MSE News: Generation 'not saving for retirement'

in Savings & Investments
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  • LokoloLokolo Forumite
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    RandomGuy wrote: »
    You don't say.

    Mortgage approvals fall to a new low... and economists warn it could get worse
    dailymail.co.uk/news/article-1391000/Mortgage-approvals-fall-new-low--economists-warn-worse.html

    So I guess I was wrong - I only need to save £1000 pcm for 4 years instead - plus I'll have an extra £6000 to put into savings at an interst rate that's well below inflation. I can see that comfortable retirement approaching already.

    The average house in my area according to Zoopla is £256,744, but am I aiming for a house that costly for my first house? No, I am aiming for around £150k, the lower end of the market.

    Having a nice house is a brilliant idea - if you think about everything in your life. And you've seemed to not thought about one thing, retirement.
  • ThrugelmirThrugelmir Forumite
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    However, those leaving college now are told to pay for uni, save for pensions, save for house deposits.....and woe betide them should they decide to have a holiday.

    What's changed? Agreed tuition fees have risen. However on the right course that will lead to a career. Some of us, weren't as fortunate in years past. Our salaries reflected the cost of our training and time off. Nothing in this life is a right. All has to be paid for.
    Real insurance claim quote : -

    "Going to work at 7am this morning I drove out of my drive straight into a bus. The bus was 5 minutes early.".
  • RandomGuyRandomGuy Forumite
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    Lokolo wrote: »
    The OP is saving £1k a month for a house - yet says they cannot afford to put any money into a pension...? How does this make any sort of common sense?
    I thought property was pension? That's what people keep saying.

    Besides, where did I even say that? The £1k pcm I'm saving is in addition to the £300 cm I'm putting into a pension. I did say I was paying into a pension.

    The article states "A generation of Britons are facing a cash-strapped retirement as they refuse to save more in response to the changing pensions landscape".

    I'm simply saying most people are not refusing to save more - it's because the current cost of living right here and now is so high it does not allow them to save more. Personally, I regard myself as fortunate for being in a position to save as much as I do but it's not without its sacrifices and I'm only making hay while the sun shines because I know it may not always be the case.

    I think some people fail to appreciate the real financial constraints people are facing at the moment. Unfortunately not everyone was clever enough to have been born before the 1980s.
  • LokoloLokolo Forumite
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    RandomGuy wrote: »
    I'm simply saying most people are not refusing to save more - it's because the current cost of living right here and now is so high it does not allow them to save more. Personally, I regard myself as fortunate for being in a position to save as much as I do but it's not without its sacrifices and I'm only making hay while the sun shines because I know it may not always be the case.

    I think some people fail to appreciate the real financial constraints people are facing at the moment. Unfortunately not everyone was clever enough to have been born before the 1980s.

    Why? (to the bit I highlighted in bold)

    As for other bit, you're wrong. You've even told me that you could save more into a pension - you just sacrifice elsewhere. It is possible for everyone to pay more into a pension if you budget, work out where you can cut down etc.etc. Obviously this isn't the case for everyone, but for the majority...

    This day and age is all about luxuries, people would rather have an iPad than save for emergencies. Then when it comes to those emergencies, people expect to sponge off the state.


    And property can be used as a pension, you can use it to gain income, but most people see the house as a home, not as income generating.
  • RandomGuyRandomGuy Forumite
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    The average home in England and Wales costs £161,000 – and the average buyer puts down a 26 per cent deposit.
    Lokolo wrote: »
    The average house in my area according to Zoopla is £256,744, but am I aiming for a house that costly for my first house? No, I am aiming for around £150k, the lower end of the market.
    Sounds like we're looking in the same price range.

    So you agree, then, that in the UK the "average house" is one that is at the lower end of the market?

