Half of UK have no pension

savingforoz

dunstonh wrote: »

You forgot the smilie in your post. It appears bendix took your sarcasm seriously

:rotfl:Very good, dunstonh!

The_White_Horse

its ok, the leftie morons will make sure those that didn't pay in will be ok, all paid for by those who did.

the ones who did pay in, may have well wasted the money on booze and fags.

this is the way of the giant ponzi scheme. the !!!!less win and the prudent are punished time after time after time.

pensions should not be compulsory - but if you don't pay in, you should get nothing and be allowed to starve to death. If you make other adequate provisions, well done.

its about time people learned some responsoibility.

the trouble will be in 50 years time, when the decent people having one child, try and pay for the chavs who are pumping 6 or 7 out each, who will all be on the dole.

i predict a riot.

zarazara

bendix many many thanks. Now I have it all in black and white I can confidently choose not to even try to start a pension. And try to explain it to my very good friend who earns £15,000 a year. she puts £100 a month away, matched by her emplyers [the council]. I keep telling her its pointless, she 'll be ok with the basic state pension and social security top ups and that she might as well enjoy the money now or put it into an ISA for a treat.
If you dont earn much its pointless trying to get a quart out of a pint pot all the time.

zarazara

dunstonh , it was a genuine enquiry.

jem16

zarazara wrote: »

dunstonh , it was a genuine enquiry.

I think he knew that hence the smilie at the end of his post.

MikeJones_2

Hi zarazara,

zarazara wrote: »

...And try to explain it to my very good friend who earns £15,000 a year. she puts £100 a month away, matched by her emplyers [the council]. I keep telling her its pointless, she 'll be ok with the basic state pension and social security top ups and that she might as well enjoy the money now or put it into an ISA for a treat.

If your friend works for the local council then there's every chance she might be a member of the Local Government Pension Scheme (LGPS).

If she is, what the LGPS provides is a defined benefit pension scheme which is entirely different to a money purchase pension such as a personal pension plan - which is what much of this post has referred to.

It's a bit like comparing apples with pears.

For example, if your friend is indeed a member of the LGPS she will not only be entitled to a pension, but her spouse and dependants will have benefits payable to them if she dies either before or during retirement (subject to meeting their criteria).

Her pension benefits will be based upon her period of pensionable service and her final salary (actually 'final pensionable salary'), two of the element used in the scheme's formula to calculate her pension.

However, a money purchase pension doesn't work like the LGPS. A money purchase scheme is based upon:

your contributions plus (any contributions your employer makes) plus investment returns minus charges

You build up a 'pot' of money within the money purchase pension 'container' from which you take your cash lump sum (if you choose to take one) and buy your pension.

So, don't rush to tell your friend to stop contributing to her pension. If she is in the LGPS, she won't thank you when she reaches retirement age if she follows your advice now.

Hope that helps.

Mike

I work in the field of Pension Education and Pension Guidance in the UK. I am a member of the Specialist Pensions Forum as well as being a Voluntary Adviser for The Pensions Advisory Service. I work with scheme members, employers, trustees, scheme administrators and advisers on most things to do with employer sponsored pension schemes. The views expressed by me in this thread are my personal opinions. You should seek professional advice from an appropriately experienced and qualified adviser. I am not an IFA.

zarazara

yes it certainly does help. I'll get her to have a read of this thread. Many Thanks.

dunstonh

dunstonh , it was a genuine enquiry.

oh. Sorry. I thought you were joking when you wondered if £30-£50pm contributions could be turned into an income of £1250pm (especially given the comments earlier in the thread).

I keep telling her its pointless, she 'll be ok with the basic state pension and social security top ups and that she might as well enjoy the money now or put it into an ISA for a treat.

You do realise that even with the pension credit top up, that will only take you to around £7000 a year. She has an excellent pension scheme and would be a fool to pull out of it. Rather than tell her to plan to be poor, you should be encouraging her to plan to be comfortable.

If you dont earn much its pointless trying to get a quart out of a pint pot all the time.

Its not a case of not earning much. Its a case of being realistic with the contribution. You have 18 years of contributions. You are likely to live 20 years after that. So, paying £30pm for 18 years is £6480 of contributions. You cant turn that into £15000 a year. If you had started at £30pm net at age 18 and increased it with inflation annually to keep it up in real terms then you could actually end up on £15000 a year but not at your age.

jamesd

zarazara wrote: »

I have about £30-£50 a month left over if I budget carefully. I am 48 yrs old. I will get the state pension at 66. Is there anyway I can invest this to get a pension of £15,000 pa after tax when I retire?

Assuming you're female, which produces a lower payout because you'll live longer on average, want an annuity that doesn't increase with inflation (so it slowly decreases over time), don't want some to be paid to a spouse after you die and don't want a guarantee that it'll be paid for any time after your death here are some numbers:

£50 a month at 7% growth before inflation could produce £81 a month.
£50 a month at 9% growth before inflation could produce £118 a month.

For a man likely to live less long:

£50 a month at 7% could produce £87 a month.
£50 a month at 9% could produce £124 a month.

So depending on how well the investments do and whether you're male or female each 50 you contribute could produce between 81 and 124 a month. The first couple of thousand of this would be tax free and all of it would be free of NI.

For your target of £8,000 plus the state pensions that's from 268 to 411 a month.

Now, I live quite reasonably spending around £12,000 a year, about 5,000 more than the state pensions. If you were to use that as a target the contributions to get the £5,000 above the state pensions would be from £167 to £256 a month.

To get these numbers I used the Hargreaves Lansdown pension calculator with date of birth 07-04-1961 and adjusted the advanced options to remove index linking, spousal pension, guarantee and vary the growth assumption. Long term returns from the UK markets have been around 12% before fees and inflation.

nickj_2

a lot of people are stuck - the cost of living is so high in this country now , they need every penny thay have , when you hear that you need to save 3 or 400 a month to get a half decent pension , who actually has that sort of cash spare