'Not got a pension? You will do in two years!' blog discussion

treborg

jamesd I stand erected!:beer:

drc

jamesd wrote: »

drc, if you've never worked a day in your life you'll get means tested Pension Credit of £130 a week plus possibly other means tested benefits like housing benefit/local housing allowance, if you pass the means tests.

Sorry, off topic but is this true?

The state pension is £95.25 (if you have worked all your life). If you have never worked you get pension credit which is £130 per week (plus possibly other means tested benefits). Is this a joke? How can you possibly get a bigger pension if you have never worked than if you have always contributed?

dktreesea

Over time, eligibility for the state pension will probably reduce, via raising the age at which it kicks in. I would expect that it will change to not kicking in until 70, or maybe even 70 for women and 75 for men. And coupled with this will be outlawing the current practice of forcing people to retire due to their age. So if you plan to retire at a more sensible age, say 60, and want to have a decent standard of living for the 20 to 30 years you could be retired, then the only way you'll get that is to start socking away money now, be it into your mortgage or into other income producing assets. I would like to see an article on how to go about setting up your own private pension fund. Paying fund managers (who are, to my mind, the wild west cowboys of the current era), to gamble/guess/neglect their way along managing my hard earned savings seems a bit mad.

jamesd

dktreesea, it may not need to go beyond 68 because by 2050 or so the big stress from the retiring baby boomer generation will start to ease as that generation dies increasingly rapidly. Depends a lot on what happens to life expectancies but those can be as low as twelve years for a manual worker retiring at 65 in some parts of the country. The plan to increase to 68 is already taking a quarter of the retirement from such a person and going to 70 would take almost a quarter of what's left.

It wouldn't make any sense to increase the retirement age for women to just 70 and men to 75 because women live longer than men. It should be women 72 or so and men 70 to balance out the differing life expectancies of women and men so they get closer to the same amount of retirement. But those ages are both too old because of all the people who die younger and would be deprived of any retirement getting the state pensions.

If you're confident in your ability to outperform professional fund managers a SIPP is the way to go. Those can let you hold individual shares that you select yourself, as well as a wide range of other investments like gilts and corporate bonds.

drc, yes. Pension credit is supposed to be the minimum that we as a society want a pensioner living on, so it's paid out regardless, just as we pay jobseekers allowance so that people don't end up starving while looking for work.

£95.25 is just the basic state pension. Someone who is retiring now and worked for their whole life might have the same again in additional state pension from SERPS, S2P and their predecessor earnings related systems. Except women who paid the married women's stamp instead of the full one, or the self-employed.

Also someone who worked their whole life under the slowly vanishing final salary workplace pension system would probably have accumulated a fair pension from that.

A person who did work for their whole life would also be entitled to Pension Credit if they passed the means test because they didn't have enough income from other sources.

dktreesea

jamesd wrote: »

dktreesea, it may not need to go beyond 68 because by 2050 or so the big stress from the retiring baby boomer generation will start to ease as that generation dies increasingly rapidly. Depends a lot on what happens to life expectancies but those can be as low as twelve years for a manual worker retiring at 65 in some parts of the country. The plan to increase to 68 is already taking a quarter of the retirement from such a person and going to 70 would take almost a quarter of what's left.

It wouldn't make any sense to increase the retirement age for women to just 70 and men to 75 because women live longer than men. It should be women 72 or so and men 70 to balance out the differing life expectancies of women and men so they get closer to the same amount of retirement. But those ages are both too old because of all the people who die younger and would be deprived of any retirement getting the state pensions.

The stress from having to pay for all the retiring baby boomers may well start to ease. But Britain has a worse problem when it comes to funding the state pension. We export the skilled, the well off, those who could be expected to fund another 30 or 40 years or so of someone else's pension. Those filling their places are mainly poor and/or unskilled; the disenfranchised of the world. People on the minimum wage with families to support basically don't pay any tax. Quite the contrary - they receive top up benefits because the minimum wage is not a living wage. How are we going to fund the state pension into the future for all those who will need it? For sure, anyone on the minimum wage isn't going to be earning enough to fund a private pension, let alone anyone else's.

seven-day-weekend

drc wrote: »

Sorry, off topic but is this true?

The state pension is £95.25 (if you have worked all your life). If you have never worked you get pension credit which is £130 per week (plus possibly other means tested benefits). Is this a joke? How can you possibly get a bigger pension if you have never worked than if you have always contributed?

If you have worked and your State Pension is £95 and is your TOTAL income (unlikely if you have worked for an employer), then you will also get £35 Pension Credit (means-tested), which will passport you to the other Benefits.

In other words, Pension Credit guarantees a minimum income of £130 for a single Pensioner and £198 for a couple.

drc

seven-day-weekend wrote: »

If you have worked and your State Pension is £95 and is your TOTAL income (unlikely if you have worked for an employer), then you will also get £35 Pension Credit (means-tested), which will passport you to the other Benefits.

In other words, Pension Credit guarantees a minimum income of £130 for a single Pensioner and £198 for a couple.

Ah ok. That makes more sense.

dobbie82

So if its a PRIVATE scheme, who is running it? I.E is it "an independent govenment funded blah blah..

would what I pay in be guaranteed? And the government have no involvements or rights over the money. Or could they say oh due to such and such there is a shortfall here's your 50p a week.

wonderpupp

I will be opting out.
I have no pension, and I do not want one.
As they raise the pension age periodically, I will have to reach the ripe old age of 78-83 before I would be able to claim what I had earned.

I have worked full time and more since the age of 18. Age 29 now, I have chosen to continue working full time, not have any children to eat away my disposable income, and my hubby and I really enjoy ourselves and our time together.

We smoke, we drink (not to excess anymore, but sometimes) I have a family medical history of heart disease, various cancers, kidney failure, obesity (though no longer obese myself). I have had cervical cancer and treatment, though it will likely return as I enjoy the occasional post-work cigarette still. I ride motorbikes, and I enjoy extreme sports. although my great grandmother lived to 104, the longest any other relative I know of has lasted to is 69. My mother is 55 and definately on her last legs, sad it is to admit, but the years have not been kind to her or my family.

I do not plan to live to retirement age. I would more likely be killed in a road accident / bike accident or die of cancer (and Ive had some close calls). I am enjoying the time I have left, and hopefully a good 20-25 years or so left.
Retirement for me, I feel, is just a dream I'll never experience.So I live for now, and a short lived future.

Oh, selfish me.

jamesd

dobbie82, Tata will be running it, having been appointed recently. I'm not aware of any announcements about whether it will be administered from within the UK or not.

wonderpupp, for those with an expectation based on family history that they may well not live until retirement age that's not an unreasonable decision to make, though planning to invest and retire at 45 or 55 and have some retirement might be an idea.