Mortgage Free But No Pension

MX5huggy

I think some people are quick to jump on the deprivation of assets line. It’s not unreasonable or unexpected for a grand parent to give gifts to their grand children. Then it’s about value. There’s a difference between someone with just state pension and the capital from selling their house giving £9k each to 4 grand children each tax year to reduce their capital, and a monthly gift of £50 to the grandchildren which is now paid to an ISA instead of cash because granny loses track and she doesn’t go to the post office anymore. My own mum gives what many would call excessive gifts to me and my children, but she is basically rich yet lives a simple life she is very unlikely to ever need Local Authority funding and likes to see us all benefiting from her good fortune while she is alive rather than after she has left this life. 

stef_saving

MX5huggy said:

I think some people are quick to jump on the deprivation of assets line. It’s not unreasonable or unexpected for a grand parent to give gifts to their grand children. Then it’s about value. There’s a difference between someone with just state pension and the capital from selling their house giving £9k each to 4 grand children each tax year to reduce their capital, and a monthly gift of £50 to the grandchildren which is now paid to an ISA instead of cash because granny loses track and she doesn’t go to the post office anymore. My own mum gives what many would call excessive gifts to me and my children, but she is basically rich yet lives a simple life she is very unlikely to ever need Local Authority funding and likes to see us all benefiting from her good fortune while she is alive rather than after she has left this life. 

Thank you, this is reassuring. 

Albermarle

Put it this way, I'm a similar age to the OP and I'm not banking on there being any state pension at all when I retire.

The likelihood of the state pension being withdrawn is approx zero .

It would be political suicide of the highest order for an government to even mention it , never mind actually do it.

Even hinting at reducing the generous triple lock increases brings howls of protest from older people , who are the ones who vote the most .

resk

Albermarle said:

Put it this way, I'm a similar age to the OP and I'm not banking on there being any state pension at all when I retire.

The likelihood of the state pension being withdrawn is approx zero .

It would be political suicide of the highest order for an government to even mention it , never mind actually do it.

Even hinting at reducing the generous triple lock increases brings howls of protest from older people , who are the ones who vote the most .

Whenever I see or hear 20/30/40-somethings saying, or being told, that they won't get a state pension when they are older, I always wonder how many years, or decades, people have been saying the same thing.  

I'm not ready to completely file that theory in the bin, next to "the stock market is gambling!" and various other nonsensical personal finance statements, but pretty close.  

TheAble

resk said:

Albermarle said:

Put it this way, I'm a similar age to the OP and I'm not banking on there being any state pension at all when I retire.

The likelihood of the state pension being withdrawn is approx zero .

It would be political suicide of the highest order for an government to even mention it , never mind actually do it.

Even hinting at reducing the generous triple lock increases brings howls of protest from older people , who are the ones who vote the most .

Whenever I see or hear 20/30/40-somethings saying, or being told, that they won't get a state pension when they are older, I always wonder how many years, or decades, people have been saying the same thing.  

I'm not ready to completely file that theory in the bin, next to "the stock market is gambling!" and various other nonsensical personal finance statements, but pretty close.  

I agree it's highly unlikely, but at the same time I'd say that it's good philosophy not to be dependent on government policy for your financial well being. So making separate provision, with the state pension as a nice top-up, is the way to go.

Eco_Miser

TheAble said:

resk said:

Albermarle said:

Put it this way, I'm a similar age to the OP and I'm not banking on there being any state pension at all when I retire.

The likelihood of the state pension being withdrawn is approx zero .

It would be political suicide of the highest order for an government to even mention it , never mind actually do it.

Even hinting at reducing the generous triple lock increases brings howls of protest from older people , who are the ones who vote the most .

Whenever I see or hear 20/30/40-somethings saying, or being told, that they won't get a state pension when they are older, I always wonder how many years, or decades, people have been saying the same thing.  

I'm not ready to completely file that theory in the bin, next to "the stock market is gambling!" and various other nonsensical personal finance statements, but pretty close.  

I agree it's highly unlikely, but at the same time I'd say that it's good philosophy not to be dependent on government policy for your financial well being. So making separate provision, with the state pension as a nice top-up, is the way to go.

But you are anyway, 95% income tax anyone?

kidmugsy

Eco_Miser said:

TheAble said:

resk said:

Albermarle said: 95% income tax anyone? 

Wiki: "In 1971, the top rate of income tax on earned income was cut to 75%. A surcharge of 15% on investment income kept the overall top rate on that income at 90%. In 1974 the top tax rate on earned income was again raised, to 83%. With the investment income surcharge this raised the overall top rate on investment income to 98%, the highest permanent rate since the war."

TheAble

kidmugsy said:

Eco_Miser said:

TheAble said:

resk said:

Albermarle said: 95% income tax anyone? 

Wiki: "In 1971, the top rate of income tax on earned income was cut to 75%. A surcharge of 15% on investment income kept the overall top rate on that income at 90%. In 1974 the top tax rate on earned income was again raised, to 83%. With the investment income surcharge this raised the overall top rate on investment income to 98%, the highest permanent rate since the war."

Not quite sure why this is relevant. You can't do much about the prevailing top rate of income tax but you can take steps to ensure you don't need to be reliant on the state pension.

Albermarle

TheAble said:

resk said:

Albermarle said:

Put it this way, I'm a similar age to the OP and I'm not banking on there being any state pension at all when I retire.

The likelihood of the state pension being withdrawn is approx zero .

It would be political suicide of the highest order for an government to even mention it , never mind actually do it.

Even hinting at reducing the generous triple lock increases brings howls of protest from older people , who are the ones who vote the most .

Whenever I see or hear 20/30/40-somethings saying, or being told, that they won't get a state pension when they are older, I always wonder how many years, or decades, people have been saying the same thing.  

I'm not ready to completely file that theory in the bin, next to "the stock market is gambling!" and various other nonsensical personal finance statements, but pretty close.  

I agree it's highly unlikely, but at the same time I'd say that it's good philosophy not to be dependent on government policy for your financial well being. So making separate provision, with the state pension as a nice top-up, is the way to go.

In financial planning terms , you should take into account the near certainty of receiving the guaranteed income from the state pension , when you decide how to arrange your other financial assets , what risk level to take etc.
For example if you are a couple , two state pensions are worth around three quarters of a  million pounds ( that is how much it would cost to buy them as an annuity) so for the large majority ( even those reasonably well off) they are a major part of any retirement income. Not just a nice top up , although that maybe the case for a small minority.

Eco_Miser

TheAble said:

kidmugsy said:

Eco_Miser said:

TheAble said:

resk said:

Albermarle said: 95% income tax anyone? 

Wiki: "In 1971, the top rate of income tax on earned income was cut to 75%. A surcharge of 15% on investment income kept the overall top rate on that income at 90%. In 1974 the top tax rate on earned income was again raised, to 83%. With the investment income surcharge this raised the overall top rate on investment income to 98%, the highest permanent rate since the war."

Not quite sure why this is relevant. You can't do much about the prevailing top rate of income tax but you can take steps to ensure you don't need to be reliant on the state pension.

What steps would they be, when the government can take 98% of your investment income?

It's a demonstration that you are dependent on government policy for your financial well being, whatever you try to do.