Workers facing a bleak old age?

Procrastinator333

PasturesNew wrote: »

I don't have a pension; lower rate tax payer all my life, never had an employer who gave out a pension. In/out of jobs for the past 20+ years as companies closed/downsized etc etc.... on the pensions board here, it was said that if you're a lower rate tax payer and no employer contributions, it's not really worth trying to 'do the right thing'.

I think the point in those circumstances was that the advantage of saving for retirement via a pension was marginal. So it could be argued it is worth saving outside of a pension. Not that under those circumstances you shouldn't bother.

ChiefGrasscutter

Procrastinator333 wrote: »

So your plan is to blow the lot and get to retirement with nothing so the state can look after you? Great plan.

Oh, and don't count on it being 66. My money is on it rising to 70 in the not too distant future.

Actually no, personally...I'm one of those who is not short of the odd bob or two to quote an old phrase so whether I actually get a state pension or not from HMG will not really bother me either way in the scheme of things (it will probably be 'means tested' by the time I retire I'd suspect so I wouldn't get one anyway!).

kabayiri

I don't think that pensions are attractive to all sectors of the population :-
- the charges are high for those who can only make smaller contributions
- the annuity rates have gone down dramatically in the last decade
- the products are not at all transparent. The public sector equivalent is a role model for transparency. Every teacher knows how much they pay in and what they can expect to get by way of pension. The private sector person paying equivalent money has no such guarantees.

There was a program on a few years ago where Ros Altman (sp) gave advice to a guy in his early 40s who had no private pension. She suggested 400 per month was the figure he should save into a pension.

Here's an alternative idea for saving 400 a month. Take 3 years and its equal to circa £11K (+). Invest in a PV solar setup and the Feed In Tariff could generate £1100 a year for the next 25 years.

I know which sounds more attractive to me.

StevieJ

Procrastinator333 wrote: »

I think the point in those circumstances was that the advantage of saving for retirement via a pension was marginal. So it could be argued it is worth saving outside of a pension. Not that under those circumstances you shouldn't bother.

On a purely financial basis, wouldn't financial assets exclude a person from certain benefits such as rent and council tax and so prove sub obtimal? I agree that in PN circumstances, the proceeds from her house sale would exclude her from those benefits anyway.

edinburgher

Why?

If you are in a situation like PasturesNew then contributing is stupid.

You misunderstand. I posted that I respected a poster's contribution (i.e. their post) until it turned into a whine about how they were going to let the government pay their way in old age and I disagreed.

I never made any comment on pension contributions. The people who have thanked your 'contribution' might like to try reading a thread once in a while...

kabayiri

edinburgher wrote: »

You misunderstand. I posted that I respected a poster's contribution (i.e. their post) until it turned into a whine about how they were going to let the government pay their way in old age and I disagreed.
...

It's not a whine.

It's a calculated risk. PN may have other plans as to how to generate an income to augment the state pension income.

This is what BTL people can choose to do as well.

Given pressure on housing they are likely to have a predictable income stream. It sounds a lot more solid than trusting a private pension scheme to deliver the goods.

We should look at all possible options to help people in their retirement, even cashing in on their assets such as housing.

edinburgher

The post I was commenting on featured this paragraph that I disagreed with:

Indeed it seems to me from casual reading in the press generally that for employees below a certain wage level it will probably be better overall for them long term NOT to save for a pension as charges will overtake the gains and instead say sod you to HMG - you can pay when I'm 66.

It's not a whine.

It is/was a whine - it talks about dumping personal responsibility to rely on the state. There's no link between what you're talking about (different ways of providing for your future) and this previous comment.

StevieJ

edinburgher wrote: »

It is/was a whine - it talks about dumping personal responsibility to rely on the state. There's no link between what you're talking about (different ways of providing for your future) and this previous comment.

What is this personal responsibility? is it managing your financial affairs badly to satisfy some sort of libertarian dream?

edinburgher

What is this personal responsibility?

Well, I exist (fairly sure of that), plan on existing for quite a while yet, have the means to save some of what I earn and I don't want to rely upon the fickle whims of future governments to provide for myself in old age. I feel I owe it to myself (and the people around me/future generations) to do what I can to provide for myself.

My personal mantra is to not make life harder for those around me if I can avoid it, it's not really a complex idea..

Granted, I didn't choose to be born, but why should I expect the state/other people to look after me in old age?

You can call this what you like (I don't really have a political philosophy).

is it managing your financial affairs badly

You've lost me here, happy to get back to you if you can clarify what you mean

kabayiri

edinburgher wrote: »

...
Granted, I didn't choose to be born, but why should I expect the state/other people to look after me in old age?
...

It's an interesting point, because that is exactly how our state pension scheme looks.

Those in work today fund the state pension of those retired.

The problem with this has been the worsening ratio of those in work to those retired.

Some suspect this is the reason why the previous government chose to let immigration grow the populace.

I misunderstood the post you referred to earlier. (I should learn to read )