Something that doesn't seem to get mentioned

teddy_ruckspin

spadoosh wrote: »

I like to believe i am a 'young person' and do not pay into a pension. Im 24 and have pretty much been in full time employment since turning 16 and never once paid into a pension. The main reason behind this are simply because I do not see it as a worthwhile investment.

If i paid into a pension i would only ever likely see increases in costs and reductions in my lump sum or pension payments. Fewer and fewer people are investing in pensions and they simply aren't sustainable.

So you go and enjoy your pension but please dont be ignorant in the fact that i will not pay in to prop up your pensions to then be dealt the bad hand when its my turn.

Appologies to those who might find this selfish but there are other more sustainable and reliable investments out there than pensions and i would rather spend my time and money persuing those.

Interesting point though OP

Silly attitude, and very misguided.

It's bad enough getting old, but being old and POOR must be diabolical.

RenovationMan

Loughton_Monkey wrote: »

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.

Top post, especially the bit highlighted. This is one of the reasons I didn't want to get dragged into a discussion about which is better, pension vs ISA vs property vs gold vs whatever.

I hold the view that while there are better or worse investment strategies dependant on your specific requirements or circumstances, the main thing is to do something to save for old age. The state pension is a safety net to make sure that no one is in abject poverty when they are old. We should be looking beyond just a safety net.

People should view their retirement savings like their mortgages or other unavoidable outgoings, they should deducted from income as a necessity and not as an afterthought.

chucknorris

atush wrote: »

The problem is you have all your eggs in one basket. DOens't make a whole lot of sense.

Nothing wrong with property being a part- even a large part of financial planning but shouldn't be the be all and end all. Instead of reaping 25% tax free lump sums, you'll be paying huge Capital gains taxes when you sell your property in your dotage.

Hey lets hope so! I hope I pay an absolute fortune in CGT (cos I get the other 72%)

chucknorris

spadoosh wrote: »

I like to believe i am a 'young person' and do not pay into a pension. Im 24 and have pretty much been in full time employment since turning 16 and never once paid into a pension. The main reason behind this are simply because I do not see it as a worthwhile investment.

If i paid into a pension i would only ever likely see increases in costs and reductions in my lump sum or pension payments. Fewer and fewer people are investing in pensions and they simply aren't sustainable.

So you go and enjoy your pension but please dont be ignorant in the fact that i will not pay in to prop up your pensions to then be dealt the bad hand when its my turn.

Appologies to those who might find this selfish but there are other more sustainable and reliable investments out there than pensions and i would rather spend my time and money persuing those.

Interesting point though OP

Selfish? You will be the most likely loser from this stance! What is your retirement plan?

FTBFun

pqrdef wrote: »

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...

As is usual with this forum, there is never a middle ground.

What is wrong with doing both?

pqrdef

FTBFun wrote: »

As is usual with this forum, there is never a middle ground.

What is wrong with doing both?

Basically, the fact that collective provision is redistribution, and redistribution doesn't work if people are allowed to opt out.

drc

We don't have a pension (in our late 30s) because we are effectively paying our landlords pension (rent), local councillors pension (council tax), private energy firm CEO's pension (electricity and gas) etc etc. We simply don't have the money to put into a pension. We do have life insurance with is the best of the worst and we have ISA's etc the allowance of which we use up every year.

My mum had a private pension which is worth considerably less than she anticipated due to the downturn and Brown's envy tax on private pensions, so pensions aren't exactly attractive.

Pensions are a big ponzi scheme and the only generation to really benefit are the boomers who were able to have it all - cheap big house, pension, children, holidays, nice cars etc. Now we are all paying their pensions via BTL, increased taxes etc.

RenovationMan

drc wrote: »

We don't have a pension (in our late 30s) because we are effectively paying our landlords pension (rent), local councillors pension (council tax), private energy firm CEO's pension (electricity and gas) etc etc. We simply don't have the money to put into a pension. We do have life insurance with is the best of the worst and we have ISA's etc the allowance of which we use up every year.

My mum had a private pension which is worth considerably less than she anticipated due to the downturn and Brown's envy tax on private pensions, so pensions aren't exactly attractive.

Pensions are a big ponzi scheme and the only generation to really benefit are the boomers who were able to have it all - cheap big house, pension, children, holidays, nice cars etc. Now we are all paying their pensions via BTL, increased taxes etc.

Your ISAs can be your pension provided you keep them going to retirement. People get hung up on the word 'pension', it's just a savings and investment vehicle to allow you to retire with comfort and dignity.

The state pension is a ponzi scheme in as much as the workers are funding the retirees. Private pensions are fully funded and can be invested in anything you like, even cash.

lazer

This is going to seem controversial, but honestly I believe that if you are in a relatively low paying job, don't bother with the pension as nothing you save can be worth it, as it will just reduce your entitlement to means tested retirement benefits, which will always exist in some shape or form

Life is not all about money, so it is best to enjoy the money at some stage in your life, so if you are already struggling on a low income, why make that struggle harder by investing in a prension scheme, so you can continue to struggle on a low income in your retirement, when if you have no provision some basic pension will be paid.

Those that have been conned into paying into pensions in the last 40 years, ahve nothing to show for it.
A single persons state pension is topped up by pension credit, so unless your private pension brings you above the pension credit level, why bother, as you will finish up with the same amount (plus maybe a little extra as guaranteed savings credit, but then lose entitlement to other "freebies")

And those that have paid AVC's etc, or topped up National insurance to ensure they ahve the qualifying years etc, have all wasted their money, due to the reduction in qualifying years, and the proposed £150 universal pension!

If you are earning decent money, it is of course sensible to pay into a pension scheme!
I personally paid into a scheme from 21 - 27, I have now stopped temporarily to build up a decent deposit (and in turn have lower mortgage payments - so I cna have more spare cash to pay into a pension after I have bought the property)

pqrdef

RenovationMan wrote: »

Private pensions are fully funded.

This is the great lie. Your investments (including cash) will only turn out to be worth whatever they turn out to be worth. This could be nothing or a lot or anything in between, depending entirely on what the economy can afford at the time. Since you don't even know the future real value of cash, let alone anything else, you've got no idea what your pension pot is worth.

The exception is RPI-linked investments. But they're generally based on the principle that the government, or whoever, will be able to pay the returns out of future current revenues, so they're essentially pay-as-you-go.