Something that doesn't seem to get mentioned

neverdespairgirl

OH and I are both 33, and don't have much in the way of pensions. We do both have a SIPP (we're self-employed, so no employer's scheme or final salary or anything). We're both in a line of work where you get off to a slow-ish financial start and then earn more later - OH's gross income this year is likely to be twice what it was 3 years ago, for example.

My SIPP owns part of my Chambers, with a deposit and mortgage, and the rent from Chambers on my share goes into the pension, pays the mortgage, and a bit left over.

Jack_Johnson_the_acorn

I pay 3.5% into my final salary pension, my employer pays 17.5%, is this good? I assumed it was when I signed up as I work in the civil service.....

I'm a bit embarrassed by my absolute lack of knowledge when it comes to my own pension....:rotfl:

ruggedtoast

Jack_Johnson_the_acorn wrote: »

I pay 3.5% into my final salary pension, my employer pays 17.5%, is this good? I assumed it was when I signed up as I work in the civil service.....

I'm a bit embarrassed by my absolute lack of knowledge when it comes to my own pension....:rotfl:

White Horse is going to blow a gasket.

Loughton_Monkey

The crucial issue here is not 'pensions' per se.

This issue is the trend, that reached a peak probably up to around 2006/7 of spending not only what you earn, but a bit more on your credit card as well. Whether it's 'greed', or selfishness, mindless ignorance of the future, I don't know. So much so, that today we have the theme of many people [rightly] cutting back on the credit, and trying to live on 'only' 100% of net salary - which is not keeping up with inflation.

This is a 'good' trend, but sorry, spending 99.9% of your income is simply suicidal (financially). We all hear the cry "Well you try and feed 2 kids and pay the rent/mortgage on £X0,000 a year......" but this argument holds no water. Everyone has chosen their lifestyle... the type of car, the type of accommodation, what holidays, what food to buy, how high to turn up the heating..... and what they are really saying is "The lifestyle I have chosen cannot be lived on any less than £X0,000 so don't expect me to save..."

With any luck, this trend will continue and the new generation may 'save' again by the simple device of spending less than they earn.

When (I'm guessing) 60% to 80% of people insist on living 'up to income', I find any debate about pensions a little bit false and farcical. Should we buy pension or ISA? Maybe a BTL instead? Which particular pension company or funds? How much should I put in........? This debate applies to so few people these days it hardly matters. Only when the majority of people realise that they must not spend about 20% of their income does it become rational to discuss pensions/funds/charges/ISA's/IFA's......

Retirement planning is 90% about spending. Only 10% about pensions etc.

chucknorris

Previously my attitude towards pensions was that I/we didn't really need one (although we do have minor pensions) as we would rely on our wealth in retirement. However last week it suddenly dawned on me that the best strategy is to avoid being the 'richest man in the graveyard' and actually spend most of it. But in order to do that you need substantial pension income as a hedge against living for much longer than you expect.

So I am going to change to plan B which is to buy pension top ups in the teachers pension fund. It seems like a good deal you can buy up to £5,600 per year pension for a lump sum of £69, 216 (this year). However I am surprised you can buy this much in one year as I would have thought this is over the 50k total pension limit, I need to look into this. Also I don't want to go under the 40% tax band when claiming the tax relief.

MRSTITTLEMOUSE

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.

Its not just the youngsters of today who don't have pensions to look forward too though.
My husband is just turned 60 and already taking his pension although he stayed in his job as he did'nt want to give up working.
Although we made it a priority to pay into a pension from the start a lot of his friends did'nt and since they retired are realy feeling it now.
I'll admit we did do without things when we were young,stuff his friends thought were priority holidays etc and we did'nt buy a house till our mid thirties but we are feeling the benefit now.
We did'nt miss those things half as much as we'd miss the pension my husband receives now.
All I can say to the younger people on here is save as much as you can and then save that little bit more.
You'll need it if you want to be able to live and not just exist.
It won't be pleasant living as an older person on very little income,some of our friends are realising this already.

kabayiri

These debates always seem to end up revolving around our own experiences, which is perhaps inevitable. But the inhabitants of this board are not the typical 'man/woman in the street'.

To solve the retirement issue we need to understand savings strategies which work for 'other types' :-
- the graduate who is one of the 20% young unemployed right now
- the people who are trying to balance long term saving investment, against short term potential increases in rent / energy costs
- those who are worried about retirement, but have unsecured debts to deal with right now.

It's fine to bemoan the 'iphone generation', but we have created a consumer culture whose value has been broadly based on the adoption of these devices!
Sudden widescale adoption of a greater savings mentality today would further hamper the economic recovery.

StevieJ

TheEnigma wrote: »

Yes there is a pension crisis coming and if you have a basic one yourself, then you wont be getting a penny from the government.

Unfair yes thats the way its always been, irresponsible gets rewarded.

I wouldn't have thought it was irresponsible to waste your money on a trivial pension when it is going to gain you sod all, financial planning I would call it

pqrdef

Loughton_Monkey wrote: »

Only when the majority of people realise that they must not spend about 20% of their income does it become rational to discuss pensions/funds/charges/ISA's/IFA's......

So basically society has two choices. It can leave it to people to provide for their own futures and their own rainy days, or it can make collective provision.

Now, knowing what we know about people...

pqrdef

kabayiri wrote: »

It's fine to bemoan the 'iphone generation', but we have created a consumer culture whose value has been broadly based on the adoption of these devices!

We've created an easy-come easy-go culture where people no longer worry about getting lasting value for their disposable income.

My mother was an avid reader, but she never bought a book. Since she was only going to read a book once, she figured it was better to borrow it from the library.

Me, I've got piles of books I haven't even read once. She never understood. More money than sense, she said.

But the habits of those wiho really have more money than sense have filtered down the social order to many of us who like to think we can afford them, but really we can't.

In the next few years I think we'll see a lot of retrenchment of spending habits as people are forced to think about what they might be able to live without.

We might also see big falls in the arbitrary prices of many things that drain people's monthly budgets - pay-TV, broadband, phone services, games and entertainments, credit card interest.