MSE News: New pension freedom means it pays to know when you'll die

atush

I think euthansia should be made legal/

doesn't mean the state should fund it.

jamesd

kidmugsy wrote: »

What about 3ANICs, jamesd - do you think they can play a useful role as a substitute for I-L annuities?

Depends on the age of the person. Class 3A NICs pay less extra income than deferring at younger ages but become a better deal nearer to age 80+. So defer as first choice, then compare Class 3A NICs to the annuity options. The potential to do better is there, just depends on the specifics.

jaydeeuk1

Pincher wrote: »

Cheeky? I am trying to save you money.


Cost A: Euthanasia £200, Cremation £400


Cost B: State pension until I die, plus health and palliative care.

Cremation seems a bit of a waste. I think the state should be able to 'buy' your body parts in return for a larger pension (bit like selling your soul) and flog them to the highest bidder for transplants etc home or abroad. Be a nice little money earner and it will mean even the benefit lifestyle types will have some value in them.

Why isn't this part of the Green Party manifesto? They love crazy ideas.

Pincher

jaydeeuk1 wrote: »

Cremation seems a bit of a waste. I think the state should be able to 'buy' your body parts in return for a larger pension (bit like selling your soul) and flog them to the highest bidder for transplants etc home or abroad.

At 80 years old, I doubt there's anything worth transplanting. Still, medical students always need cadavers to practise on.

Reaper

It was good to see Martin pointing out people are more likely to under spend than overspend, as most of the media stories had been claiming.

I see 2 main dangers of people managing their own retirement money, and neither is blowing the lot:
1) Putting it in a savings account and "living off the interest". This is a bad idea but I have had long conversations on the forum where it seems impossible to explain to people who do it what the weaknesses with that system are.
2) Fraud. You can expect overseas scam companies offering "guaranteed" high interest rates to step up their efforts to target the elderly when they know many will have sizeable sums under their control.

Pincher

For people with no children to leave the pension pot to, the Tontine idea is worth considering, with some modifications.


You still need an independent third party to run it, which is good job creation for all the annuity clerks soon to be unemployed.


The original Tontine system did not pay out the capital, just dividend, but for pension purposes, it does pay out the capital. A group of people pool their pension pots. The manager invests some of it, with enough cashflow for regular payouts. The payout should obviously be proportional to your original contribution. The pool diminishes over time, but then the survivors get fewer as well.
When there's only one or two survivors, the Tontine can be wound up, and paid to the survivors, unless there are tax or other considerations.


The single person pension pot means you have to save a huge pot JUST IN CASE you need it. The Tontine gives you some of the pooling benefits of a Final Salary scheme.

Eric_the_half_a_bee

Pincher wrote: »

Do people really want to live till 90?

I dread to think I'll be malingering from 80 to 90, and yuck, BEYOND.

I'll ask you again when you're 89

wooder

For the purposes of working out how long your 'pot' will support you, what do people put in the 'life expectancy' box ?

I just filled in my details in the Poodwaddle Life Clock and it says I can expect to live to 86 yrs and 254 days, which means I have about 26 years 253 days left - give or take a few minutes.... so would that be a 'as good as anything' figure to work with ?

jamesd

If you're a man and in normal good health that looks reasonable. The UK cohort life expectancy at age 60 is 26.1 years. For a woman it's 29.1 years.

hugheskevi

I just filled in my details in the Poodwaddle Life Clock and it says I can expect to live to 86 yrs and 254 days, which means I have about 26 years 253 days left - give or take a few minutes.... so would that be a 'as good as anything' figure to work with ?

Using average population stats for pension purposes results in an under-estimate of life, as having a pension is correlated with higher than average life expectancy, probably as having a pension is linked to being wealthier than average which is linked to higher life expectancy.

The Pension Regulator publishes details of the assumptions used by pension schemes on page 6 of the linked report.

Using 86.7 as assumed date of death looks to be rather on the low side, 88 would look to be closer to central assumptions.