Funding Gap Between Retirement & SP

bluenose1

Drawdown on DC pot from 55+ to 60
60-67 live off DB pension
67+ DB Pension and State Pension.

The UK has the lowest SP of all developed countries so can't see that any Government would be able to reduce it further.

badmemory

bluenose1 wrote: »

The UK has the lowest SP of all developed countries so can't see that any Government would be able to reduce it further.

The only reason we have the triple lock is because of this. How long do you think this will last when we are no longer being compared to the other 27? I give it 6 months after Brexit max. I certainly don't think the April 2020 increase will follow the triple lock, although by then CPI will be a lot more than 2.5%.

Terron

badmemory wrote: »

The only reason we have the triple lock is because of this. How long do you think this will last when we are no longer being compared to the other 27? I give it 6 months after Brexit max. I certainly don't think the April 2020 increase will follow the triple lock, although by then CPI will be a lot more than 2.5%.

You are forgettting the first priority of almost any government - getting reelected. The conservatives dare not drop it since they need pensioner votes. They will almost certainly go into the next election promising to maintain a reiple lock.

Terron

badmemory wrote: »

The only reason we have the triple lock is because of this. How long do you think this will last when we are no longer being compared to the other 27? I give it 6 months after Brexit max. I certainly don't think the April 2020 increase will follow the triple lock, although by then CPI will be a lot more than 2.5%.

You are forgettting the first priority of almost any government - getting relected. The conservatives dare not drop it since they need pensioner votes. They will almost certainly go into the next election promising to maintain a triple lock.

OldMusicGuy

I retired at 60 and get SP at 66. The gap is being funded by UFPLS up to personal allowance from my DC pot, savings and my wife's small DB pensions.

Snakey

I've always been told that by the time I get there there won't be a State pension and that I should exclude it from my planning and see it as a bonus. I have no final salary pension. So my gap is between stopping work and being able to access my private pension.

I feel uncertain about the start date of the gap. Everybody says the biggest deal about retirement planning is the date you start saving. I think it's the date you stop. I know when I want it to be, but what price all my efforts if we crash out of the EU, it decimates my line of work, and I find myself permanently out of a job?

The end of the gap could be between 55 and 57 depending on how they introduce the change. (Obviously by the time I arrive at the day I could give up work, the details will be known - it's not like I'll literally have to jump blind. I'm only whinging here about the frustration of trying to plan for my future today, when I don't yet know.)

So for now my "planning" consists of: add up all non-pension savings. Divide by number of months from today (worst case 140, best case 116). Compare those numbers against essential outgoings. Keep stuffing money in. Watch for updates and news of potential changes, but without changing strategy on the strength of the latest "maybe". That's literally all I'm doing for now.

atush

westv wrote: »

Just curious to know what people might choose for their gap fund:-

Remain fully invested as prior to retirement
Fixed term annuity for the gap
Escalating fixed term annuity for the gap
Other option

2 years worth of cash plus an emergency fund, then fully invested with the rest. An emphasis on income, but willing to reinvest income during major downturns while living off cash.

Wont be looking at annuities, at least until rates recover.

AndyAdams

I am surprised in the number of posters thinking there won't be a state pension in the future, personally I think there will be one, I see the way to decrease costs is to keep moving the age out, maybe up to age 75 eventually? This way the govt have effectively means tested the pension up to that age as I imagine a lot of people will not be employable in their late 60s early 70s for a variety of health reasons, therefore they would have to either support themselves via personal savings/pensions or the govt will support them on benefits.

kev2009

I too think a state pension will be around when I reach retirement age as if it isn't then surely the government would need to pay us the money back we have been paying into it at least which is likely to cost them more than keeping the money and paying us the SP each year?

Kev

Paul_Herring

kev2009 wrote: »

s if it isn't then surely the government would need to pay us the money back

The only precedent for that is the refund of NI in lieu of S2P/SSP when it was possible to contract out.

Basically any 'payments' into 'your state pension' via NI will likely to be construed to be payments for the NHS and the like, and the emphasis on NI payments being merely 'possible entitlement to, but not payment towards' your state pension being made stronger.

While "state pension" as 'a thing' will be something I expect to continue, I expect it to be constricted to the point where anyone who has put any provision into a private pension to be denied it - either via the age going up or via means testing. It'll be another safety net, not a guaranteed payment back to those who've worked (or not) for the whole of their productive (or not) lives.

Hence my own comment earlier:

In common with at least one post above, SP will be a 'nice to have' rather than 'something I'm depending on' - and have had that attitude for quite some years...

I don't expect the SP to disappear entirely - but I expect my own ability to draw on it myself will be limited to - possibly - the extreme extent of it being £0. Or even paying extra tax in my dotage (if, for example, they harmonize NI and IT such that even those past state retirement age, let alone 60, pay it on their income.)