MSE News: Generation 'not saving for retirement'

in Savings & Investments
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  • LokoloLokolo Forumite
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    Eco_Miser wrote: »
    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.

    I don't disagree but you've saved for your retirement. Others don't. Read the article, read the pensions forum and see how many people would rather access their pension to pay off debts and then not contribute to a pension.

    Good for you, you've decided to save in cash instead of a pension, but for the simple Joe Bloggs saving money in cash of investments outside of a pension for retirement is a disaster, they have access to the money and will spend it on anything but their retirement.
  • rictus123rictus123 Forumite
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    I have recently started looking into longer term things. Yes i have some money on cars, just a few months salary though and will be gone withen the year. I need to know now what to do with surplus income BEFORE i have it so i dont waste it away like 99% people my age seem to. I am 20 this year. So i have time. I take home £1,600 a month. This will be going up in July...possibly another £900 on top of that....

    So whats my first steps?

    Short term i want to get my first house. A cheap tacky 2 bed house. Then i will do up as i go along(perk of my job, free materials and know how to do 90% of work in a house)...hopefully mortgage free by 30. So probably buy at 23. 7 years to clear a mortgage.
    Medium term i want liquid cash for financal security. Not taking huge crazy sums...a year and a half salary would be perfect i think. So about £40- 45k by 28. 5 years after i buy house.
    Long term i want to learn how to invest and invest slow and steady, putting in a little bit monthly. Then when mortgage is up put in half mortgage payments for a few years. Use other half to save for deposit on buy to let.

    I dont want to pay into a pension as i dont trust it. I dont trust it for the life of me. If company i have pension with goes bust then what? Maybe i just need to read more into it and il trust it but right now i dont fancy it what so ever. Employer pays a little in for me.

    So whats the advice for me? And dont just say im living in dream land with my plans above, this is probably why alot of young dont ask about finance....because they just get mocked.
    Work in progress...Update coming July 2012.
  • edited 26 May 2011 at 8:34PM
    JoeCrystalJoeCrystal Forumite
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    edited 26 May 2011 at 8:34PM
    rictus123 wrote: »
    I dont want to pay into a pension as i dont trust it. I dont trust it for the life of me. If company i have pension with goes bust then what? Maybe i just need to read more into it and il trust it but right now i dont fancy it what so ever. Employer pays a little in for me.

    So whats the advice for me? And dont just say im living in dream land with my plans above, this is probably why alot of young dont ask about finance....because they just get mocked.

    Save into a pension seems obvious to me... By the way, I think it would be good idea if you do some research into pension. Why did you not trust it?

    As for pension fund? it depend on the pension scheme itself. If it is defined contribution where you pay money into, then the money is held on your behalf in trust, you choose the funds, and if you are very lucky, your company can also pay into it as well, matching your contribution. If it is defined benefit scheme (getting rarer and more so), and if the company collapsed, then it get passed over to Pension Protection Fund. Not mentioning tax relief as well. Find out about it from your company and there is pension forum here if you want to ask questions. :)

    EDIT: I just re-read the post and came across the fact your employer do pay into it, just how much? I am curious to know :)
  • rictus123rictus123 Forumite
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    Its more about how its so long term...maybe its just being short sighted but i wouldnt like to put so much away that i cant touch until 60 odd? Goodness knows what age retirement age will be when im 65 in 45 years time. How would i go about seeing what my employer would put in?
    Work in progress...Update coming July 2012.
  • Graham_DevonGraham_Devon Forumite
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    Thrugelmir wrote: »
    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.

    Well this has changed for a start...
    Taxes must rise to cover the cost of baby boomers' pensions, healthcare and benefits, the National Institute of Economic and Social Research (NIESR) has said.
    Its report said children born now would pay £70,000 more in taxes over their lifetime than they got back in benefits and services from the government.
    Those aged 65 have received £220,000 more from the state than they paid in.
    The report said that taxes should rise by £82bn a year to plug the gap.
  • JoeCrystalJoeCrystal Forumite
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    rictus123 wrote: »
    Its more about how its so long term...maybe its just being short sighted but i wouldnt like to put so much away that i cant touch until 60 odd? Goodness knows what age retirement age will be when im 65 in 45 years time. How would i go about seeing what my employer would put in?

    I can really understand that :) I am 25 and just started my own pension scheme last year as my company do not provide any contribution into their stakeholder pension scheme. I spent few years in my jobs ignoring the pension schemes thinking that I will just save up money for retirement before I stumble onto the gold mine of this forum. This forum and pension forum opened my eyes on what could happen and the price of delaying the retirement provision. One of the most important elements within the pension is time. Since you are twenty, that would mean you only need to put away smaller amount of money compared to person of thirty years old for example. The price of saving into pension scheme may not be high as you think it may be. Especially you got an employer who is happy to contribute to it along with tax relief.

    I do wish you luck and fortune in your future :)

    Cheers

    Joe
  • PincherPincher
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    I listened to Margaret Thatcher, used up my annual contribution allowance every year, whether company pension or personal. Unfortunately even my company pension, plus AVC was with Equitable Life.:eek: Obviously I stopped paying in.

    Twelve years on, the sterling numeric worth virtually stood still, while the buying power has at least halved.

    Every share I buy in my ISA has lost money, and I can't even claim capital loss against capital gain.

    Nothing I save ever grows.
  • cashbackproblemscashbackproblems Forumite
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    bendix wrote: »
    Generation can still afford one or two overseas holidays a year, luxury consumer goods and meals out regularly.

    It's a question of priorities, isnt it?

    Its also a question of living some of your life otherwise whats the point in working just to save? Sure people do spend excessively on clothes and holidays, but the majority live within their means but due to student debt, high property prices, high insurance etc just cant save enough.
  • StacFaceStacFace Forumite
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    dunstonh wrote: »
    Lets pick a low earner on £15,000..

    If some of you are classing £15k as a low income then no wonder there are comments about everyone being able to save up something!
  • ThrugelmirThrugelmir Forumite
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    RandomGuy wrote: »
    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.

    Up to 2008 there was 16 years of unbroken economic growth.

    Most people's basic standard of living has never been higher.
    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.".
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