Something that doesn't seem to get mentioned

Graham_Devon

I'm the only one, out of my 4 best mates with a pension. And I only started that up this year and its projected value isn't something you could live off, so it's more a supplement to any basic state pension.

This doesn't seem to get mentioned that often, but is there a pensions crisis about to hit in a couple of decades?

BTL has been seen as a great pension, but with rents as they are, it's only stopping the BTL brigade generations children pay into a pension themselves.

How many under 30's have pensions? And considering many of them are crippled with housing costs, how many will have them by the time they are 40?

What about the 21% of unemployed under 25 year olds? They can't even get a job, and if they do the first thing will be housing, and maybe kids etc, with the pension coming way down the line.

Just thinking out loud really. But certainly, the people I know, who are all lik emyself and just "getting by" from day to day, watching everything go up around us, there don't seem to be many planning for retirement....it's bad enough just trying to live for today with housing and fuel costs.

On another note, I've recently been looking at jobs, jobs I have done before. Seems employers are royally shafting people with wages offered. 20k with a 5k car allowance for a full time software field engineer?!

Whinge over. Fully expect to be told I haven't got a clue yadda yadda and that I have a smart phone so shutup.

wotsthat

Young people don't save for pensions because they are young and think;

a) they won't get old
b) the pensions fairy will visit them if they do

Most people can afford to save. Whether they choose to or not is a different matter.

runninglea

Everybody knows that they should have a pension but not many people can afford it.

The government as from next year is making it compulsory for employers to pay into a scheme and also for employees to have to pay in.

Not sure how much they have to or what the rules are - but does anyone

wotsthat

runninglea wrote: »

The government as from next year is making it compulsory for employers to pay into a scheme and also for employees to have to pay in.

It's compulsory for employers to have a scheme. It's not compulsory for employees to join - they can opt out. It might help young people who know they need to save get savings started.

Those determined not to save for their futures and to get others to subsidise them in old age will be free to do so.

WestonDave

The rules on compulsory employers contributions start to phase in next year but won't be fully implemented for smaller employers until 2016. Contribution rates also phase in until ultimately employers contribute 3% and employees 5%. However employees can opt out although they have to renew this opt out periodically otherwise they will automatically be put back in! Employers are not allowed to provide any encouragement or even assistance to opting out - apparently they aren't even supposed to make the relevant forms available!

The big problem however for a lot of people is that pensions per se lost a lot of their attraction when Gordon the Moron raided them. With the loss of tax releif within a pension fund, you end up with a situation where you have an ISA which has internal tax relief and is tax free on payout versus a pension whereby you get tax relief on the way in but then get no relief on dividends etc whilst in the plan, and also get taxed on much of the payout. Because you can access your funds in an ISA, the flexibility starts to outweigh the potentially small tax benefits of a pension over an ISA.

WestonDave

On a personal basis I started a private pension at about age 25 but with Gordon's raid I've left the contributions at the rate they were at the beginning so its only getting the equivalent of 2% of my salary. Next April I will qualify for a work scheme where they will match contributions up to 2% of salary so I will probably do that in addition to my existing scheme but no more than the matched amount. I probably currently have more in old share ISA's than in my pension fund! At present family commitments mean there isn't spare cash to add more but if there was any surplus would be going into ISA's to give me the option of either leaving it for retirement or using some of it to fund the kids college costs.

RenovationMan

I think you need to start posting pensions related stuff on the pensions board Graham, they have been discussing the pensions crisis for years.

With your decision to use your pension as a 'top-up' to the state ones, you should make sure that your pension projection does not take you above the age related personal allowance. This is the tax free allowance that we get when we turn 65 (this might change) and allows us a tax free income of around £10k.

Your first step should be to get a state pension forecast from the government (google 'state pension forecast') as you might be entitled to SP2 as well as the basic state pension. When you get your figure (I think mine was £8k or something) then substract it from your age related allowance (£10k) and the remainder is the figure you should be aiming for in a traditinoal pension (£2k per annum in my case). One you have reached this amount in your pension plan, then I'd suggest you start filling ISAs.

If you use this strategy then all of your retirement income will be completely tax free.

Going4TheDream

How can people even consider 'saving' for the future when many wonder how they will get through the next month or even week. I truly see a bleak future for many people as the divide between rich/poor or have/havenot's gets wider and wider.

wannabehermit

wotsthat wrote: »

Young people don't save for pensions because they are young and think;

a) they won't get old
b) the pensions fairy will visit them if they do

Most people can afford to save. Whether they choose to or not is a different matter.

Not true at all. Certainly not where I'm sat anyway. I'm 31, DH is 33. We don't save for a pension because we can't.

Older people (i.e. people of my parents generation) don't seem to understand that just because they could buy a house, have holidays and put into 4 or 5 pensions on one income doesn't mean we can. Disposable incomes are far lower than they were 10-20 years ago and people who are in my position are pretty much living hand to mouth.

We know we need to put money into a pension, but we also need to eat and that comes first.

RenovationMan

Going4TheDream wrote: »

How can people even consider 'saving' for the future when many wonder how they will get through the next month or even week. I truly see a bleak future for many people as the divide between rich/poor or have/havenot's gets wider and wider.

What do you suggest? Should we spend it all now and not worry about living in poverty in our old age?

[Deleted User]

I've had a pension since i was 23 and started full time work (it was even a final salary pension). Currently, not putting into a pension as I'm moving up the property ladder (expanding family) and need to be able to pay the mortgage. I'll rejoin the pension scheme next year

25k for a software field engineer is pants. Should be more like 35k+5K