Preparedness for when

maryb

moneyistooshorttomention wrote: »

...and speaking of retirement and I didn't know that there is currently a review of State pensions underway. Have gathered there is and that review body is due to make its report in May 2017.

Instant calculation on my part personally being "whew...that establishes for sure my State Pension will turn up on time x years y months later than 60" and no further personal attacks due on when it starts.

But.....those due to start receiving their State Pension May 2017 onwards look likely to be in for an unpleasant shock as to when it starts...:(

The reviews are provided for by the 2014 Pensions Act and will take place every five years. However they will seek to provide ten years notice to those likely to be affected (although this didn't happen with the pension changes introduced by George Osborne in his first budget! But that was, to be fair, during a financial crisis). So if you are within 10 years of your expected retirement date in 2017, then, in theory, you should not be affected

Karmacat

moneyistooshorttomention wrote: »

But.....those due to start receiving their State Pension May 2017 onwards look likely to be in for an unpleasant shock as to when it starts...:(

That made me feel sick, to read that Going through a little bit of a crisis here, and as I see maryb just said, near-future retirees have already been through the mill - twice, in my case, and I think in yours, mtstm, with retirement dates. Feeling really bad about this

GreyQueen

Frugalsod wrote: »

And in GQ's case £4 higher.

:beer: It's all good. If I save hard and add another £1.50 to my annual pay increase, I can afford fish & chips from the chippy!

I get p'd off just thinking about pensions, being as my retirement age has been shoved back from 60, to 65 and now to 67. Gawd knows where it'll be when I get there (nearly 17 years to go and already blinking exhausted).

And my local grubbyment pension age is also 67, so can't even hope to go a bit earlier and subsist on that + savings for a while.

Could be worse, tho, at least I'm not one of those poor beggars living in Greece. 1tonsil, if you're reading along, give us an update, please.

Frugalsod

GreyQueen wrote: »

:beer: It's all good. If I save hard and add another £1.50 to my annual pay increase, I can afford fish & chips from the chippy!

I get p'd off just thinking about pensions, being as my retirement age has been shoved back from 60, to 65 and now to 67. Gawd knows where it'll be when I get there (nearly 17 years to go and already blinking exhausted).

And my local grubbyment pension age is also 67, so can't even hope to go a bit earlier and subsist on that + savings for a while.

Could be worse, tho, at least I'm not one of those poor beggars living in Greece. 1tonsil, if you're reading along, give us an update, please.

Yes your pay increase is pathetic and is even worse when you consider that MP's are getting 11% this year alone.

In some respects I do understand the reasoning for raising the retirement age, secondly as a nation we have since the 80's slashed the contributions to our pensions, and if we really want to have a retirement at 65 on two-thirds final salary with current interest and annuity rates as low as they are we really need to be putting far more away each month to cover our retirement. Though if we as a nation did that we would have a depression immediately as 40% of salaries are saved rather than spent. Also would anyone be able to afford to buy a home when they actually saved enough for a pension.

Let me demonstrate. And let me ignore inflation as it just complicates things.

You have an average salary of £25000 now when you retire you will need a pension of £16 667. To provide a pension of that amount at todays interest rates of 2% being very generous would mean a pension pot of £833 333. Now that would require you to put aside nearly half your salary from both employer or employee. Yet most pensions are probably only getting 15% of your salary. Even allowing for compounding of investments and we are still no where close to funding the pension gap. What insurance companies should have been doing when interests were dropped was asking everyone to increase their pension contributions, yet this never happened.

GreyQueen

Frugalsod, would I be correct in thinking you meant that the annual salary was £25,000 before deductions, i.e. the gross salary? In which case the recipient wouldn't be getting anywhere near that in their hand, therefore 2/3rd of the salary would be much less. It'd be interesting to see the calculations done with tax, NI, pension contributions, professional subscriptions (if applicable)/ union dues off the gross.

Or have I got the wrong end of the stick and is £25k the net figure?

And I do agree with you that if we started saving in earnest for our retirements, the rest of the economy would tank shortly afterwards. With many goods and services unbought, companies would fold left, right and centre. Plus the savings capital would be sloshing around in pension funds/ property etc looking for something to invest in, only many things weren't worth investing in because there were no sales, because everyone is saving for their old age........... perfect (and perfectly disastrous) feedback loop. It woiuld cause the asset bubble to end all asset bubbles.

I do have to smile wryly, once the customer has safely gone, at new-minted pensioners who have put in claims for housing benefit and council tax reduction and can't understand why they've been disallowed with their £500 + a week household incomes. But I'm a pensioner, comes the wail of protest, not having grasped ahead of time that you're applying for means-tested benefits and you don't get 'em if you have the means. I can muster limited amounts of sympathy when I can see that paying their rent + council tax still leaves them with £400 a week for everything else.

Many of us working age people would be pretty chuffed with £500+ per week and our time to ourselves, hey?

Frugalsod

GreyQueen wrote: »

Frugalsod, would I be correct in thinking you meant that the annual salary was £25,000 before deductions, i.e. the gross salary? In which case the recipient wouldn't be getting anywhere near that in their hand, therefore 2/3rd of the salary would be much less. It'd be interesting to see the calculations done with tax, NI, pension contributions, professional subscriptions (if applicable)/ union dues off the gross.

Or have I got the wrong end of the stick and is £25k the net figure?

And I do agree with you that if we started saving in earnest for our retirements, the rest of the economy would tank shortly afterwards. With many goods and services unbought, companies would fold left, right and centre. Plus the savings capital would be sloshing around in pension funds/ property etc looking for something to invest in, only many things weren't worth investing in because there were no sales, because everyone is saving for their old age........... perfect (and perfectly disastrous) feedback loop. It woiuld cause the asset bubble to end all asset bubbles.

