What do you expect to be there come your retirement?

JustAnotherSaver

Vague title so i'm actually referring to something on the lines of state pension. Also what timeframe are you looking at really because a 64 year old retiring tomorrow would be very different from an 18 year old retiring in 50-60 years.


Disclaimer: None of us have crystal balls (i think) but i'm curious as to what others think about the future.


I'm mid 30s right now so i'm looking at about a 30-35 year timeframe so somewhere around 2049-2055.


****

Some of you should know enough about me by now to know i don't pretend to know a vast amount (or indeed any amount) about these topics. Far from it. But anyway...

By the time i get there, assuming i do, i wouldn't at all be surprised if the retirement age was 75 as a minimum.

I think this whole workplace pension scheme is a setup to eventually scrap the state pension. How that'd go with those who can't work & haven't worked i don't know but then if they don't scrap it i'd bet they'd severely reduce it so that it's a fraction above worthless.


Everything geared towards putting your own money in. No handouts.





And that's basically the basis i'm working on as i plan my retirement. I'm accounting for my SIPP - whatever i contribute to that and i'm accounting for my workplace pension. I don't expect anything beyond that. If there is anything then lucky me, it'll be treated like a bonus, but i'm not relying on it & the only way to truly not rely on it is to carry on as though it doesn't or wont exist.




I remember leaving school. Older people would say "there'll be nothing for you when you get to my age". It was just a throwaway comment to me at the time because it was about pensions and pensions are boring & for old people, i can worry about that tomorrow.
But then as time goes on and you realise pensions are for smart people not old people and as changes take place you (I) begin to think ... maybe they were right, literally.

bostonerimus

I'm 57 and retired. I get health insurance and a pension from the state of Massachusetts and I expect that to be there until I die because we have a powerful state employees union and state politicians that understand the contractual obligations and do things to meet them.

UK state pension I expect to get as I have a full NI record.
US social security I expect to get as I have 23 years of payments into that.

If any of those fall through I will resort to using my investments in funds and property.

Paul_Herring

47.

I've planned, since late 20's, on the basis that I won't have (much of a/any) state pension, and if I got any then it'd be a bonus.

But I currently expect my SPA to remain where it is - 67 - but would not be surprised to see it move up to 68.

I'm not convinced that they'll introduce a means test on it by that point either.

I'm still treating the SP as a bonus, and not relying on it.

Related, but not directly relevant:

I also currently expect to be able to access my personal pension at 55, but I'm only a year off the mooted change in 2028 to move personal pension access to SPA-10 years (it'll increase to 57/58 when I'm 56) but presuming that if I do access it at 55, then I'll get continued access (conversely if I delay accessing it, then it'll be 57/58 before I can.)

On the above basis, I'm on track to be able to retire before 55 if I wish.

hugheskevi

Aged 41 now, my expectations over the next 25 years are:

• Minimum private pension age to remain at age 55, despite previous HM Treasury announcements of an increase
• My State Pension age to increase from 67.7 to at least 68, and I wouldn't be surprised for it to be 70
• State Pension indexation to be reduced to CPI (possibly better of CPI and earnings, depending on strength of pushback) - less likely if State Pension age has increased to 70.
• No expansion of means-testing, although Housing Benefit and Council Tax Benefit may continue to expand depending on population demographics.
• Pensioner perks such as Winter Fuel Payments, free prescriptions, etc, to continue but be frozen in cash terms.
• Automatic enrolment minimum contributions to be expanded to be based on all earnings (up to a cap, probably same cap as now) and increased to 10% (6% employee, 4% employer)
• Another review of how to bring self-employed within scope of automatic enrolment, that leads to nothing.
• Public service pensions to go through another round of reform within the next decade - probably to reduce benefit generosity rather than increase contribution rates
• Private sector Defined Benefit pensions to continue to wither on the vine toward a slow death, Collective Defined Contribution to gain no take-up outside Royal Mail.
• Pension freedoms to continue unchanged, but with the development of more standardised default drawdown portfolios.
• Another review of care provision, but hard to know whether it will come to anything significant
• Significant review of pension tax, resulting in a new round of simplification that significantly change the Annual and Lifetime Allowances and ensure low earners under Net Pay Arrangements get basic rate tax relief. It may possibly introduce a cap on tax-free Pension Commencement Lump Sums (future accrual only) and change rules around salary sacrifice and National Insurance.

GunJack

One thing I'd like to see happen, but not convinced it will, is that all pension contributions from employment to be compulsory by salary sacrifice. Levels and simplifies the playing field.

Other things to happen could include the simplification of the whole of pensions regulations, let's face it it's a complicated mess at the moment.
SPA to rise again, but to 70 max...

