MSE News: Young people 'confused by pensions'

laurel7172

I think the "advantage" I had in understanding the value of pensions was that when I was growing up (I'm now 44), the elderly regularly froze to death.

The relative generosity of pension credit/winter fuel allowances etc ended that, thank goodness, but the mistake was not to introduce their planned withdrawal/compulsory saving for retirement at the same time. The warning example of the last fifteen years has been those with small savings living in greater poverty than those with none at all. Failure to save in these circumstances isn't entirely irrational, as long as you're foolish enough to assume that what the government gives now, the government will never take away.

margaretclare

I would far rather spend the £100k from 68 to 73,
and then hop it in a Euthanarium, then drag out a lingering nightmare in poverty.

Why do you assume you're going to die at 73? Sure, the Bible talks about 'threescore years and ten', but statistics are now showing that anyone who survives to age 65 has a good chance of surviving much longer, into their late 80s or 90s even. Assuming this, one still wants to live life to the full and enjoy each day. Not necessarily living a 'gold-plated' lifestyle, but enough income to enjoy simple pleasures.

Daniel_Elkington

That's a bit harsh Dunstonh!

The main problem is that pension legislation has been developed over a long time and several different pieces of different law.

Pension simplification helped a lot, however there are still loads of different arrangements which do completely different things.

I feel that people need to move beyond the word pension. The pension itself is just a tax wrapper and has some pretty standard rules associated to it. It is the fund or the underlying investment which actually makes the money.

This presents a problem as you have to work out what you want to invest in and then choose the appropriate tax wrapper for that investment, whether it is pension, ISA or even EIS.

So in order to choose a good pension you need to understand how investments work, you have to understand the tax law, you have to understand the contracts that are available and you have to apply all this knowledge in the context of you as an individual with your own needs, wants and desires!

That is a tall order for most people and exactly why they should seek advice. Myself and a number of IFA's do a free initial consultation so find one that does this and go see them.

The main issue I have with pensions is that they are incredibly complex, they may be easy to understand for someone who provides advice on 20-odd a month and has the technical diploma units to provide this advice, but for someone who probably has about 2-3 hours on Google to 'find the best pension' will really struggle.

I also think that a lot of people who use the internet to find things, because it is not their profession, cannot be that thorough in their research as they don't have the right tools for the job - most research tools are very expensive.

dunstonh

That's a bit harsh Dunstonh!

A post in isolation yes. But in context with what else has been written on this thread, no.

mumps

I will always be grateful that when I started in local government in the late 60s we had to join the pension scheme. I would have preferred the extra cash. I am glad I didn't opt out in the 80s when that was a choice. Now I am glad I will be getting this pension next year.

It was one hell of a struggle when we bought our first house, don't think it was any easier than it is now.

So I think we had the better deal with pensions, lots of pension schemes are worse now than they were in the 60s and 70s. Think it is a draw on housing.

margaretclare

Me too, mumps. I'm very pleased that I chose to pay full NI contributions throughout my working life and not the 'married women's small stamp'. I'm also very pleased that I chose to join the NHS pension scheme and stay in it. For both things, I was laughed at many times: 'don't you need the money in your pocket now?' Most of those who laughed then are not laughing now.

mumps

margaretclare wrote: »

Me too, mumps. I'm very pleased that I chose to pay full NI contributions throughout my working life and not the 'married women's small stamp'. I'm also very pleased that I chose to join the NHS pension scheme and stay in it. For both things, I was laughed at many times: 'don't you need the money in your pocket now?' Most of those who laughed then are not laughing now.

Oh yes NI contributions. I paid the full stamp as well, I get tired of women moaning that they don't get the full pension because they didn't pay the full stamp. I wonder how that will work with the pension changes coming in? I know pensions are a nightmare but it really won't seem fair if suddenly they go onto full pensions.

I only wish I could get my state pension at 60, I got caught in both lots of change and will be nearly 65 when I get my retirement pension. I am lucky that I work part time and still have a good salary. I left local govt some years ago so I won't have the full pension from that but I have been gradually reducing my hours and currently do three days a week, hope to do two days next year and then maybe a couple of years doing two half days. To be fair I will still be getting £9k a year for two half days so with my pension I will be able to put some money aside. My LG pension will have to keep me going for about 18 month until I get my state pension. Today I just can't imagine working for another five years, don't know why I feel so tired and aching, maybe I have a virus or something.