Pension Provision - Is £220 a month enough?

kidmugsy

redbuzzard wrote: »

the government's rather blithe answer to the longevity problem of expecting everybody to work until 67 (and rising) is rather fanciful and not very safe for the individual's planning purposes.

The only alternative is to shrink the state massively so that taxes can be lowered and people can afford to save much more for their retirement. Since there is not the remotest chance of any government doing any such thing, then pushing up the state pension age is necessary. That's why so many developed countries are doing it.

dunstonh

Is putting away 10% of your income into your pension too high?

It can be low or it can be high. Without any context to the goal (how much and when and amounts involved; and a few other things), it is impossible to say.

In very generic terms, its a good amount for a 20 year old starting out and planning to retire at state pension age. Its low for anyone starting later than that. its low for anyone wanting to retire earlier than state pension age.

redbuzzard

kidmugsy wrote: »

The only alternative is to shrink the state massively so that taxes can be lowered and people can afford to save much more for their retirement. Since there is not the remotest chance of any government doing any such thing, then pushing up the state pension age is necessary. That's why so many developed countries are doing it.

Agreed - the amount spent on pensions was and would have been unaffordable. My point was that for the government, or the individual, to assume that it will be OK because everyone can work longer will work better in theory than in practice.

The fifty odd year old plumber who came here the other day had knackered knees. Many people are now effectively unemployed at 55 with zero prospect of another job in their previous sphere. They might be able to go and shove the trolleys around at B&Q for a while if they are fit enough, and nothing wrong with that, but that could still knock a big hole in their income between losing their original occupation and a planned retirement based around SPA.

My commentary on this to my children is that they will not only have to pay enough taxes to provide welfare for the previous generation who have not got their heads around the impracticality of planning to retire at SPA, and that generation's own increased longevity, but also if they possibly can they should aim to have enough wool on their own backs by 60 at the latest with which to support themselves.

In other words, they need their own plans, not the state's or their employer's.

jackyann

Towser - just looking at this from another angle.
You have of course, highlighted the situation that carers find themselves in.

I would talk to the Autistic Society (or possible Mencap whose experience of caring for disabled children is extensive).

They will have the experience and contacts to help you make the best decisions - around what benefits your son and you are entitled to, and how to make the most of other savings.

If I understand you correctly, your situation is not simple wanting to pay in enough to maximise your pension, you need to factor in your son's entitlements as well.

mike5678

For me I've been paying 12% since I was 21 in my work pension (max). I'm now 29 and have upped it this year to about 25% with the intention of retiring at 55/57, but no employer contributions on that extra bit.

kidmugsy

redbuzzard wrote: »

My point was that for the government, or the individual, to assume that it will be OK because everyone can work longer will work better in theory than in practice.

I agree entirely.

On a separate point: another way to look at it is that the whole modern system of universal franchise welfare-state democracy is financially unsustainable and will collapse in a heap. It's a pyramid scheme and our present demography dooms it. Trying to rescue it by mass immigration is a no-hoper while the immigration is unselective. Whether that means that your children should save like billy-oh, or live for the day, or emigrate to Singapore, Lord alone knows.

kidmugsy

mike5678 wrote: »

For me I've been paying 12% since I was 21 in my work pension (max). I'm now 29 and have upped it this year to about 25% with the intention of retiring at 55/57, but no employer contributions on that extra bit.

Are you using salary sacrifice? Are you avoiding higher rate tax? If the answer to both is "no" then in your shoes I'd contribute that money to an ISA rather than a pension. The inflexibility of a pension, and the political risk, means that for someone as young as you the 20% tax relief on its own isn't enough of an incentive.

mike5678

Yes the first pension is salary sacrifice and the second is to help avoid HRT and access child benefit.

kidmugsy

mike5678 wrote: »

Yes the first pension is salary sacrifice and the second is to help avoid HRT and access child benefit.

Ah well, you may as well gamble on making pension contributions now, and cut back when Mr Balls (or someone else) cuts the tax relief to 30%.

Towser

But how do the government know how much we have got or not to tax us or benefit us. It must all be relevant somehow.