Over 55s hoping to enjoy a 'golden retirement' are facing poverty

carolt

http://www.telegraph.co.uk/finance/personalfinance/7200751/Over-55s-hoping-to-enjoy-a-golden-retirement-are-facing-poverty.html

A generation of people hoping to enjoy the "golden years" of their retirement are facing poverty because of dwindling savings, pensions and unpaid mortgages, it was disclosed last night.


..Those retiring in January 2000 could secure an annual pension of £9,000, but the figure has fallen sharply to a mere £2,500 for those retiring today, based on monthly contributions of £100 into a pension pot over 20 years.

At the same time, 20 per cent of people still owe at least £75,000 on their mortgage and only 76 per cent own their own home, compared with 84 per cent of people aged between 65 and 74 and 81 per cent of the over-75s.

silvercar

Those retiring in January 2000 could secure an annual pension of £9,000, but the figure has fallen sharply to a mere £2,500 for those retiring today, based on monthly contributions of £100 into a pension pot over 20 years.

Is that saying an annuity bought on the basis of £100 a month of 20 years, now buys you less than it would have if taken out in 2000? Hardly the fault of those retiring?

At the same time, 20 per cent of people still owe at least £75,000 on their mortgage

Are failing endowments to blame? At least HPI should ensure there is plenty of equity in their homes.

only 76 per cent own their own home, compared with 84 per cent of people aged between 65 and 74 and 81 per cent of the over-75s.

So a lot of 60 year olds must have got secure council homes, whereas the previous generation bought to guarantee a roof over their heads? Or are they all STRs?

Sorry I don't understand the message here. Anyway most people work til 65 or more, so a golden retirement for 55s is just wishful thinking.

DaddyBear

Not to worry, they will have at least £400k in unearned wealth from their houses. On paper at least, unless they remortgaged to buy that 4x4 and get prince and princess onto the ladder.

carolt

If you read the whole article, I think the 'point' was to show how badly-performing shares and low annuity rates are hitting those coming up to retirement, compared to previous generations.

The clue was in the title.

dopester

carolt wrote: »

http://www.telegraph.co.uk/finance/personalfinance/7200751/Over-55s-hoping-to-enjoy-a-golden-retirement-are-facing-poverty.html

A generation of people hoping to enjoy the "golden years" of their retirement are facing poverty because of dwindling savings, pensions and unpaid mortgages, it was disclosed last night.

A similar article in the Daily Mail.

Boomers to busters.

A generation in denial: Millions face retirement poverty because they've remortgaged their homes and saved too little

By Becky Barrow
Last updated at 1:54 PM on 10th February 2010

2010

carolt wrote: »

If you read the whole article, I think the 'point' was to show how badly-performing shares and low annuity rates are hitting those coming up to retirement, compared to previous generations.

Can`t say I`m really surprised when you`ve got a bunch of crooks running banks,insurance,pensions etc.who will do anything to get their greedy hands on money and gamble with people`s livelihoods.

The country`s corrupt from top to bottom with fiddlers,including those 600 and odd in Westminster.

silvercar

2010 wrote: »

......

Just wanted to say cool user ID.

RabbitMad

silvercar wrote: »

Just wanted to say cool user ID.

it will date so quickly though

Old_Slaphead

DaddyBear wrote: »

Not to worry, they will have at least £400k in unearned wealth from their houses. On paper at least, unless they remortgaged to buy that 4x4 and get prince and princess onto the ladder.

You should travel north of Watford sometime to see how many £400k+ houses there really are.

baileysbattlebus

silvercar wrote: »

Just wanted to say cool user ID.

It's SO this year!

Harry_Powell

carolt wrote: »

If you read the whole article, I think the 'point' was to show how badly-performing shares and low annuity rates are hitting those coming up to retirement, compared to previous generations.

The clue was in the title.

If they are coming up to retirement then they shouldn't have had their pensions invested in shares in the first place. The usual procedure is to start moving from riskier equities into safer government bonds and cash funds when you approach retirement so that a drop in the stockmarket doesn't impact you. Clearly a lot of these prospective pensioners haven't kept their eye on their retirement investments.

Annuity rates are low if one tries to retire at age 55 due to longer life expentancies. If we retire at 55, it's not beyond the realms of fantasy that we could live to 95 and therefore spend 40 years in retirement. Given that most people start pensions in their 20's that means people spend longer in retirement than they did working, which is an untennable position. Those who retire at a more reasonable retirement age of 65, will have much better annuity rates available.

Of course this is all moot because we don't have to buy an annuity anyway. The choices are that you postone retirement until the stockmarket (and hence penson fund) recovers - easy to do if early retirement was the goal or to put your pension fund into 'Drawdown', which is an alternative to buying an annuity. With drawdown you keep your pension fund invested int he stockmarket and live on the gains.

Naturally, the newspaper neglected to mention all this....