Life Expectancy and Pensions

singhini · 8 March 2018 at 11:45PM

I was watching "daily Politcs" today on BBC2 and it included an article on Life expectancy. In short it stated that life expectancy varied around the UK and in particular male life expectancy was 68.2 years in Bloomfield in Blackpool (the shortest) and male life expectancy in Knighsbridge / Belgravia was 89.1 years (the longest) [figures taken from Daily Politics as shown today on BBC2 8th March 2018].

That made me think, whats the point of sticking money into my pension if im going to be dead at around 78 years old (average of the 2 figures stated above). i feel that im gonna die and the vast majority of my pension money will be stuck in the pension.

I feel there are too many restrictions on pensions i.e. if you want to consolidate them you need a FA who charges money, if you try to take too much money out you might face tax, you cant have your money when you wany but approx 10 years before state pension age (which seems to constantly go up) etc.....

i think the daily politics show based their news report on this article which also highlighted that life expectancy in some areas had started to actualy go down (more can be found here http://www.bbc.co.uk/news/health-43317918)

Why are we allowing our governments to indenture us into pension slavery and torture with our own private pensions, surely we should be allowed to take our private pension when we want and with no restrictions (why this arbitrary figure of 10 years before state pension age, why cant it be aged 50 onwards).

I then found this aticle which seems to suggest that the average person is no better off with a pension than being on state benefits (https://www.lovemoney.com/news/16879/pension-saving-benefits-flawed)

What do others think?

davieg11 · 9 March 2018 at 12:30AM

The life expectancy for my area is 75.4 years. I'm saving into a pension, so that, when I can access it at age 57, I'm going to retire and have some freedom before I die. There is not many restrictions on pensions and you only need an IFA for a transfer of a final salary scheme. I won't pay any tax either. I'll get 25% tax free, then with the tax free allowance plus marriage allowance by the time I'm 57 I should be able to lift £15k per year tax free until state pension kicks in. I'm also getting 32% tax relief on all money I put in, plus a free 10% from my employer. It's a win win situation no matter how you look at it. I'm pretty sure that's much better than any benefits you may or may not get!

Brynsam · 9 March 2018 at 12:36AM

What are you planning to live on when you retire? What makes you think there will be any state benefits?

Annuity rates take life expectancy into account. Some insurers take your postcode into account, too!

badmemory · 9 March 2018 at 1:59AM

I don't care how long THEY think I am going to live. To quote Clint Eastwood in one of "those" movies - do you feel lucky? THEY think I will only live to 85ish. I am an obstinate SOB so looking at dragging it out to 95 (OK then 90) but there is no way they are going to win this one!

The way we retire & how we retire & our choices when we retire are ours and ours alone & that can be difficult after being employed for many, many years & doing whatever asked whenever asked. I think this is why life expectancy for some is low

dunstonh · 9 March 2018 at 2:16AM

That made me think, whats the point of sticking money into my pension if im going to be dead at around 78 years old (average of the 2 figures stated above). i feel that im gonna die and the vast majority of my pension money will be stuck in the pension.

yet over half the people in the UK are expected to live into their 90s now.

What makes you think the money will be stuck in the pension?

I feel there are too many restrictions on pensions i.e. if you want to consolidate them you need a FA who charges money, if you try to take too much money out you might face tax, you cant have your money when you wany but approx 10 years before state pension age (which seems to constantly go up) etc.....

You dont need an FA unless you have safeguarded benefits over 30k.
You get tax relief in on whole amount but its only taxable on 75% on the way out.
You can have the money when you want after age 55.

I then found this aticle which seems to suggest that the average person is no better off with a pension than being on state benefits

Im not even going to bother reading it as its going to be rubbish if it is telling you that. However, please explain how someone on benefits getting paid £10k a year is better off than someone with pensions getting paid £20k a year?

Theta101 · 9 March 2018 at 3:08AM

Im not even going to bother reading it as its going to be rubbish if it is telling you that. However, please explain how someone on benefits getting paid £10k a year is better off than someone with pensions getting paid £20k a year?

I've seen this £20K figure somewhere else but couldn't understand how it's made up.
It seems far too high for the "average retirement income". I assume it's for an individual and not a couple.

I've also seen that the average pension pot is £50K.

The 2 figures just don't make sense.

PeacefulWaters · 9 March 2018 at 5:54AM

Your research is horribly narrow.

Lungboy · 9 March 2018 at 8:15AM

PeacefulWaters wrote: »

Your research is horribly narrow.

And out of date. That Lovemoney article is 5.5 years old and is talking about the old system.

Triumph13 · 9 March 2018 at 8:44AM

singhini wrote: »

I then found this aticle which seems to suggest that the average person is no better off with a pension than being on state benefits (https://www.lovemoney.com/news/16879/pension-saving-benefits-flawed)

What do others think?

To save anyone bothering to read it, that article was from 2012 before the introduction of the single tier pension and highlighted one of the problems with the old state pension that a small private pension income just stopped you getting pension tax credit. The April 2016 changes deliberately targeted this problem by setting the new single tier pension at the pension credit level to ensure this problem no longer arose.
Individuals receiving housing benefit may still have an issue where a large percentage of pension income gets clawed back in reductions to housing benefit. If you are in this position do you think it's unreasonable that you be coerced into saving money whilst you are working so that other taxpayers don't have to pay all of your rent went you are old?

Silvertabby · 9 March 2018 at 10:08AM

Longevity is determined by genes, lifestyle and luck - not your post code.

System · 9 March 2018 at 10:22AM

Silvertabby wrote: »

Longevity is determined by genes, lifestyle and luck - not your post code.

Post code is an easy and approximate short-cut to other factors:

Genes - to the extent that there is say a North/South genetic factor, this might have some correlation

Lifestyle - strongly related to post code, surely?

Luck - luck's what you make it, and educated people in good jobs in nice areas in nice climates have more luck

Life Expectancy and Pensions

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