Half of UK have no pension

bendix

Pobby wrote: »

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.

I think the problem with many who have tried to retire overseas is that they don't plan properly. They see somewhere is cheaper than here,and then bring forward retirement plans BEFORE they have adequate resources. I saw that so often in Thailand where guys budgeted on the a low income when the exchange rate was 75, and are now hurting that it is in the low 50s.

I think the golden rule for planning to retire overseas is work out what it would cost to live now, then double it. And then double it again.

I could retire to Thailand today and have an ok lifestyle - golf, a house paid for, a car etc. It would cost around £1200 a month. I'm not even thinking about it until I have enough to generate three times that amount.

dunstonh

The basic state pension is £5000 a year. The second state pension can take employed individuals (not self employed) to around £8000 on maximum qualification (if starting out today - older people can get closer to 10k but its not possible for younger people to make that figure). The typical average is around £7000 if you include both. Even if you dont get Second state pension, if you are on means tested benefits then the pension credit will take you to around £7000 as a single person. Hence the references to £7k

Harry_Powell

dunstonh wrote: »

The basic state pension is £5000 a year. The second state pension can take employed individuals (not self employed) to around £8000 on maximum qualification (if starting out today - older people can get closer to 10k but its not possible for younger people to make that figure). The typical average is around £7000 if you include both. Even if you dont get Second state pension, if you are on means tested benefits then the pension credit will take you to around £7000 as a single person. Hence the references to £7k

Brilliant, the young get stiffed again by the old. Given that people of my parent's generation have had windfalls from the sale of public companies, have benefitted from final salary pensions from these same (former public) companies before they were broken up, had windfalls from mutuals and building societies becoming Ltd companies (which then failed for the most part) have had decades of pension funds that weren't subject to tax raids from Gordon Brown, have had decent annuity rates, received a completely free university education, affordable housing, etc. etc. it's a little condescending for them to then look down from their mighty perch on the following generation and say how short-sighted we are not to make pension provision. :mad:

bendix

Hooray. Somebody at last has dared to say the unsayable (and what I've been thinking for a long time).

With the greatest of respect, those in the 50-80 age range have a lot to answer for.

jamesd

Harry_Powell wrote: »

Brilliant, the young get stiffed again by the old.

It's because the S2P contributions are now loaded in favour of those with lower earnings. Those on lower earnings get more than they used to, those on higher get less. Long term the plan is to make S2P flat rate so it doesn't matter how much you pay in, you get the same amount out. But you still will pay in more as you earn more. So it will become a form of income tax on those of average and above average earnings to pay for more pension for those on lower earnings.

If it changes in that way it's clear that everyone on average or above income would contract out because they could get a pension related to their earnings and contributions. So contracting out is being abolished.

The current retired generation has a lot more people paying NI and taxes to pay for their pension payments than those starting to retire now will have, since the generation after the baby boom is smaller. Lots of baby boomers retired, fewer children and grandchildren to pay taxes, so there's a problem. Increasing life expectancy due to better health care makes that problem worse, since the state pension no longer pays out for just the two or three years a lucky and healthy 65 year old might have expected when it was introduced.

Evening out the retirement ages between men and women, who live longer, and then making both later is one way to try to reduce the problem, delivering more working years paying taxes and fewer years being paid the pension before dying.

Those on the tail end of the baby boom generation, in their mid 40s now, are most at risk of problems, since by the time they retire the baby boom retired population will be at its highest and the tax payers at the lowest proportion of the total. Increasing taxes on baby boomers before they retire, starting as soon as possible, and investing that instead of spending it, is one thing that might help but isn't being done.

dunstonh

For those earning above £4680 and no more than £13500, the theoretical maximum pension for S2P using 08/09 rates was £3528 a year

(Lower Earning Threshold (LET) -Qualifying earnings factor (QAF)) x40% = theoretical maximum

(13,500-£4680) x40% = £3528 (using 2008/9 rates)

2009-10 sees a new upper accrual point (UAP) of £770 a week (£40,040p.a.). The UAP will not increase at all in subsequent years. This is unlike the Upper Earnings limit which did increase (stealth tax?)

The move to flat rate will not be fulling completed until around 2031/32 as that is when LET is likely to match the UAP. It is estimated that those earning under £31,100 a year will be better off with S2P than SERPS based on current figures.

EdInvestor

dunstonh wrote: »

The basic state pension is £5000 a year. The second state pension can take employed individuals (not self employed) to around £8000 on maximum qualification (if starting out today - older people can get closer to 10k but its not possible for younger people to make that figure).

One needs to bear in mind that SERPS was only introduced in 1978 so it is only people who retired from around 10 years ago with a full SERPS record who could get 10k - and these people would need to have been in full employment all their lives at an above average wage.

Also, many people were targeted by the financial servoices industy and sold pensions in the late 1980s which have turned into zombies. These people will have only 10 years' worth of SERPS, and the pittance their zombie pension will pay is unlikely to match the full SERPS return.

Nevertheless, going forward most retirees will get a state pension that puts them above benefiits (pension credit) level.This should reduce costs to the younger generation as the 'passporting' to housing and council tax benefit won't apply.The rise in home ownership among this generation compared with its predecessor is another plus point as is the larger number of women with pension provision.

Richer pensioners also contribute to the economy.Consumption after all makes up 70% of the economy these days and that's what pensioners do.They also save and invest. Many of them contribute vastly through looking after aged relatives or grandchildren at no cost to the Government or to younger families.

You need to look beyond the raw figures on no.of workers vs. no of pensioners.For a start, many pensioners work, and many young people don't work.The issue is more complicated than it looks.

zarazara

what a mess

jamesd

Look on the bright side: it's partly a mess because people are living longer.

Harry_Powell

The government should allow fag advertising and public smoking again, stop harping on about obesity and halt all anti smoking and alcohol strategies. That'll sort out the pensions crisis, though it's a shame about what it'll do to the NHS.

Swings and roundabouts.