Martin Lewis Money Show - Pensions (ITV, 18/02/2021)

fly-catchers

When I got my Added Years that was called an AVC. And I also had two other money invested AVC's available, one of which I also went for. So not necessary one or the other. Only if you can achieve the full number of years allowed by the pension in your working life can you not buy added years.    

westv

LHW99 said:

I didn't watch the programme, but was it actually made in 2020 / 21? They seem to be showing many more increasingly old repeats at the moment (watched a documentary yesterday and found out it was originally made in 2009)

Even some "new" programmes are often just full of repeats of previous episodes - Countryfile for example.

Croeso69

LHW99 said:

I didn't watch the programme, but was it actually made in 2020 / 21? They seem to be showing many more increasingly old repeats at the moment (watched a documentary yesterday and found out it was originally made in 2009)

It was broadcasted live, the clues were there ...

Ho_Malone

I noticed Martin said the state pension was around £135 per week -  but isn't that the (older) basic state pension? I thought the new state pension for people retiring now was approx £170 per week. Can someone enlighten me please? A bit panicky here as I'm just a couple of years off receiving state pension.     Thank you in advance for any replies. 

Dazed_and_C0nfused

You are correct about the basic and new amounts.  The new State Pension is £175.20 (going up to £179.60 in April).

But at the moment everyone approaching State Pension age is under transitional rules so you should check your forecast on gov.uk.  It is important you read past the headline figure and look at the whole forecast.  This should show what you have accrued to 5 April 2020.

Ho_Malone

Dazed_and_C0nfused said:

You are correct about the basic and new amounts.  The new State Pension is £175.20 (going up to £179.60 in April).

But at the moment everyone approaching State Pension age is under transitional rules so you should check your forecast on gov.uk.  It is important you read past the headline figure and look at the whole forecast.  This should show what you have accrued to 5 April 2020.

Thank you, will do that. 

epm-84

I've never got his suggestion about the amount you put into a pension relating to your age to get 2/3 of your 'normal salary' when you retire.

2/3 of what exactly?  No-one's salary is going to stay at a constant level, increasing with inflation each year.  It might be aged 60 you earn triple what you earned aged 25, even before inflation.  It might be if you work in the constructive industry you decide to move to less manual work when you're in your 50s and earn less aged 60 than you earned aged 30.  If it's 2/3 of the average over your working live then it might take into account a time when you had dependent children and a mortgage so needed a lot more than you will need in retirement.

Albermarle

epm-84 said:

I've never got his suggestion about the amount you put into a pension relating to your age to get 2/3 of your 'normal salary' when you retire.

2/3 of what exactly?  No-one's salary is going to stay at a constant level, increasing with inflation each year.  It might be aged 60 you earn triple what you earned aged 25, even before inflation.  It might be if you work in the constructive industry you decide to move to less manual work when you're in your 50s and earn less aged 60 than you earned aged 30.  If it's 2/3 of the average over your working live then it might take into account a time when you had dependent children and a mortgage so needed a lot more than you will need in retirement.

All those points are valid, the two thirds rule is a very loose rule of thumb.
It applies really to middle earners who are likely to spend a bit less in retirement than when working ( no commuting costs, not buying lunch every day , no pension contributions/savings etc ) In this case a net income two thirds of your working net income should give you a reasonable retirement. Of course many low earners will need 100% , whilst high earners could probably manage with half . 

jem16

epm-84 said:

I've never got his suggestion about the amount you put into a pension relating to your age to get 2/3 of your 'normal salary' when you retire.

2/3 of what exactly?  

He’s referring to Defined Benefit final salary pension schemes where the 2/3rds is based on your final salary on leaving or retiring. It wasn’t 2/3rds for all schemes either as many were 1/80ths scheme so it was half your final salary. Each scheme had its own way of defining final salary and could have been the best average of last 5 or 10 years. 

Final salary pensions are very rare now and almost impossible for new joiners to get. Apart from Public Sector with their CARE schemes most are now Defined Contribution with a pot of money. 

epm-84

jem16 said:

I watched his programme last night even though I never watch it at all. Of course all the Waspi/BT60 mob have been harassing Martin all week even though it was never likely to be about the state pension. That argument is currently raging on his FB page after someone dared to criticise Martin. What I find more interesting there is the amount of people not backing them and calling out their myths.

It's a controversial issue.  On one hand a woman should not be entitled to more state pension than a man (if they both born on the same date, die on the same date and have both paid the same level of NI contributions.)  On the other hand the government didn't give them all that much notice of the change.