How much is needed for a pension?

marathonic

Southend1 wrote: »

Unless you lose a load of means tested benefit because you have a small private income, in which case every penny paid into the pension is wasted.

Even if means tested benefits were available at retirement which, as per the new state pension plans, they won't be, I wouldn't like to be basing my retirement planning on the receipt of means tested benefits. That'd just be planning for failure!

atush

Except the pension credit is being replaced by the higher new SP.

£200 was just what I put in the calculator, I wouldn't feel comfortable putting much more than that into something I might never see.

Why do you think you'll never see it? Are you not in good health? Even if you died, your family/spouse/dependents would inherit it.

You seem to have a lot of preconceptions about pensions(some of which have been corrected above), that are wrong. So be careful of making life decisions using wrong information.

p00hsticks

atush wrote: »

Except the pension credit is being replaced by the higher new SP.

But that's not means tested, is it, so it's not quite the same ?

As I read it, Southend1 was making the point that currently, if you only put away enough for a small private pension, and end up with no other savings, then you could find yourself no better off than someone who has not bothered to make any provision for their future but then claims Pension Credit to take them up to the recommended minimum limit of £140-odd.

Under the proposed new legislation, with the higher pension for everyone but no means-tested pension credit, then in simple terms, people who have put money into a pension will always be finanicially better off than those who haven't.

hugheskevi

It should be remembered that under the proposed single-tier pension, up to a third of all pensioners will be in receipt of means-tested benefits (Council Tax Benefit, Housing Benefit and Pension Credit) even once the new system is fully established (ref: Pension Policy Institute, para 51 and 52 on pages 14 and 15):

Although the White Paper policy differs from the Green Paper policy significantly in the short term, long term impacts are likely to be similar... PPI estimates based on the Green Paper proposals suggest that in 2050 up to a third of pensioners might still be eligible for at least one of Pension Credit, HB or CTB.

[Full report here, see Table 19 on page 60 for full detail]

None of that is to criticise single-tier, I support the policy myself, but it is important to recognise there will still be a lot of means-testing about in the future, with 35% of pensioner households in receipt of means-tested benefits under single-tier in 2050, compared to a forecast 45% under the current system. For those who will not own their own homes in retirement and have low incomes, the incentive to save will continue to be questioned.

Also, Pension Credit will not be abolished - the Savings Credit component will cease, and the Guarantee Credit will be set below the single-tier rate, but the benefit will still exist as a fall-back for those without full contribution records.

TWATTY

[QUOTE=Why do you think you'll never see it? Are you not in good health? Even if you died, your family/spouse/dependents would inherit it.

You seem to have a lot of preconceptions about pensions(some of which have been corrected above), that are wrong. So be careful of making life decisions using wrong information.[/QUOTE]

I'm in good health, just my lifestyle. I've had more than my fair share of close calls. I've got my mum and sister who are financially good so whatever I end up doing it's for myself.

dunstonh

I'm in good health, just my lifestyle. I've had more than my fair share of close calls. I've got my mum and sister who are financially good so whatever I end up doing it's for myself.

You neednt bother with property or alternatives then. Everything has the same issue if you dont plan on being here in later life.

JuicyJesus

dunstonh wrote: »

You neednt bother with property or alternatives then. Everything has the same issue if you dont plan on being here in later life.

Since I can't PM him for some reason... dunstonh PPRed? Seriously? Why?

gadgetmind

There is a thread on this very subject and it's best taking discussion there.