ITV prog tonight on pensions and benefits

Ainsley1

Basically comparing current well off pensioners and prospects for the younger to retire highlighting the recent financial times tweet that an average 25 year old should be saving 800 pcm to retire as well off as current pensioners.

I have every sympathy for those in early life looking at the prospects of working to 77 years of age, as is reported. It is a daunting prospect. That is 12 years longer than I looked forward too and I feel lucky that it wasn't an older age sooner as I still got state pension at 65, as did my parents, despite greater longevity. We (the gov) ought to have taken action sooner, in fairness.

However, I maybe mistaken but I feel things, although difficult, are not as bad as maintained. Many modern families are far too materialistic, not wishing to sacrifice in the shorter term for the long term good! Pension planning and housing purchase or investments come into that so that the stress is less in later life at a time when you might be healthy enough to still enjoy some retirement time......or have to pay for care!!!!

Housing is often mentioned -such as did the family in the programme who said they could not afford to buy the house they lived in (rented) despite their laudable £20K saved for a deposit. So I did a bit of recollection. Neither could I at their age but......
I purchased before starting a family;
Had to move to an area not too desirable;
Never had a holiday (not even a non foreign one) for many a year, no TV, oldbanger of a car eventually (I have never had a new one), made my own kitchen, few gadgets, second hand furniture, nowhere near as rich as my parents who had worked many a year but made lots of lifestyle choices!

Out of interest I just checked the price of property in the town I purchased in. At the time a virtually identical 2 bed flat was just over 3 times my salary (it was average at the time). Today's average is quoted at £30K and property is going for £70K to £90K. Do you need to do the maths?

Now that £800 pcm to get you pension that's about 26% of an average salary. Mine was from first adult work 19% of my renumeration so 560 punds equivalent but with a non working wife for much of or early life, not the two incomes typically £50K which brings down the rate to 16% of renumeration.

Not entirely the whole situation but have I made a point?

Oh and I forget, apart from child allowance later when family was started, no handouts from the gov't, and mortgage interest rate of 12% (up to 25 for a short time!!!!).

Cannot help feel some want their cake and to eat it too.
Yes there are some pensioners who are doing fine, living longer and healthier but some still desperately poor too and the programme in spite of a passing mention was not balanced in this respect.

bob_a_builder

I thought the current average salary is 26k

your very lucky to live in a location where you can buy property for 90k

Here in berkshire a 2 bed flat is 200k upwards - so more like 8 or 9x multiple rather than 3 (as it was when I first bought)

bigfreddiel

bob_a_builder wrote: »

I thought the current average salary is 26k

your very lucky to live in a location where you can buy property for 90k

Here in berkshire a 2 bed flat is 200k upwards - so more like 8 or 9x multiple rather than 3 (as it was when I first bought)

The point is we would all like to have lived where we wanted to when we were young, but couldn't because it was all too expensive. So you live where you can afford and commute to work.

When I started out in the 70's there was no way I could afford to,live where I was brought up - expensive part of north London.

I had to move to rural north Hertfordshire and buy a tiny terraced two bed for what I could afford, £6k!

You can still do that now. There is no difference.

Oh, maybe there is, in the 1970's I didn't rinse my income on mobile phone contract, new car, Sky TVs, Netflix, gym membership, broadband and of course credit card debt. Life was simple then.

Cheers fj

Ainsley1

Cat10, yes in general you are correct about the high interest rates. I was referring to what I had to pay fortunate to be in the region of 12% (even when rates were often higher) but a rocket to 25% for me personally was rapidly acted upon so was a short term blip. Irrespective of those differences we experienced significantly higher interest rates than the very low rates for many a year now. It is often just a different problem, getting a loan currently (following the rediculously easy ones at the turn of the millennium) and actually paying for what you could get in the 70s and 80s.

Bob yes people in your area have to pay a lot owing to supply and demand. Lots of places though where property is still relatively cheap compared to average income (I quoted what I thought I heard on the programme - the couple definitely had £50K income but no mention if that was gross or net).

Oh and did I mention income tax was greater then in the 'good old days' but counteracted by mortgage tax relief though....but hmm no ISAs or SIPPS too.

westv

bigfreddiel wrote: »

Oh, maybe there is, in the 1970's I didn't rinse my income on mobile phone contract, new car, Sky TVs, Netflix, gym membership, broadband and of course credit card debt. Life was simple then.

Cheers fj

Yes, but without broadband how would you read MSE forums?

Malthusian

Basically comparing current well off pensioners and prospects for the younger to retire highlighting the recent financial times tweet that an average 25 year old should be saving 800 pcm to retire as well off as current pensioners.

In general these figures are complete rubbish and based on the assumption that the average 25 year old will need to use the whole of their pension fund to buy a standard index-linked annuity with minimum 50% spouse's pension the moment they hit State Pension Age. Mindless cargo cultism.

*edit* Why publications like the FT publish this exclamation marks is beyond me. The only message to be drawn from such figures is not "you better get saving now" but "it's all hopeless, you'll never save enough for retirement, give up and spend all your money on booze and hope the State will provide".

I expect such rhetoric out of the Grauniad who love to wring their hands and tell their readership that they are lost in an uncaring society and the individual is weak and powerless and only the State can save them, but not the FT.

greenglide

Yes, but without broadband how would you read MSE forums?

2,400 bps dial-up modem I would have thought would be the cutting edge.

kidmugsy

Malthusian wrote: »

I expect such rhetoric out of the Grauniad who love to wring their hands and tell their readership that they are lost in an uncaring society and the individual is weak and powerless and only the State can save them, but not the FT.

The FT is written and edited by a bunch of pinkos.

PasturesNew

A lot of this type of advice is intended for the better off - but just petrifies the less well off, who can skip around and ignore it all.

I will get the basic state pension when it's my turn and, to be honest, on the basis I own my house so have no housing costs, I'll be better off than in most jobs after paying rent and the cost of commuting etc. If I were renting, that'd be paid too at that stage. So, no worries.

They tell you these figures, but don't then say who they're aimed at.

£800/month certainly isn't the right advice for somebody earning, say, £1000-1400/month. Nobody will live in a tent just to put all their money into a pension.....

Wednesday2000

I didn't see the programme, but I did read that article. I think it's a good idea to talk about these issues if it gets young people thinking and planning for retirement. The earlier you start putting money away the better. When I was in my twenties retirement seemed so far off that I didn't give it a second thought!

andygb

PasturesNew wrote: »

£800/month certainly isn't the right advice for somebody earning, say, £1000-1400/month. Nobody will live in a tent just to put all their money into a pension.....

Exactly this.
Back in the early nineties when I was working in London, taking home around £1200 a month and paying out about £250 in travel, and £450 mortgage, there was no way that I would listen to the "advice" from the "experts" who ran our company pension scheme. They wanted me to pay in around £500 per month???????