Do I need a pension? Astonishing rise in life expectancy

MikeJones_2

If you ever doubted the need for proper retirement planning (and that might include a pension, as part of building up funds) I can’t think of two more powerful items of information than those issued today by the Office for National Statistics.

The first is the fact that in the UK we now have a record number of people aged 100 or more - in fact four times more than in 1981.

The second is the fact that life expectancy is continuing to increase and we are living longer in retirement than ever before - much longer!

The need to fund for this has never been more important for individuals and for the State. See
- Life expectancy continues to rise (Office for National Statistics)
- Record number of centenarians in the UK (Office for National Statistics) (pdf-3 pages)

Another insightful publication:
- Older People's Day 2010 (Office for National Statistics) (pdf-13 pages)


Link Permission: No explicit link permissions is required to the ONS website or documentation.

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

Compulsory euthanaesia anyone?

vicshippers

Most of my friends professionals in their 30's - not one has a pension or has really spent any time thinking about it (all their cash is going into rent or a house deposit).

It's going to get worse before it gets better.

Turnbull2000

Of my team of nine at work, only two of us opted into the defined contribution pension scheme. My impression is that most people under 35 are not bothering, with enrolment more or less confined to older members of staff fortunate enough to be in the defined benefit scheme.

I'm kind of losing the will myself. My recent pension statement made sober reading, and the sums I need to set aside to achieve just a third of salary are huge. I'll probably just end up excluding myself from state benefits and be no better off. The fund growth assumptions are also completely absurd - 5% p/a lowest, 7% p/a mid, 9% p/a best. If anything, future government fiddling and inflation will devalue my pension year after year

Property (at a good price) and rental income seems to be safest way.

dunstonh

The fund growth assumptions are also completely absurd - 5% p/a lowest, 7% p/a mid, 9% p/a best.

Why are they absurd? A typical balanced managed fund has been running around 7.5% p.a average for a long time. Many people with higher risk portfolios have been getting double digits.

If anything, future government fiddling and inflation will devalue my pension year after year

Equities tend to be a good hedge for inflation.

Property (at a good price) and rental income seems to be safest way.

Its an option but still quite risky to rely on that alone. We have seen CGT go through three different levels/methods in recent years. So, not much staiblity there. Plus, its not an easy option for an inexperienced individual to run.

jem16

Turnbull2000 wrote: »

Of my team of nine at work, only two of us opted into the defined contribution pension scheme. My impression is that most people under 35 are not bothering, with enrolment more or less confined to older members of staff fortunate enough to be in the defined benefit scheme.

Both my sons have joined their company's pension scheme - one 23, the other 26. For their 5% contribution the company pays 11%. Anyone not doing this would be mad. The elder one has been in the scheme for 17 months and recently said his pension is doing really well.

I think most people under 35 are too busy thinking that they would rather spend the money now than think about an event 30/40 years in the future. Of course when they do think about it, it's far too late to do anything where it doesn't cost them a huge amount each month so once again they don't bother.