Sacrificing today for a bit more tomorrow ......

Kynthia

Like most things in life I believe in moderation. Don't forgo holidays now, but when doing your budget actually put pensions into the plan rather than think of it as an extra after everything else. Like many people I'm only just beginning to think of pensions seriously now that I'm approaching half-way through my working life (assuming a retirement at 60 rather than my new state pension age of late-60s).


It's the same with any form of saving. Have a balance so you enjoy life now but have put away enough to enjoy life in the future. It's the same with my free time, only so much cleaning, diy, paperwork, etc before seeing friends/family and going on days out. I have family that have lived to 80 but a grandparent and three aunts/uncles that haven't made it to 60. So if I get to retirement I want to have a good standard of living, but I want nice times now as I can't assume I'll get a retirement.

Super_Whiskey

As someone in and around the age range mentioned, this is a situation that's been on my mind for a little while now.

At the moment, I am on a salary which isn't exorbitant but due to living somewhat frugally, allows me to do what I want to do while at the same time saving some money which I hope to put towards a house around the time I'm 30. When I first joined my current employer, they set my contribution to their pension at 10% which considering I was on about £1100/month net represented quite a big chunk of my money once day-to-day expenses had been taken out.

With all things being well, I hope to have the 35 years N.I. contributions needed to get a FSP but I'm aware that if I'm renting or still paying a mortgage that won't be anywhere near enough to live on. Or at least live the lifestyle I am accustomed to.

My thinking is that if I put less in to a private pension now, it will allow me to get on the property ladder sooner which, after a couple of promotions between now and retirement, will mean I will be mortgage free sooner. With the promotions, I will then be able to contribute more in to a private pension and then plan for retirement when I have more expendable income.

Based on all this, I do worry what things will be like for people who just live pay day to pay day or simply don't earn enough money to do all this as they will be more and more reliant on the state when they retire.

uk1

Super Whiskey,

Congrats on thinking this through in the way you have.

It seems to me from the little you have said, that what you may contrive is a situation although you are by no means a wealthy saver, where you plan to acquire that lovely increasing asset that you can live in whilst hopefully it increases in value to the point where you are perhaps mortgage free when you retire perhaps even by downsizing. People often forget that in decent property markets it is often possible to double your stake ie deposit each year. This leaves you in the great situation of being mortgage free with whatever you have in SP and other pensions when you retire.

Your comment about living frugally is an interesting one because it is all about self disciplain. The mistake that many (including myself at some points in my career) always make is that expenditure always expands to fit an increasing income if you allow it. You never feel like your doing better, you just spend and often waste more. When I was employed I eventually tried to put much of any salary increase straight into increased pensions so I never actually tasted it and got use to it. Sounds like something you'd do.


Jeff

ibizafan_2

It's an interesting one. My mother (84) said yesterday that I (63), spend money "like water", whereas I think that I am quite restrained by most standards. We do have a lot of holidays, but can afford to. My parents are of the generation who were very careful with money, and that coupled with my father being very clever with investments, has led to them amassing over a million pounds, but little inclination to spend it. Even money which could be spent on updating their house is a waste in their eyes. However, they are content with their life, as I am with mine, but it does make me chuckle. I'm sure my sons spend more on stuff than I did, but I don't worry because they seem pretty sensible. Perhaps they've got it right. After all, we're not here for long, and at my age that's becoming ever more apparent.

robin61

Luckily I was enrolled in my work pension scheme when I was 18. I guess this means that because my mortgage was paid off a few years ago I would have enjoyed a decent retirement at 60. However since the mortgage was out of the way my focus has been on making the most of the tax relief advantages so that I can retire maybe 4 years earlier and not compromise my retirement income. Of course it means I have less income now but if I gain 4 work free years well worth it. Hopefully only a year or so to go now.

kidmugsy

stormbreaker wrote: »

A dear friend deferred his state pension, retired at 70 and died last week 71.

His widow may be glad he deferred though.

kidmugsy

jerrysimon wrote: »

Of course for me making provision for my wife is also very important.

It might be worth checking whether your pension shame offers "allocation" whereby you give up some pension so that your widow gets a bigger widow's pension eventually.

kidmugsy

RickyB2000 wrote: »

I will kick myself if I forgo the fancy cars and house now to save and then be no better off than those who bought the fancy cars and house and didn't save!

Fancy cars are a snare and a delusion: as the saying goes, borrowing money you don't have, to buy things you can't afford, to impress people you don't like.

kidmugsy

On holidays: our experience that one week in the sun in January is a wonderful tonic. For other holidays, three weeks is far more relaxing than two.

uk1

kidmugsy wrote: »

Fancy cars are a snare and a delusion: as the saying goes, borrowing money you don't have, to buy things you can't afford, to impress people you don't like.

The only thing I indulged myself in for starting our own business and making it work was I bought a very expensive new car. Once, just once. I was never a petrol head but it was just this one car I kept salivating over. And they were of course full price because of the rarity at the time. She said "For g@d sake ... buy it!" I then spent a long time regretting spending so much just on four wheels. It was enough to buy a small house.

My wife got so fed up with me complaining she said to me "look on the bright side. It has depreciated so much that you've lost most of what you were going to lose, so just enjoy it without feeling guilty." I now enjoy it.

Jeff