Are the young losing all faith in pensions?

geelamch

gadgetmind wrote: »

Or just throw them some fish three times a day.

Ok I will go with that.cheap fish or the usual !!!!.

geelamch

To go back on a serious note.i appreciate that pensions are not a pyramid scheme or anything of the the sort as the monies should be dispersed and spread even,however the more we can encourage investment in our future then perhaps the pension companies who prop up a lot of institutions can and should vote for a bigger say in bonus / share options that the directors of this country seem to take as their individual rights then yea for us.i am not against big bonus or performance pay.even managing directors are workers,but bonus against company debt loss !!!!in riles me.

nicknameless

Public sector employee (not wanting fishes thankyou), 41. Not sure how young that is? Myself and long term partner both pay into occupational pension schemes. As a HR tax payer I've also started a SIPP, and we've started investing via S & S ISAs.

We've always been in pension schemes but I've only taken retirement planning seriously in the last 18 months or so. When I say retirement planning I mean making a reasonable estimate of what we need to accrue, how, where and at what rate in order to achieve an 'earlyish' retirement.

Friends around me are quite honestly ****ed in comparison and not because they don't have FS public sector pension schemes to fall back on, but rather because they are clueless, financially flagrant, or have kids!

geelamch

nicknameless wrote: »

Public sector employee (not wanting fishes thankyou), 41. Not sure how young that is? Myself and long term partner both pay into occupational pension schemes. As a HR tax payer I've also started a SIPP, and we've started investing via S & S ISAs.

We've always been in pension schemes but I've only taken retirement planning seriously in the last 18 months or so. When I say retirement planning I mean making a reasonable estimate of what we need to accrue, how, where and at what rate in order to achieve an 'earlyish' retirement.

Friends around me are quite honestly ****ed in comparison and not because they don't have FS public sector pension schemes to fall back on, but rather because they are clueless, financially flagrant, or have kids!

I may be wrong(again)my wife and I don't have the nicest house,we don't have big tv s.we earn £60000 approx.we invest in various £21000 each year .i know this perhaps comes across as excessive,our parents died young and had no provision for dependants etc.we still holiday a few times each year.we could buy the big car etc but we have swore blind that our next phase will be early retirement ,take the money,leave everything to our two kids.well take the cash and that will be plenty for us,we are used to not a lot.we plan to have an excessive living on £33000 a year.some people couldn't but to us this will be paradise.

hugheskevi

The way I see the problem (as a 35 year old, with lots of pension:D) is the sequencing of financial obligations. They are getting ever bigger and crowding out pension planning.

The first major financial undertaking is likely to be saving for a deposit to get a mortgage. That's probably about £20,000 (but will vary a lot depending on location, although that variation may well be somewhat correlated with earning potential).

At some point, there will be a need (desire?) for a car. Probably somewhere between £5,000 to £10,000

Marriage, rings, honeymoon, etc will be another £10,000 or so.

Then along come children and childcare costs/loss of earnings. I understand those costs lessen as kids get older and go to secondary school but that is still the best part of a decade.

Foreign holidays will probably be a few thousand every year or so.

Then a few major random expenses such as house repairs and possibly debt repayment. And in the south east you are probably going to run into higher rate tax which starts at a low level relative to house prices (if all you have is one person in a household just at higher rate tax, you are going to struggle to buy much property).

Whilst a lot of the above is optional, it is nonetheless normal. But without decent jobs and/or parental support, it is going to be hard to fund it all let alone set aside 15-20% or so into a pension.

In the days of low-contribution final salary pensions you were put into automatically, there wasn't much of a choice and pensions were taken care of automatically. Having said that, the UK has always had about 50% of employees saving into a pension so it is dangerous to make generalisations about 'the good old days.'

With modern DC pensions, it is going to be an uphill struggle to persuade people they should live in a smaller house/trim their wedding expectations/go on a cheaper holiday/drive a small car in order to put more money into an uncertain investment with a very chequered history (pensions as a brand probably rival Betamax for perceived popularity amongst many folk) that they won't be able to touch for several decades.

Without one of salary sacrifice, employer contributions or higher/additional tax relief I wouldn't touch pensions whilst young and have a decent amount of sympathy given just how much we are expecting from our younger generations now in terms of funding housing and pensions.

racing_blue

Pension and house are like soil. Everything else is like lettuce.

I hope my kids see that if they care of their soil in the Spring, they'll be able to grow their own lettuce. Otherwise, come late Summer they'll have to get it from the supermarket of work, or settle for those withered scraps that get passed around.

rpc

It's a lack of education.

You don't learn about pensions in school and employers aren't fussed, so what is picked up comes from the media and the grapevine with tales of terror and woe. Most people don't really understand the maths behind retirement planning and think

1 - they can do something about it later on or
2 - pensions are a scam and therefore no retirement provision should be made at all
3 - I'll buy a BTL and use that, it worked for my baby-boomer parents
4 - I'm not going to live that long because I don't understand life expectancy properly

It's a big problem and I only hope I can educate my kids properly (eldest is 2, so a little young to start).

I'm 32 and have a 60ths final salary pension, having worked for the same company since I graduated. Before I started, I showed the pensions stuff to my dad to ask his opinion (I was fairly clueless). He's a CIPFA so I thought I would get good advice. His suggestion was to join it before they shut it. I joined it, they shut it to new members a few years later. Probably the best financial advice I ever received!

atush

hugh, that is a cheap car lol

And last time i saw an estimate- the average uk wedding was over 20K lol.

Good luck ;-)

Lokolo

rpc wrote: »

It's a lack of education.

You don't learn about pensions in school and employers aren't fussed, so what is picked up comes from the media and the grapevine with tales of terror and woe. Most people don't really understand the maths behind retirement planning and think

But it doesn't mean people can't ask.

Yes we get a lot of silly questions on this forum, but at least the people are asking. I didn't learn how to drive in school or through my employer. I went out and found a driving instructor.

I didn't know how to unblock a toilet, so I went and found out.

Why can people not do the same about pensions? Well, they can. But they choose not to.

I chose to and glad I did. You did, and you are glad you did. Others could to, but they just don't give a damn.

corbyboy

I am in my late 20s and work for the NHS so joined the scheme as soon as I took this job six years ago.

The problem with being so far away from retirement is that the goal posts will be moved so many times before I retire it's hard to know what will happen.

The final salary is in the process of being stopped and moved to career average, although not for anybody retiring in the next decade.

For this we have been promised no more changes for the next ten years. But as we know the law can be changed at any time and we will probably go through a few governments by then. So this promise means nothing.

Also, can I just make it clear that I am very lucky to be offered such a generous pension. So please, no "it's better than mine" comments.

The state retirement age will be increased at least 3 or 4 times before I retire and I can genuinely see a point where there will be no state pension for people who have sorted out their own pension provisions.

Or perhaps it's something to do with iPods, like some people on this site like to attribute all youth-related problems to.