I do have to smile wryly, once the customer has safely gone, at new-minted pensioners who have put in claims for housing benefit and council tax reduction and can't understand why they've been disallowed with their £500 + a week household incomes. But I'm a pensioner, comes the wail of protest, not having grasped ahead of time that you're applying for means-tested benefits and you don't get 'em if you have the means. I can muster limited amounts of sympathy when I can see that paying their rent + council tax still leaves them with £400 a week for everything else.

Many of us working age people would be pretty chuffed with £500+ per week and our time to ourselves, hey?

My figures did not include taxes or NI, and were super simplified. You could get a better income if you are using your capital as well. Though if you did include tax and NI there is no money left for food or rent. Which is one reason why retirement later helps the problem. When the state pension was introduced it started at 65 when few were ever expected to draw it. So it does need to rise just to make it affordable.

The real problem is apart from inadequate savings there are huge drains via hidden fees that are great for the pension managers or their stockbrokers but over time significantly drain the pension pots of everyone. Also when I started my pension investment returns were quoted as 8% pa but they have barely reached 5% this decade so that shortfall will add up over the life of a policy holder.

GreyQueen

Yes, I recall one article which itemised the number of cuts between the contributor and the eventual fund, and there were 33 places where various interested parties were taking their (legitimate) piece of the action. Which meant that a scant amount of the original contribution was being left in the pot for the pensioner-to-be.:(

Lloyd George's Old Age Pension Act was for people of 70, though, not 65, that came later. It was a huge leap forward for older people who would have relied on charity (familial or otherwise) or ended up in the workhouse, once they were too old to work.

It's a very tough one to work around, isn't it? I'm an early-mid 1960s vintage, too young to be classed a Boomer, I'm classified as a Gen X-er, I think. Old enough to be worried about a longer working life when already wearying in middle age, and getting more and more ticked off (as are my colleagues, regardless of age) about a mahoosive entitlement problem we see in the pensioner cohort, who think that lots of things should be free to them simply because they are pensioners, not because they're hard-up and need subsidising. And not at all happy that they will have to demonsrate entitlement to means-tested benefits to qualify for some things which were previously accessible because of age alone.

But yes, how do you save enough to live on for possibly 2-3 decades without work? If you can pay for a home free and clear by retirement age, you're still committed to ongoing maintenance costs. I regularly talk to solicitors handling the estates of those home-owners who had to get local authority loans to put in new windows/ boiler/ new roof etc and which have to be repaid out of the estate. Plenty of folk are property-rich on paper but cash-poor and struggling in reality.

jk0

GreyQueen wrote: »

It's a very tough one to work around, isn't it? I'm an early-mid 1960s vintage, too young to be classed a Boomer, I'm classified as a Gen X-er, I think. Old enough to be worried about a longer working life when already wearying in middle age, and getting more and more ticked off (as are my colleagues, regardless of age) about a mahoosive entitlement problem we see in the pensioner cohort, who think that lots of things should be free to them simply because they are pensioners, not because they're hard-up and need subsidising. And not at all happy that they will have to demonsrate entitlement to means-tested benefits to qualify for some things which were previously accessible because of age alone.

You're so right GQ.

My mother's siblings, 70 and 84, are both too tight to buy glucosamine which we recommended to them, and instead bother the doctor for drugs.

Crikey, no wonder I can't get an appointment.

moneyistooshorttomention

Karmacat wrote: »

That made me feel sick, to read that Going through a little bit of a crisis here, and as I see maryb just said, near-future retirees have already been through the mill - twice, in my case, and I think in yours, mtstm, with retirement dates. Feeling really bad about this

I've been through the mill once and only escaped a second go at me by not very long at all:mad::eek:

I was astonished and horrified to see women not a lot younger than myself (many of whom had already partially or completely retired) experiencing a "second go" at them by the Government.

I don't think they had 10 years notice!!!!

I was quite appalled watching that - as well as only too thankful the Government hadn't had a second go at me personally.

I don't put anything past them in that respect - but do feel pretty safe personally (courtesy of that review not finishing until 2017).

I certainly don't trust any Government not to declare an "emergency" basically after that time in order to "have another go".

When I look at the fact that many British people in their 60s have a chronic ill health problem (or several) and many of those problems aren't self-inflicted then I do worry for those with non self-inflicted health problems being made to work on with the standard of health some people have.

EDIT; On a - somewhat unrelated - point. I recently read that the Vatican is issuing another Edict from On High at some point very soon (think its today) and the person speaking on their behalf is an academic that stated that the World population should be cut to 1 billion (from the current 7 billion and growing). I cant quite see the Catholic Church going so far "against the (anti contraception) grain" as to say something like that - but has anyone read anything today about this???

[Deleted User]

We're both pensioners, I'm 67 and He Who Knows is 70 and I don't think anyone owes me a single thing, nor do we think we should be given anything just because we're pensioners. I DO know we are in a better position than many other folks, we've been sensible with our earnings all our lives and lived a sensible and frugal life and made the right choices to enable us to now own our home. We didn't do all the partying and holidaying and aquisition of material things that most of our peers did, we've kept ourselves active and live life beneath our means NOT because we HAVE to but because we CHOOSE to and will continue to do so as long as we have life and breath. Having said that we are both very grateful that the NHS can provide us with the meds that we both need to keep us healthy me for high blood pressure and him for atrial fibrilation, we don't however expect the NHS to pick up the bill for every ache and twinge we get, they're not a bottomless benevloent fund. I know we're not typical and we're luckier than most but we were abstemious when we needed to be, put our cash into the pension pot we knew we needed to build for this part of our lives and really don't expect any extras from anyone or any government body,we've made provision for our older age and we'll manage our own affairs and finances and make sure we are self sufficient in all things if possible until the day we die.