Raising the pension age in order to pay for pensions

HAMISH_MCTAVISH

kabayiri wrote: »

I confess I'm a little confused.

The mass immigration we have witnessed and continue to witness was supposed to solve our pension woes.

Don't be so daft.

We've had nowhere near enough immigration to solve our pension woes.

If immigration had been triple what it was for the last decade, and we could keep it going at that rate for another 2 or 3 decades, there wouldn't be any need for pension age changes at all.

And indeed, we'd have the best performing economy in Europe with one of the smallest debt burdens, overtaking the Germans who are heading for rapid economic decline an increasing debt thanks to an ageing population and declining workforce.

Sadly, however, we will have to go through a lot more needless pain before our current crop of spineless politicians have the nerve to explain reality to the electorate.

Loughton_Monkey

grizzly1911 wrote: »

Interesting that many defensive equity funds often have both tobacco companies and pharma/health companies in the portfolio top ten.

Funnily enough, my AXA Framlington Health R Acc fund has been my best performing fund this year.....

CLAPTON

grizzly1911 wrote: »

And even more unemployed people reliant on charitable and state hand outs to survive.

The same sentiment was made when they invented steam shovels and computers.

so basically, no demographic time bomb, and we can look forward to increasing wealth and riches?

grizzly1911

CLAPTON wrote: »

so basically, no demographic time bomb, and we can look forward to increasing wealth and riches?

A very small number will lookforward to increasing riches.

grizzly1911

HAMISH_MCTAVISH wrote: »

Don't be so daft.

We've had nowhere near enough immigration to solve our pension woes.

If immigration had been triple what it was for the last decade, and we could keep it going at that rate for another 2 or 3 decades, there wouldn't be any need for pension age changes at all.

And indeed, we'd have the best performing economy in Europe with one of the smallest debt burdens, overtaking the Germans who are heading for rapid economic decline an increasing debt thanks to an ageing population and declining workforce.

Sadly, however, we will have to go through a lot more needless pain before our current crop of spineless politicians have the nerve to explain reality to the electorate.

Seems little point in endless immigration whilst we produce little that anyone else wants to pay us for.
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CLAPTON

grizzly1911 wrote: »

A very small number will lookforward to increasing riches.

you mean just like the past

most people are poorer now than before we invented the steam hammer?

IveSeenTheLight

Loughton_Monkey wrote: »

Yes. I'm fully aware that the £20K is secured income. That can include state pension. Some of us tend to have a FS scheme well into that so all our other free pension pots can go into flexible drawdown. I still bung in my £3,600 a year, despite drawing out on others. Never look a gift horse and all that.....

Sun having gone down, time for a large gin & tonic while I study how much better off Gideon has made me!

SO, requiring a pension pot of £260k upon retirement to enable a pension of £20k per year, means that even with only a 3% return on the invested £260k, it's providing for essentially 17 years of pension provision.

With the retirement age increasing post 70, that means the provision is being provided for at least until people are 87+

I'm struggling to conceive that the average death age is at this level.

The more I look at pensions, my conclusion is that they are a scheme to try and ensure an income into retirement, but moreso is just a way for pension administrators to make money.

Anyone with a little bit of sense would be able to get a better return on that investment

chucknorris

IveSeenTheLight wrote: »

The more I look at pensions, my conclusion is that they are a scheme to try and ensure an income into retirement, but moreso is just a way for pension administrators to make money.

Anyone with a little bit of sense would be able to get a better return on that investment

For years (decades!) I wasn't drawn to pensions for the reasons that you highlight, but a few years ago I realised that we have an awful lot of assets to liquidise and spend (no children) before death. The danger is that this is done too early before death, so for me they are more of a hedge against living much longer than expected, the more pension income I obtain the more capital that I can spend. My wife isn't as keen as I am, she argues that if you die early, you don't get a good return, but for me the tragedy of that scenario is that I have died early, my wealth is a distant second, what use is it having higher returns if you are dead?

EDIT: Additionally I would add that when you get within 10 years of retirement, and you have already made your money and you are more looking for consolidation than wealth creation, they give a reasonable return. I will probably retire sometime between 3 and 6 years from now, I think it is quite good that I can get 40% tax relief, take a 25% tax free lump sum and wait to opt for drawdown rather than have to buy an annuity, my teachers pension plus the state pension will give me most (if not all) of the 20k secured pension income to facilitate drawdown on my private pension.

IveSeenTheLight

chucknorris wrote: »

For years (decades!) I wasn't drawn to pensions for the reasons that you highlight, but a few years ago I realised that we have an awful lot of assets to liquidise and spend (no children) before death. The danger is that this is done too early before death, so for me they are more of a hedge against living much longer than expected, the more pension income I obtain the more capital that I can spend. My wife isn't as keen as I am, she argues that if you die early, you don't get a good return, but for me the tragedy of that scenario is that I have died early, my wealth is a distant second, what use is it having higher returns if you are dead?

EDIT: Additionally I would add that when you get within 10 years of retirement, and you have already made your money and you are more looking for consolidation than wealth creation, they give a reasonable return. I will probably retire sometime between 3 and 6 years from now, I think it is quite good that I can get 40% tax relief, take a 25% tax free lump sum and wait to opt for drawdown rather than have to buy an annuity, my teachers pension plus the state pension will give me most (if not all) of the 20k secured pension income to facilitate drawdown on my private pension.

My thoughts on it are that I will want to spend more in the early years of retirement than I will in later years.

As an example, if I retire at 67 as per my current government defined retirement age, I may wish to have say 8 years of higher expenditure, enjoying retirement, going on multiple holidays etc.
Then when I'm 75 - 80, I start to curtail the high life.
When I'm 80+, I'm probably happier to settle down at home with the pipe and slippers.

So my expenditure needs will be higher in the earlier years than in the later years.

I reiterate my point that having paid into a pension for 50+ years, I'd like to have the choice what to do with my fund.
I may find myself in poor health, maybe with terminal cancer and only a few years expected left, which I may then want to spend that life savings frivolously as opposed to having £260k sitting in a fund to give me a £20k per year to spend.

MFW_ASAP

IveSeenTheLight wrote: »

The older I get, the more I wonder the value of pensions.
Sure, one must provide for ones self in retirement.

That said some other countries models are for families to be more communal, meaning that three or four generations live in the same household.

This aids childcare as the older generations can support that, whilst the younger generations support their elders in retirement.

I'm not saying this is an ideal model, but it is one that works for others and may support the issue you describe above

We're doing both. I have paid into pension plans since I started work and have put away about 10% of my gross income as an average over my working life. I've always done this and as it comes out of my gross pay, I've never missed it.

Three years ago my parents were starting to struggle, so we converted a barn to a 1 bed apartment and they have moved in. They get financial and physical security and we get free childcare and peace of mind knowing my folks are warm and safe.