JustAnotherSaver

hugheskevi wrote: »

[*]Automatic enrolment minimum contributions to be expanded to be based on all earnings (up to a cap, probably same cap as now) and increased to 10% (6% employee, 4% employer)

[/LIST]

Interesting point. I hadn’t thought of that until now but I agree. I can see it rising. To what I don’t know and when who knows. 10-20yrs from now maybe. Either way I can see it rising.

JoeCrystal

JustAnotherSaver wrote: »

Interesting point. I hadn’t thought of that until now but I agree. I can see it rising. To what I don’t know and when who knows. 10-20yrs from now maybe. Either way I can see it rising.

Not only that but making it compulsory as well!

Anonymous101

hugheskevi wrote: »

Aged 41 now, my expectations over the next 25 years are:

• Minimum private pension age to remain at age 55, despite previous HM Treasury announcements of an increase
• My State Pension age to increase from 67.7 to at least 68, and I wouldn't be surprised for it to be 70
• State Pension indexation to be reduced to CPI (possibly better of CPI and earnings, depending on strength of pushback) - less likely if State Pension age has increased to 70.
• No expansion of means-testing, although Housing Benefit and Council Tax Benefit may continue to expand depending on population demographics.
• Pensioner perks such as Winter Fuel Payments, free prescriptions, etc, to continue but be frozen in cash terms.
• Automatic enrolment minimum contributions to be expanded to be based on all earnings (up to a cap, probably same cap as now) and increased to 10% (6% employee, 4% employer)
• Another review of how to bring self-employed within scope of automatic enrolment, that leads to nothing.
• Public service pensions to go through another round of reform within the next decade - probably to reduce benefit generosity rather than increase contribution rates
• Private sector Defined Benefit pensions to continue to wither on the vine toward a slow death, Collective Defined Contribution to gain no take-up outside Royal Mail.
• Pension freedoms to continue unchanged, but with the development of more standardised default drawdown portfolios.
• Another review of care provision, but hard to know whether it will come to anything significant
• Significant review of pension tax, resulting in a new round of simplification that significantly change the Annual and Lifetime Allowances and ensure low earners under Net Pay Arrangements get basic rate tax relief. It may possibly introduce a cap on tax-free Pension Commencement Lump Sums (future accrual only) and change rules around salary sacrifice and National Insurance.

Very good points. My first thoughts on reading the OP was along similar lines to yourself although I have some differing opinions.


I'm 38 and hoping to be F.I. if not retired before 50. So have based my retirement planning on a couple of Key assumptions.

• F.I. Number is based upon not relying on State pension. 30 years away and although I think it'll still be available to me I've taken the very cautious stance here.
• Access to SIPP based on 58. I understand the government has committed to raising this to 10 years prior to the State pension age I've assumed that it will not raise any further than 58 within the next 20 years. Although thinking about it now 60 may be a more appropriate assumption.

I think you're pretty much on the money with your other comments. I certainly think that auto-enrolment percentages will increase, public sector pension provisions will become more in line with private and LTA and pension taxation will be reviewed.


I also think there will be a review of the tax arrangements on Pension contributions. IMO 40% tax payers should make as much hay as they can whilst the system remains as it is.

Paul_Herring

GunJack wrote: »

One thing I'd like to see happen, but not convinced it will, is that all pension contributions from employment to be compulsory by salary sacrifice. Levels and simplifies the playing field.

Sadly that will not level, nor simplify, since it hits the same problem as some of the current methods of contributions (SS among them) - those on low levels of pay not currently paying NI or income tax will not see any uplift to their contributions from the government, since nothing will be being deducted.

JoeCrystal wrote: »

Not only that but making it compulsory as well!

Whereupon unhealthy comparisons to "yet another payroll tax" and "national insurance by another name? Really?" will be made (while ignoring the fact that - at least currently - the contributions would be ringfenced to the person they're being contributed by.)

I don't see that particular move being made any time soon.

Dazed_and_confused

and ensure low earners under Net Pay Arrangements get basic rate tax relief

Agree with this however one complication to overcome is that some of these low earners do actually end up receiving basic rate tax relief by virtue of the taxable income from their Net Pay employment being less.

Don't think this is an easy one to resolve without running the risk they end up receiving two lots of tax relief.

cfw1994

Despite having benefited from this for a good few years, I would expect the 40% high rate tax benefit to schemes to be removed - perhaps just a flat rate, maybe 20-30%.

Although remember that laws are written by those in power, & those in power tend to be the wealthier individuals, so maybe that 'top end perk' will remain for some time (heck, even Corbyn is a millionaire....although should he & his mad Marxist friend McDonnell somehow get in, who knows......)