Too late to start planning for retirement?

Triumph13

As regards the specifics of what your parents can do, the only things they have the power to change are what they spend now (and hence what they save) and how long they work for. They need to sit down, go through the numbers and take some hard decisions to save some of their current earnings to try to equalise what they spend now with what they will be able to spend in retirement.

The wider societal issue is that we are moving from a paternalistic system where DB pensions would automatically look after you without any thought on your behalf, to an age of individual responsibility where the choices you make have an enormous impact on your standard of living in retirement. For those who waited for the second marshmallow this can be a good thing as it gives us more flexibility and control. For those who always take the first marshmallow it's a recipe for poverty in old age. What can be done about it? How about we make opting out of pension schemes a bit like deferring jury service - you can only do it once or twice and then you have no option but to join.
A harder challenge is to create appropriate products to invest in for those without the knowledge and/or skills to make an informed choice. This is always going to be a nightmare with shysters promising unrealistic returns on one hand and lawyers circling like sharks for anything they can possibly construe as mis-selling. One possibility might be a variant on the idea of a sovereign wealth fund acting as a default option.

MallyGirl

enthusiasticsaver wrote: »

Personally I think if you have less than 5-10 years until retirement you have left it too late but the old saying better late than never still holds true.

It is not too late - it just costs a lot more. I had always paid the minimum to get employer maximum but no more. Luckily for me i had some reasonably generous employers. Just before I turned 50 the lightbulb came on.
I am fortunate that I now earn enough that I can Sal Sac the full £40k to catch up a bit and aim for retirement at 60.

JoeCrystal

researchstudent wrote: »

My two questions are 'when it is too late to start planning for retirement'? And a follow-on - 'what can banks and other providers do to help those later in life to take positive action'?

Ideally, one should start planning for retirement as soon as you started working and periodically review the plan. It is never too late; the problem is preparing for retirement in the later decades is that it give you less time to reach the ideal goal.

Regarding the providers and banks, I am not sure they can do anything to help. There is however a proposed Dashboard system. The Dashboard should make it easier to show how much you have already saved for your retirement. Once it is set up, there should be a way to remind the people to check it like a letter every five years or something.

lisyloo

There is a min income in this country of approx £160 per week (if you don’t get full state pension it will be topped up with benefits e,g, pension credit).

If we ignore the morals and stick to the Maths then then isn’t the point it’s too late when you no longer have the time to provide more than £160 as that’s what you’ll get from the state anyway?

Of course this ignores the morality aspect of providing for yourself as opposed to relying on the state.

Many on here are middle class people with careers but there are women out there who’ve got divorced and swapped the pension for the home and looked after children, parents with low paid work who might fall into this category.