Pensions

chucknorris

Andy_L wrote: »

Assuming its not using an RPI increasing annuity, which seems unlikely, I suspect it's because:
"it still took a further 26 years for the pension to catch up with the non pension investment (by catch up I mean become worth more than the capital of the non pension investment)."

So he's not taking capital out of the ISA & can only spend the interest. ATM that means ~1/2%? for cash (unless you take stockmarket risk in which case its an apples & oranges comparisson) whilst you're getting 5%ish on a level annuity. It's likely in that case you'd have to dip into your capital which means the pension catches up quicker, or have a worse standard of living than the annuity taker

You've got the gist of it except that I would not be spending the interest either, I would be letting it role up because I do not 'need' the pension nor the interest from the non pension investment, it would just be an investment and I would not be dipping into it.

What I learned from looking at it was that despite the huge edvantages of a pension pool growing quickly the annuity is a very poor product as an investment, but of course I understand why, it is because it is a product to provide a certainty of income. It is not that bad really as it does catch up after year 27 it does move into 'profit' compared to the non pension.

abaxas

ninky wrote: »

it misses the crucial question 'what age do you intend to die'?

it also assumes that you have some level of disposable income which, as pastures points out, is not always the case.

Wouldnt the solvency of the pension fund be much more important? Especially as we move into a time when more are taking out than putting in.

kabayiri

Old_Slaphead wrote: »

Yes, down about 10% (mainly due to Govt's QE)

Yes it is a key factor

Thanks. It's useful to know.

I'm one of those who finds it difficult to predict where I'll be / what I'll be doing in 5 years, never mind 20+ years.

On the discussion of investments, there are other options than what we have discussed, arent there?

A couple of years back I had to lend my sister who is abroad some money. It helped her out and she is in a position to pay it back to me, plus a small bit for the hassle etc.

However, in this time the pound has devalued by a significant amount against her currency. So I will in effect get more pounds for my investment, so to speak.

If I had tied that money up in pension (AVC perhaps) I would have not been able to help.

Pobby

CLAPTON wrote: »

so a weekly income of 130 is

-a yearly income of 6,760
plus you would get council tax paid ... say 100 per month = 1200 per annum
plus rent at lets say 600 per month i.e. 7,200

so if you were earning you would need 15,100 take home

which equates to about 19,000 per annum

how much do you earn at the moment?

That is a very interesting point CLAPTON, and one that has made me think.

StevieJ

Pobby wrote: »

That is a very interesting point CLAPTON, and one that has made me think.

I suppose the trick is to be renting a nice house before you retire

Snooze

wageslave wrote: »

The state pension doesn't seem to favour home owners. If you are a tenant they will pay your rent. If you have struggled umpteen years to buy your house they just earmark it to pay for your care home. If you are fortunate enough to last that long.

Indeed. The whole pensions/savings thing is all BS and it amazes me just how stupid the vast majority of people are that cannot see how they are playing straight into the government's hands :

* Got savings? Great! Well in that case you'll been getting precisely f-all back for all that cash we've been happily extracting from your wages for the past 47 years. You'll also be paying your own rent, utils and CT until the day you die as well.

* Got property? Great! Please see previous paragraph and we wish you well in selling your house to pay for your retirement and care.

:rolleyes:

Solutions:

Keep your savings "under the mattress" or some secure location to keep them 'off radar' to all the snoops and flog your house and go rented when you retire, thus theoretically meaning that you should get everything you are entitled to from all the cash you've had no choice but to give them over the past 47 years.



R

Oldernotwiser

Old_Slaphead wrote: »

Don't you think old people like nice cars, holidays, decent wine, being able to turn the fire up when it's cold, not worrying too much when the boiler breaks down etc etc. If not, you really ought to get out more.

Despite it's relative generosity, I don't think the state provides for all of those.

Whilst it would obviously be good to have a nest egg for things like new boilers, the WFA will cover much of the extra heating you need and I don't think that "nice cars" and "decent wine" are necessities when retired!

Oldernotwiser

StevieJ wrote: »

I suppose the trick is to be renting a nice house before you retire

Not at all; the rent that would be paid would be the appropriate LHA amount for 1 bedroomed accommodation (suitable for a couple or single person). Anything over this amount is up to you.

carolt

Don't think so - surely they wouldn't make you move if you were already renting?

Oldernotwiser

carolt wrote: »

Don't think so - surely they wouldn't make you move if you were already renting?

Of course they don't make you move; they just pay you the relevant rate and you have the option to top it up just as happens for anyone claiming LHA.

This is certainly the way things work with LHA and renting in the private sector; if you are in council housing then you receive Housing benefit and the above situation doesn't apply.