Half of UK have no pension

dunstonh

nickj wrote: »

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

You only need to pay £300-£400pm if you have left it very late. As already mentioned, figures of £50pm are fine in your 20s, as long as you index link them.

If you think the cost of living is high whilst you are earning, then just begin to think how high its going to be when you aren't.

My last 5 regular premium pensions are £500pm, £800pm, £500pm, £300pm, £100pm. Only one was earning over £50k a year. You prioritise what is important to you. The cost of living doesnt need to be high unless you spend a lot or borrow a lot.

jamesd

nickj wrote: »

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

This time I used 7-4-1984 as the date of birth, for a 25 year old retiring at 68 years old state pension age, same other options.

Each £50 a month could produce a monthly pension of:

For a man at 7%: £340
For a man at 9%: £671

For a woman at 7%: £316
For a woman at 9%: £634

So between six and thirteen times the monthly payment if you start much earlier. Or for a man at 9% growth, that's a £15,000 target met with just £50 a month once you add in 7k of state pensions. If the employer matches contributions that could be half as much in real cost.

The difference between 7% and 9% is due to the longer time and it's also part of why younger people are usually advised to take more risky investment options, since it can make a huge difference while there's still plenty of time to go.

bendix

I find it terrifying that people use the 'the cost of living is too high' argument to justify not contributing to a pension.

It simply isnt a valid excuse, and it makes me wonder what goes through their head when they think about the future.

Cancel the Sky subscription. Don't buy Hello magazine. Dont go on holiday. Whatever it takes, realign your spending / saving balance.

The simple fact is you MUST save for retirement because if you don't you are condemning yourself to a life of poverty and misery in future life. It is NOT a problem that is going to go away.

Pobby

Question please. I am seeing the figure of £7,000 p.a as the stated basic pension. I didn`t think that it was that high. As I recall I had a quote that the government was going to give me £90 ( full qualifying years ) plus an additional £ 30 in serps, I think that was about 3 or 4 years ago.

MikeJones_2

Hi Pobby,

Pobby wrote: »

As I recall I had a quote that the government was going to give me £90 ( full qualifying years ) plus an additional £ 30 in serps, I think that was about 3 or 4 years ago.

Basic State Pension (per week from 9 April 2009)

Based on your own or your late husband’s, wife’s or civil partner’s NI contributions - £95.25

More details here:

- The Pension Service - State Pensions - How much will I get?

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.

bendix

dunstonh wrote: »

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

On the contrary. It appears I was right :rolleyes:

bendix

Pobby wrote: »

Question please. I am seeing the figure of £7,000 p.a as the stated basic pension. I didn`t think that it was that high. As I recall I had a quote that the government was going to give me £90 ( full qualifying years ) plus an additional £ 30 in serps, I think that was about 3 or 4 years ago.

The fact is, it's impossible to guarantee what the amount will be. As such, I'd advise people to completely ignore it and pretend it doesnt exist. It doesnt form any part of my planning and as i will be overseas by then, I will likely not even bother to draw it.

Best to make your own provisions!

Pobby

Thanks Mike. So it looks like from that date I will get £125 and my wife £115. So that`s a joint £12,480 per annum. On top of that we have a mix of pensions, 2 company, 2 current and 3 " paid up ". We have had various ups and downs with our finances so they won`t amount to a great deal. According to Norwich Union they might amount, in total to around £5,000 as joint annuities.

On the other hand, we have substantial amounts in cash, isa and investments which should total, if nothing goes wrong, about £150k or hopefully a little more at the time of retirement, just under 5 years.

I had thought about using this as a " draw down ", both interest and capital, the kids can have the house, lol!

Basing my calculations, over 300 months, to my age 90, at 5% I would be able to take in income around £874 a month ( inflation not factored in ). This would give us a substantial amount, far more than we would ever spend but as we all know, from bitter experience, at .5% interest, that plan is not workable.

So it`s back to the drawing board to figure out just how to make it work.

My figures and calculations that we would need £50 a day to live a very comfortable life style. We are of a fairly frugal nature, flash cars and holidays really don`t do it for me and the thought of spending £40 in the pub at weekends fills me with horror lol.

Pobby

bendix wrote: »

The fact is, it's impossible to guarantee what the amount will be. As such, I'd advise people to completely ignore it and pretend it doesnt exist. It doesnt form any part of my planning and as i will be overseas by then, I will likely not even bother to draw it.

Best to make your own provisions!

Well if you are not bothered in drawing it, I will do it for you, lol.

That was our plan to live overseas and maybe keep a caravan here or the like. We have friends in Spain and so many are now are wanting out. In a recent e-mail from there I am hearing that nothing is selling in the Valencia area. Food costs are rocketing and I was surprised at fuel costs when I was there a year ago.

I am being told that housing in that area has dropped between 30 and 50%, hard to believe isn`t it? Oh, and rumours abound that there are going to be massive hikes in the community charge.

It was perfectly possible for someone living on a state pension could live quite well their. My friends, are living on a real shoe string, income about £120 a week and any odd jobs they can get and they are not plentiful.

So again it`s back to the drawing board for us.

zarazara

many thanks once again for all the ifo especially the pension calculator. I have inputted some fogures and decided that for me and my husband theres no point [sadly] this is because there is no employers contribution and the figures show we would get less out than we paid in! So might as well save up a bit in an ISA.