Rule of thumb?

atush

Guitarman, if you have your deposit, why are n't you buying?

guitarman001

I refuse to buy into this insane market.

I was right not to buy in 2007 (some of my friends are £30k in -ve equity!) and although I do expect a slight rise now (due to insane government intervention) I just refuse outright to buy right now. Prices are still ridiculous and I'd rather stay and save for a little longer and then move country! Sick to the back teeth of property mania in this country, I find it sickening. Long-term without wage growth (and assuming rates go up and source of credit remains strict) I can't see prices going up too much, in fact I'd hope for them to come down. I'd be saying the same if I owned! One of my friends just announced to me he's going into BTL - yet another amateur BTL 'investor' taking homes away from others to satisfy his own ends. Plus, buying costs a lot in terms of fees and I'm not ready to put down those roots and pay all those costs - feels too 'forever' for me. Maybe I'll move into male stripping or the oil business or move abroad, who knows (male stripping obviously a joke!). I feel like I need a MAJOR cash injection right now - I've got a great job, great boss, it's all good - but coming to age 30 and looking at what I've got... gets me thinking. One of my mates changed industry to oil maybe 2 years ago and now he's raking it in, £90k a year - I don't think he's going to have problems. I need a hit like that, even if it's short-term contracting. Problem is I love where I work and anything else is a gamble in this economy.

kidmugsy

Here's something to cheer you up:

Meanwhile, defined contribution (DC) pension schemes demand large contributions. Consider, for example, a 25-year old entering a DC scheme with a view to retiring at 65 on half salary. Assume that salary, contributions, and the ultimate pension are all inflation-linked. If the after-costs real investment return is 4%, this individual will need to contribute 10% of salary. While this might have been a plausible assumption five years ago, a more realistic assumption is that the after-costs real return will now be 1%–2%. This requires a contribution rate of 16%–20%.

Source: the rather impressive
http://www.investmenteurope.net/digital_assets/6305/2013_yearbook_final_web.pdf

guitarman001

Thanks for that lol!
I agree though - returns like that are what I consider realistic after fees, inflation, actual performance. I'd want a million in the bank for retirement but it isn't going to happen unless something big changes!

atush

Where do you live? Most pl;aces prices are starting to rise (or have ben rising a hweile ie the SE) so i'd, as the saying goes

"Sh*t or get off the pot!"

Start looking, prices seem to be going only one way.

guitarman001

As I said (or did I?) I'd rather move country than buy into an already overpriced market. Prices are rising in Dublin and London and that's about it

jackyann

I apologise for asking what may seem like a very basic question. Without wanting to start up to public service pension debate (!) I never thought of a "pension pot" - I knew that I would get 1/80 of my final salary for every full year I paid in.

When I began rooting about in here, most people said (of saving into a pension pot) "you buy an annuity, which gives you about 3% of your pot".
As I am interested in what my children are contributing and how they will manage their pensions ( as well as whether I can help them) I would like to know how much annuities vary. I have seen posts saying that they are poor at the moment, but I don't know how variable they are.

Thanks in advance.

Lokolo

jackyann wrote: »

I apologise for asking what may seem like a very basic question. Without wanting to start up to public service pension debate (!) I never thought of a "pension pot" - I knew that I would get 1/80 of my final salary for every full year I paid in.

When I began rooting about in here, most people said (of saving into a pension pot) "you buy an annuity, which gives you about 3% of your pot".
As I am interested in what my children are contributing and how they will manage their pensions ( as well as whether I can help them) I would like to know how much annuities vary. I have seen posts saying that they are poor at the moment, but I don't know how variable they are.

Thanks in advance.

They are quite variable. A few years (!) ago you could get savings rates of 6%+, now you are lucky to get 3%. Annuities are based on markets and gilt returns, so as things in the world get better, annuities get better. It is difficult to predict what things will be like in 40 years, the best thing you can do is to prepare for the worst.

yorkshireman2

guitarman001 wrote: »

As I said (or did I?) I'd rather move country than buy into an already overpriced market. Prices are rising in Dublin and London and that's about it

Do you only do capital cities?

You don't need to move countries to get a more sensible housing market.

bigadaj

yorkshireman2 wrote: »

Do you only do capital cities?

You don't need to move countries to get a more sensible housing market.

Possibly, which leaves him with Edinburgh and Cardiff, I know the former is pricey but Cardiff ain't too bad.