Re pensions worthit?

grizzly1911

As we as a nation have moved from an “only buy what you can afford” to one that seems to “get it all on credit” is there any point in saving for the future including a pension.


Governments have eroded the benefits from savings investment, removal of dividend tax credits capping of income tax relief at 20% etc.



By Governments, presiding over our demise from a stable manufacturing & agricultural economy to a volatile service & finance economy.



By Governments selling off all our national assets to the private sector particularly foreign interests


The Government says we as a nation can’t afford the public sector pensions schemes.


By Governments suggesting we use our pension funds as down payments on property.




By government offering up the possibility of FTB deposit guarantees to stoke the market with increased lending.


Property for many, particularly in the SE and “nice” rural areas is not affordable.


By governments leading our next generation into even deeper austerity, through front ending the cost of university education, taking it off the balance sheet of the country.


Increasing retirement ages in an effort to close the gap on pension payment periods.


By allowing unchecked immigration from the EU and beyond, allowing a dole queue to effectively be imported.


Poor investment returns and annuity rates, for an extended period with no short/medium upturn in site.


Many not having the disposable income to even contemplate it or achieving little in return.


Pensioners being increasingly disproportionately taxed through consumption.


Perhaps we should live for today kick pension provision into the long grass as our politicians like to do with key issues?


just a thought.

McKneff

Well its all very well saying kick pension provision into the long grass but its the difference between living on the poverty line with just a state pension and living on a state pension with a top up of private pension however little it is.

Its also called taking responsibility for yourself.

robmatic

I think that on balance I would prefer not to live in poverty in my twilight years.

vivatifosi

robmatic wrote: »

I think that on balance I would prefer not to live in poverty in my twilight years.

That's my view too. The system is moving towards an opt out rather than an opt in one. The way pensions are structured suggest that the additional top-up pensions will be harder to get in the future.

I do agree people have a choice as to whether to save into a pension, or save for their future by other means (such as savings, investment, BTL etc), but saving nothing and just hoping you'll get by... Well I just don't have sufficient faith that we know what will happen with the system going forward for that.

chucknorris

robmatic wrote: »

I think that on balance I would prefer not to live in poverty in my twilight years.

Right up until last year I didn't really value pensions much at all, as we have amassed enough money outside of pensions to keep us very comfortable when we retire. However when my wife mentioned in passing that she didn’t want to be the richest person in the graveyard, so we should spend it. I suddenly realised a significant advantage that some decent pension income could offer us. They are a great hedge against either living much longer than expected or spending too much capital mid way through retirement (or a combination of both).

Pobby

Our joint pensions are subject to huge annuity drops over the last 20 years. In fact they have fallen an eye watering 50%. So what would have provided £15k a year is now half of that. Ones pockets are only so deep. So with state pensions and serps we would have had a very comfortable £30k annual income without other provision. We are in the position of being able to buy a couple of flats in the South West to let out but frankly do not want the hassle or indeed we are not mentally BTLers. Still grateful for what we have.

Moving to the South East hopefully next year and pooling resources with a close relative that should give the 3 of us good living space. Bills split 3 ways it seems to make sense.

kabayiri

Pobby wrote: »

...
Moving to the South East hopefully next year and pooling resources with a close relative that should give the 3 of us good living space. Bills split 3 ways it seems to make sense.

Pobby you make a good point.

For some people the traditional pensions industry does not provide good value for money. This could be because they can only save modest sums, or erratic earnings, or they start saving late.

Viewing the problem laterally there are alternatives to providing income during retirement.

For example, the builders who worked for me are soon starting work on converting a house into 2 flats. The owner intends to live in one and let out the other to provide an income. If the build work costs remain under control this seems to be a good income option.

IronWolf

chucknorris wrote: »

Right up until last year I didn't really value pensions much at all, as we have amassed enough money outside of pensions to keep us very comfortable when we retire. However when my wife mentioned in passing that she didn’t want to be the richest person in the graveyard, so we should spend it. I suddenly realised a significant advantage that some decent pension income could offer us. They are a great hedge against either living much longer than expected or spending too much capital mid way through retirement (or a combination of both).

Indeed, my strategy is to build up enough pension that it can sustain a basic lifestyle. The rest of my fortune will be mine to choose what I do with it, knowing I have the pension as a safety net if I decide to waste it all on a yaught or something

RenovationMan

Pobby wrote: »

Our joint pensions are subject to huge annuity drops over the last 20 years. In fact they have fallen an eye watering 50%. So what would have provided £15k a year is now half of that. Ones pockets are only so deep. So with state pensions and serps we would have had a very comfortable £30k annual income without other provision. We are in the position of being able to buy a couple of flats in the South West to let out but frankly do not want the hassle or indeed we are not mentally BTLers. Still grateful for what we have.

Moving to the South East hopefully next year and pooling resources with a close relative that should give the 3 of us good living space. Bills split 3 ways it seems to make sense.

You no longer need to buy an annuity with your pension, you can put it into 'draw down' (subject to restrictions) and live on the investment returns. If your current projections are £7k a year then you must have a pension pot of £150k plus. This is a sizeable amount and well above UK average and I would advise you see an IFA to discuss retirement options.