    How are you getting on saving that £40,000 deposit, what with all your additional pension contributions?
  • dunstonhdunstonh Forumite
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    RandomGuy wrote: »
    I save £1000 pcm which is 50% of my net monthly income. I've never had SKY, I've never bought anything made by Apple, I rarely eat out (only for birthdays, mothers day, etc), I don't have expensive hobbies, I don't buy new clothes, I shop at Aldi and Lidl, I've put myself through university twice using my own savings from work and student loans, which I also needed, and which I have repaid in full with interest.

    Can I afford to save any more for my retirement (I'm already paying in to a pension)? No. I can barely afford to live now. The £1000 pcm is saving up towards a house deposit. Only another 5 years of saving and I might actually be able to afford a 2 bedroom terrace. Look at me - I'm living the dream my friend!

    And a financial crisis every 7 years?? Of this magnitude?? Are you being serious?! You clearly have no idea what is going on.

    House prices as a multiple of income have been at similar levels in the past. So, saving for a house, whilst difficult, is not dissimilar to how it has been in the past. Some areas have become much harder but not in general.

    And yes, a financial crisis has occurred on average every 7 years since 1956. I suggest you study your history. The last recession whilst severe and could have gone on to be worse is large because of its global nature. However, if you look back the 70s recession caused a larger contraction and a greater increase in inflation. The 80s was the worst recent one.

    So, if the 70s and 80s recessions were worse than this one, how did people manage back then?
    I am an Independent Financial Adviser (IFA). The comments I make are just my opinion and are for discussion purposes only. They are not financial advice and you should not treat them as such. If you feel an area discussed may be relevant to you, then please seek advice from an Independent Financial Adviser local to you.
  • LokoloLokolo Forumite
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    RandomGuy wrote: »
    Sounds like we're looking in the same price range.

    So you agree, then, that in the UK the "average house" is one that is at the lower end of the market?

    How are you getting on saving that £40,000 deposit, what with all your additional pension contributions?

    I don't need to put additional pension contributions because I already have planned my retirement, how much I need to put in, how much I will likely get out. The article is all about people not putting enough in, and then saying they cannot put more in. Obviously you seem to think you are OK so it doesn't really matter for you....
  • RandomGuyRandomGuy Forumite
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    Lokolo wrote:
    ^^ Exactly what my response was going to be. However I decided to play Call of Duty for a little bit instead.
    Lokolo wrote: »
    Why? (to the bit I highlighted in bold)

    As for other bit, you're wrong. You've even told me that you could save more into a pension - you just sacrifice elsewhere. It is possible for everyone to pay more into a pension if you budget, work out where you can cut down etc.etc. Obviously this isn't the case for everyone, but for the majority...

    This day and age is all about luxuries, people would rather have an iPad than save for emergencies. Then when it comes to those emergencies, people expect to sponge off the state.

    I give up. Enjoy your computer game.
  • RandomGuyRandomGuy Forumite
    31 Posts
    dunstonh wrote: »
    So, if the 70s and 80s recessions were worse than this one, how did people manage back then?
    I suppose they didn't have access to as much debt back then as they do now... but, really, you tell me; you're the history and economics expert.
  • Eco_MiserEco_Miser Forumite
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    Lokolo wrote: »
    I never said don't buy a house? I said you don't NEED a house. Yes a house will save you more money in the longterm. However, you do NEED pension provisions. The OP is saving £1k a month for a house - yet says they cannot afford to put any money into a pension...? How does this make any sort of common sense?
    You don't actually NEED a pension. It's nice to have one, but you don't NEED one. You may not live long enough to use one, and the state scheme will keep you from starving anyway. The sooner the OP gets his house, the sooner he'll stop paying rent, and the sooner he'll have paid his mortgage off, Then he'll have all that spare money to put by for his retirement. There's no point in saving for a comfortable retirement which you may not even survive to see, if your current situation is not comfortable.

    Personally, my savings should maintain my current lifestyle until I'm 109, even without my private or state pensions, but that's the result of half a life time of keeping expenditure well below income.
    Eco Miser
    Saving money for well over half a century

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