How old will you be when you can retire?

CLAPTON

gadgetmind wrote: »

I agree regards the meddling, but all of the rest is perfectly normal volatility that usually works in your favour. As for annuity rates, 1) you don't need to use an annuity, 2) anyone taking out an annuity over recent years would probably have done well out of bonds so it's swings and roundabouts.

I expect the next 20 years to be more of the same (but different) yet I will continue to fund my pensions and I *strongly* recommend that others do the same.

I believe the vast majority of people buy an annunity.

Perfectly normal volatily to some maybe but a great many people would be horrified if this was explained to them.

Do you any fact about actual pensions taken being greater after 2008 than prior to this?

N1AK

wotsthat wrote: »

The best solution is one which makes clear the risks and then leaves people to it. Minimum involvement by the state other than to ensure, where possible, people are forced to save for a subsistence pension.

The best solution is we find a source of infinite free energy and robots do all the work so we can all live luxurious lives; that doesn't make it an insightful point.

We can't just leave everyone to it. Even ignoring any moral or ethical considerations there are simply too many people who won't save for retirement voluntarily no matter how well it is explained. They won't vote for a party that would leave them destitute and their families and friends won't either. Ergo, the let them live with the consequences isn't a viable solution.

That said, we both think that the government forcing people to save for retirement (by whatever mechanism) is part of a solution.

Where we disagree is I don't think that forcing people to save for retirement is 'leaving them to it'. Left to it, they would not save

N1AK

CLAPTON wrote: »

I believe the vast majority of people buy an annunity.

One thing I don't understand is why there isn't a charity doing annuities?

Offer an annuity rate based on the average of the best 5 available elsewhere or some such but with one difference: Any money you have left over after paying pensions and keeping a safe reserve would be used to increase pensions rather than claimed as 'profit'.

sabretoothtigger

Sounds like a mutual society to me.


Charity cannot cover such massive liabilities. The difference between living to 65 or someone who needs paying every year till they are 100 is beyond normal risk.
Pension costs can bankrupt the main business of most companies

CLAPTON

N1AK wrote: »

The best solution is we find a source of infinite free energy and robots do all the work so we can all live luxurious lives; that doesn't make it an insightful point.

We can't just leave everyone to it. Even ignoring any moral or ethical considerations there are simply too many people who won't save for retirement voluntarily no matter how well it is explained. They won't vote for a party that would leave them destitute and their families and friends won't either. Ergo, the let them live with the consequences isn't a viable solution.

That said, we both think that the government forcing people to save for retirement (by whatever mechanism) is part of a solution.

Where we disagree is I don't think that forcing people to save for retirement is 'leaving them to it'. Left to it, they would not save

the current state pension is 'forced' saving: the easiest option for the poorer people is simply to increase the state pension

N1AK

Loughton_Monkey wrote: »

A very interesting statement. This country has not done "destitute" for many years. Basic State Pension is certainly enough to avoid being "destitute" [by my definition anyway].

But I sense you have a more generous view of destitution, and that someone who "should" have had (say) pension of £7,000 basic plus £5,000 accrued from enrollment at minimum level in NEST - but who deliberately chooses to opt out and spend it - would get some form of extra benefits in your book?

Ignore NEST. I'm talking about people who have no private pension, people with NEST will, as you note have a pension.

Someone retiring today on their own having worked but never saved for retirement in cash or pensions is entitled to:

1. The state pension: £5,728
2. Pension Credits: £1,850
3. Housing Benefit: £4,740
4. Council Tax Support: ~£1,100
5. Free prescriptions, winter fuel payment, bus pass and other age based benefits.

That's over £13,500 a year (more than your NEST example!).

So what's your point about the government being wise not to force? We're handing people who don't save for retirement massively more than just the state pension.

I'm saying we won't cut that back very much for a mix of political and moral reasons. NEST has helped by getting many more people saving for retirement. What I am saying is that the majority of people opting out of NEST are going to receive a considerable amount of government subsidy so why are we letting them opt out?

wotsthat

N1AK wrote: »

That said, we both think that the government forcing people to save for retirement (by whatever mechanism) is part of a solution.

Where we disagree is I don't think that forcing people to save for retirement is 'leaving them to it'. Left to it, they would not save

If the only thing we disagree on is the definition of 'leaving them to it' then I think we're in broad agreement.

N1AK

sabretoothtigger wrote: »

Sounds like a mutual society to me.

Charity cannot cover such massive liabilities. The difference between living to 65 or someone who needs paying every year till they are 100 is beyond normal risk.
Pension costs can bankrupt the main business of most companies

You don't offer pensions to one person though. If you have 10,000 pensions then you'd need the entire group to live considerably longer than anticipated not the odd few. There's no pension fund in existence that could handle a sudden, large, and unexpected increase in life expectancy.

A charity, mutual or whatever can afford to hold considerably larger reserves than a profit making business because their aren't shareholders who want to claim the profit.

N1AK

CLAPTON wrote: »

the current state pension is 'forced' saving: the easiest option for the poorer people is simply to increase the state pension

Sorry can I clarify you mean some proportion of general taxation is 'forced' saving in that it funds the state pension? If so then yes I agree. The biggest issue with that current solution is that no one has any idea what the state pension will look like etc when they get there.

In my opinion the advantage of handling this differently is that it will be a real pension pot that belongs to that person. I can't influence my state pension by saving more (except to probably get less benefits) etc but I could look at what my 'forced' pension pot is going to give me and how increased contributions would alter that.

The state pension based system is flawed. I can comfortably afford to pay into a private pension, but I have so little faith in the system that I'm perpetually considering stopping. The government is having to bribe me with tax relief, my company is paying in more than I am and I pay less tax via salary sacrifice; all that combined is just enough to make me choose a pension over savings that I can take elsewhere.

sabretoothtigger

Thats the socialist doctrine but actually capitalism allocates money best and shareholders only gain from profits, they cant really demand a cut if money is needed elsewhere.


The idea a company owned collectively or by government, no longer needs to make a profit on its business is a tragic fallacy.
'They dont have to pay shareholders' You know they dont always get paid anyway, sometimes they are the ones paying