Life Expectancy and Pensions

Chickereeeee

Prism wrote: »

Ok here is an example based on the US stock market (the only one I have 40 years of stats for)

Lets say 40 years ago you decided to put away £80 a month into a pension and invested it in equities. The government tops this up to £100. You increased the amount slightly each year by inflation. The value of that today would be worth around 1.5 million pounds. Had you done the same without a pension then it would be worth around 300k less.

You can do a lot with that amount of money while retired. Even if someone chose options with a lower return then its still a huge opportunity for a happy retirement.

And get taxed at 20-40% on three-quarters of that to get it back out of the pension....

C

IanSt

singhini wrote: »

I was watching "daily Politcs" today on BBC2 ...

That made me think, whats the point of sticking money into my pension...

I feel there are too many restrictions on pensions ...

Why are we allowing our governments to indenture us into pension slavery and torture with our own private pensions...

What do others think?

I think that if you do a bit more research using up-to-date articles then you might be happily surprised on how good the current pension schemes can be.

Yes there are some limits, e.g. how soon you can access them, but they are there so that people don't abuse the system.

Malthusian

Chickereeeee wrote: »

And get taxed at 20-40% on three-quarters of that to get it back out of the pension....

After getting 20-40% tax relief on the whole lot when you put it in? Poor you.

Someone who got 20% tax relief (which Prism's example specified) should not be paying more than 20% tax on their pension. Quite possibly less with good planning.

Conversely, people who get 40% tax relief frequently don't pay 40% tax on pension income, unless they have a £35k+ DB pension, which also falls squarely into the category of "nice problem to have".

Prism

Chickereeeee wrote: »

And get taxed at 20-40% on three-quarters of that to get it back out of the pension....

C

Well, yeah if after a lifetime of saving you blast it all in a couple of years you would pay a lot of tax. However I would assume most people would use that for a nice yearly income that doesn't touch 40% tax. Today, you could pay yourself a nice 50k per year (plus the state pension) if you so desired and and only pay 20% tax on arund 35K of it.

ams25

This thread really shows how so many folk don't understand the value of pensions (as a wrapper). I'm helping some friends and family at the moment to assist them, who I guess are representative of the normal majority (versus us weird folk folk who are interested in this stuff) and it is really quite worrying that so many have so little knowledge or interest in personal finance and make poor decisions as a consequence. Given the positive impact it could have on people lives it is a great shame that more is not done to change it. How do we change that I wonder....

atush

Dorian1958 wrote: »

Eh? First I have heard of this. As a Northener should I be worried??

You should be worried if you stick to the 'old' northern lifestyle. Which means northerners smoke more, drink more, eat less fresh veg/fruit etc.

If you dont do these things, and you enjoy a healthy lifestyle then you shouldnt worry.

Terron

Dorian1958 wrote: »

Eh? First I have heard of this. As a Northener should I be worried??

I am also a Northerner, though my mother was Welsh. However both my parent made it into their eighties as did three of my grandparents so my genes don't seem to be a problem.