worth near £70k.
Rather pleased with that!!!
Will prob take the 25% tax free lump sum at age 60 and “drawdown” the rest over next 10yrs (also have public sector pension commutation tax free lump sum@ 60yrs[emoji41] ) and blow the frigging lot!!!
Still will have a public sector monthly pension plus state pension will kick in around 68/70yrs.
Be happy enough with my lot by then!!!

[big_truck]

Have mentioned them before on the forum:
Google “HargrevesLansdown” brokers.
They have £50BILLION entrusted to them as Investment Brokers so defo aren’t a fly by night dodgey outfit.
They have done well for me over the year if you pick a spread of funds over the globe.
Things are looking half respectable for me to have a long/happy retirement!!!

Can’t wait to buy a 10yr old Jaguar F series convertible and hit the road,
you gotta have dreams!!![emoji56]

[merc0447]

My private pension pot at the moment is 8k a year at 65 then whatever my state pension will be at whatever age I can claim that. Been paying full whack since I was 17 never any breaks in employment so better get the full amount

But I don’t know if that’s enough. 8k don’t seem a lot. Think this new lifetime isa is a good route free money off the government till I’m 50 can’t be sniffed at.

[bluey_circles]

merc0447:
My private pension pot at the moment is 8k a year at 65 then whatever my state pension will be at whatever age I can claim that. Been paying full whack since I was 17 never any breaks in employment so better get the full amount

But I don’t know if that’s enough. 8k don’t seem a lot. Think this new lifetime isa is a good route free money off the government till I’m 50 can’t be sniffed at.

if your house is paid off, an 8K pension on top of your state 5K plus your wifes and I reckon you will be well comfortable.

But don’t believe the predictions as they can fall well short. when I started mine in the late 70s it was predicted (and I still have the paperwork) that I would be able to retire at 55 on an indexed linked 17,500, If I had cashed it in when I was 55 it would have been more like 2K. and even though I have paid in more and will continue until i’m 65 it will still not be anywhere near half of what was originally suggested.

[roymondo]

I think there’s some confusion over terms used here - a “pension pot” is not the amount you can expect to receive each year in retirement. It means the amount you have actually saved (plus interest earned). What you do with it come retirement is up to you, one option being to buy an annuity which will give you an income for as long as you live. To get an £8k annual income from age 65, you’ll need a lot more than £8k in your “pension pot”…

[roymondo]

And State Pension is rather more than £5k per year. For current pensioners it’s just short of £6k, but for anyone reaching State Pension age after April it will (provided they have a full contributions history) be more like £8k.