Workers facing a bleak old age?

kabayiri

dtsazza wrote: »

It's definitely worthy of consideration - as reiterated through the post the point isn't to have "a pension", it's to have thought about how much money you'll need in retirement and have taken affirmative steps to ensure that you'll have that money available.
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You make good points dtsazza, but I feel I might have contributed to leading this discussion down a fixed path of pensions.

The title was about a bleak future for those in old age, not specifically pensions, and I think we have to look at a wider scope than just pensions.

Ark_Welder

StevieJ wrote: »

I meant £40k a year actually So you are saying that people won't be docked £1 for £1 in benefits until they actually receive the pension, so I assume that when they do receive the meagre pension they will lose any benefits pound for pound. How is this encouraging the low paid to save into a pension?

Is this not the problem that the proposed flat-rate pension is hoping to overcome - if it goes ahea[d]?

edinburgher

because with an ISA they will either have to buy an annuity on retirement

Since when has anyone been forced to convert an ISA into an annuity?

then the spouse and children can inherit the balance

They can also inherit the balance of an ISA

edinburgher

I've looked at it again and to be honest, I think your wording was very wooly. I appreciate what you're saying, but the initial paragraph/s make for a confusing read.

edinburgher

They lose out on the 20% tax rebate for no real gain because with an ISA they will either have to buy an annuity on retirement or they will have to fund their retirement via their investments

This section didn't read very well (see text in bold). Taken as a whole, I could see what you were getting at, but it was a bit muxed ip I'd have gone for something along the lines of:

They will lose out on the 20% tax rebate for no gain because they will either have to use their pension pot to buy an annuity on retirement or fund their retirement through investments held in ISAs.

I genuinely thought you were saying that ISAs would have to be converted into annuities, but see what you were driving at now.

drc

"Workers face a bleak old age". In response to the title, I have to ask the question - What about non-workers (and those who have never worked)? Do they also face a bleak old age? Who is going to pay the pensions of the unemployed and never employed?

StevieJ

Forest_12 wrote: »

You missed the first part of my post where I said that they are phasing out pensions credit (and associated benefits) and instead will pay a fixed pension for all:

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That is what people seem to believe but it is not substantially true, I remember looking at it a while back and came to the conclusion that there world be some sort of clawback for those that had contracted out. As I said before, the new pension arrangements are designed to cut costs not to increase them.

StevieJ

Forest_12 wrote: »

You missed the first part of my post where I said that they are phasing out pensions credit (and associated benefits) and instead will pay a fixed pension for all:

"Thats being changed though. The madness of having people who have made a small pension provision being worse off than those with no pension provision is being addressed and pensions credit, which only came in with Labour will be removed, possibly by having a flat pension payment for all."

They will pay a fixed pension that is above the current cut-off rate for pensions credit and so pensioners will be able to pay for their own rent and rates. Any additional savings pensioners have will be in addition to their pensions and will be to the pensioners benefit.

Everyone on retirement gets an age-related tax free allowance of £10k. The proposed £140 pw fixed rate pension comes to £7280, which leaves £2720 pa tax free. This means that anyone paying into a pension scheme will receive 20% or 40% tax rebate and not get taxed when their pension is in payment*.


* providing their annuity pays less than £2720pa or they leave their pnsion in drawdown and take less than £2720pa. Remember that you are also allowed to take 25% tax free from the pension, so using 5% annuity rates, you could have a pension pot of around £70k and all of it will be tax free.

I think you are missing my point and it is nothing to do with pension credit or fixed pension, it is related to the benefits paid to OAPs' with no independent pension. I am referring to the fact that pensioners with few assets will have their rent and council tax paid for them whereas someone with a small independent pension is likely to have these benefit payments reduced or removed. Why do you say that someone receiving the new fixed pension of £150 a week will suddenly be able to pay their own rent and council tax out of it?

manchesterred

edinburgher wrote: »

While I respected your initial contribution, this is a !!!! poor attitude to take - the government has made a mess, so I'll let other people's grandchildren bear the burden? :mad:

I used to be of your opinion , but when i retire Britain wont be Britain anymore, So now ime with ChiefGrasscutter .. Let the state pay ! i will conceal my savings somewhere, somehow .. !

LilacPixie

I am of the opinion that state pension will not exist when its time for me to retire, if i manage to work to a typical retirement age. Pensions actually confuse me a bit, not so much the actual pension but the deciding how much of an income would we want/need in our retirement. I have no idea what way to sort things out should we do the OK we can afford to contribute X a month so we will have a pot of Y at retiral and that will have to do or should we say well we want an income of say £1500 a month in todays terms so how much do we need to contribute.

It has been on my list to sort out for a while and something always seems to crop up so other than both contributing to employer schemes so we at least have pensions I have no idea if that is best for us or if we should be making a further provision over and above that.

I wonder if we are typical of alot of the workforce, something else gets in the way and retiral is 35/40 ish years away so just seems to slip down in priority