Mass wake up call needed on level of Pension contributions

csa_monitor

So according to research done by the Pension Policy Institute, there is a huge difference between the totals going into defined benefit and defined contribution schemes.

Looks like anywhere from 20% to 40% of salary needs to be saved for retirement depending on your age when you start.

I wonder how many people in defined contribution schemes understand that if their current total level of contributions for retirement savings do not match those for defined benefit schemes, then there is not a hope in hell of achieving 2/3rd final salary at retirement?

Why don't the government make it mandatory for employers to distribute this sort of info to every employee in the country?

http://www.pensionspolicyinstitute.org.uk/news.asp?p=182&s=8&a=0
http://www.pensionspolicyinstitute.org.uk/uploadeddocuments/BNs/PPI_Briefing_Note_9.pdf

zaksmum

How can any of us ordinary people hope to save 40% of our salary though? I wish....!

nearlyrich

Unfortunately a lot of people are put off pensions because of the dodgy practices etc that have occurred over a number of years. Some people say they are expecting the government to pick up the bill for their retirement as they have believed the tales that if you save you get nothing abut if you squander all your money on loose living you get a fully funded house and enough money to travel the world in your twilight years.

I am late 40's and I started contributing to my pension when I was 19, some years it has shown some big gains and other years some big losses, I have seen the government move my retirement date from 60 to 68 and no guarantee it will be able to afford a pension for me then.

I know most people can't afford to contribute 40% of their salary but I think many people have no plans in place for what could be a long time to live with minimum income. I want to be in a position to enjoy my retirement and so I am taking responsibility for it myself.

dasherman

nearlyrich wrote: »

I am late 40's and I started contributing to my pension when I was 19, some years it has shown some big gains and other years some big losses, I have seen the government move my retirement date from 60 to 68 and no guarantee it will be able to afford a pension for me then.

If you're in your late 40's then your state pension age is between 65-66,depending on exactly when your birthday is.

http://www.pensionsadvisoryservice.org.uk/state_pensions/spa_calculator/

nearlyrich

dasherman wrote: »

If you're in your late 40's then your state pension age is between 65-66,depending on exactly when your birthday is.

http://www.pensionsadvisoryservice.org.uk/state_pensions/spa_calculator/

Thanks for the calculator, I had been misinformed....
It's 66 so they only ripped me off by 6 years LOL , what private company would get away with that as a swindle? I am planning to be work free and self suficient long before then though!;)

Kez100

I do think dodgy practices and not knowing who you can trust makes ignoring the situation easier. The banks letting us down doesn't make it any better. I was watching a Nat West advert about advice the other night - I could have spat in my coffee. I'm afraid it is going to take a very long time for people to trust them again.

I am personally thinking of really going for it while the stockmarket is pretty low. At least I may stand a chance of making some headway on my meagre pot. I don't know who to trust though but would have to start by topping up the stakeholder that I have.

dunstonh

I do think dodgy practices and not knowing who you can trust makes ignoring the situation easier.

I think "dodgy practices" is just an excuse. Pension mis-selling stopped in 1993 and despite it being an significant issue, it still only hit a minority of people. To be throwing out that as a reason 16 years on is easier than paying as you say.

Andy_L

nearlyrich wrote: »

I know most people can't afford to contribute 40% of their salary but I think many people have no plans in place for what could be a long time to live with minimum income. I want to be in a position to enjoy my retirement and so I am taking responsibility for it myself.

If you look at the PPI article that 40% is for somebody who starts saving for retirement at 51 & wants to retire at 65 on 2/3rds salary so its a bit of a scaremongering headline

Paul_Herring

dasherman wrote: »

If you're in your late 40's then your state pension age is between 65-66,depending on exactly when your birthday is.

And to emphasise - that's for your state pension - you can take your private pension somewhat earlier if you need to.

nearlyrich

Paul_Herring wrote: »

And to emphasise - that's for your state pension - you can take your private pension somewhat earlier if you need to.

Yes mine kicks in at 55 so not long to go now;)

dobbie82

I am 26 now, my great grandmother died at 50, my grandmother at 52 and my mother at 55... I have to work til I am 68 at least (though I assume this will go up again) so I even if I could afford to start a pension (I can't) I am not sure I should bother!