Pensions envy. Are we heading for financially comfortable but socially uncomfortable retirements?

jimi_man

Flugelhorn said:

NedS said:

Silvertabby said:

Part of my job as a LGPS administrator involved trying to pursuade members not to opt out of the scheme.  Most would listen to me reeling out the list of benefits they would be giving up, but then say that they still wanted to opt out because they 'needed' the money for X,Y or Z.

Many of these were people in their 20s or 30s, in well paid full time jobs.  I wonder if they will get to retirement age, consider the error of their ways and then try to complain that I wasn't 'pursuasive enough'!

@Silvertabby I remember my younger 20-something self having exactly the same conversation with the 'pensions person' in my first real job at a University (USS scheme), and them telling me this is the best pension you'll ever have when I asked them if it was any good. Luckily for me, I listened and didn't opt out. My older self now thanks them and considers myself lucky to have a reasonable amount of guaranteed DB income from that and other final salary/career average schemes. So thank you to you and your kind for helping me make the right choice.

Remember exactly the same in first days as a junior doctor "tick here and when you get to 60 you 'll be really glad you did"  at that stage having worked the last 30 hours I wasn't sure that I would survive until the end of the week but hey I ticked the box,  things did get a bit better in the working day and at 60+ I am now grateful that they stood over is while we did all that.

Wish the scheme had been a bit less complicated though - maybe those in the 2015 will at least have some insight as they go along as to what they might get at the end 

Agreed. As a 21 year old police recruit I recall one of the instructors coming round with pension forms which I think we had to sign (pointless really as back then it was mandatory to join, you couldn't opt out). Exactly 30 years later when I popped out the other end and the pension started paying back, boy was I thankful!

cfw1994

ComicGeek said:

cfw1994 said:

Time.  That is the beauty of it all, eh!

And that's why I try and balance enjoying life now, while I'm still working, and saving for retirement. I worked hard at school and in my early career to get the best possible start, picked a career that I really enjoy - life doesn't only start when you retire, you have to make the most of all the time you get.

My brother in law passed away last year at 41, and that really hit home. No point only saving and not enjoying life when you don't make it to retirement, or don't have the health to enjoy it.

My wife has chronic pain and long term health issues, so we have always looked to balance living now and saving for the future.  

Best wishes for your wife: long term health issues are not nice 😔

Your point about your BiL passing hitting home is very true.  
I attended 4 funerals of good friends over a 12 month period a few years back.  2 my age.  I’ve always been reasonably interested in my future non-working life….but that period put it into laser focus 😳

Have a friend who was laid off recently: we talk a reasonable amount about pensions and money: we agree he doesn’t have to look for more work (& he doesn’t particularly want to).  His partner is aghast: thinks he is too young to retire 🧐   I need to speak with her: or maybe get @Sea_Shell to have a word 🤣

skycatcher

I remember my boss in BT when i joined as a graduate in 1981 age 22 telling me to join the pension scheme and also telling me to buy added years as i wouldn't be able to get a full pension by 60. I did both and so glad i did. I actually only did 22 years with them but I'm now drawing a very healthy DB cpi linked pension.

uss_tish

I am ever thankful that my best friend at work in my 20s was the HR consultant and she literally took me into the finance office and suggested I enrolled in the USS scheme - best advice I ever had.

Agree too on a very personal level with the sentiments of saving hard when/if you can and, grasping life with both hands. I am recently widowed and newly retired (at 55) and am truly thankful that mine and my husbands financial retirement planning meant I could retire early to focus on supporting our sons through uni and final year in school. 

It’s not the retirement we planned and worked so hard for but I know that I (we) made the absolute best decisions for the family and ultimately myself as I must admit, after three weeks retired I feel totally liberated and loving the freedom!

Malthusian

jamesd said:

Workerdrone said:

"Who on earth has a million pound pension:", "It's the governments fault we have the lowest state pension in Europe" 

With minimum wage at £8.91 an hour from 23, a 40 hour week for 52 weeks and state pension age of 68 the 8% contribution on it all (not required by law) would produce £216k if growth is 4.5% plus inflation, assuming contributions are also increased with inflation. To get to a million in today's money would take increasing from £123.55 to £873 a month. Using the 4% approximation the 216k would add an extra £8,640 of income a year,

With that "not required by law" you have rather handwaved away the fact that the contribution under auto-enrolment rules is £81.95 per month, not £123.55, due to the first £6,240pa of earnings being ignored. That cuts the eventual retirement income by a third.

Sure, the employer could go over and above the auto-enrolment rules and set it up as 8% of all earnings, but if you are going to assume that you may as well assume they operate a 5% / 5% scheme or any other number.

You have also assumed that the minimum wager has one job - not a safe assumption for someone on minimum wage.

4.5% above inflation is a very optimistic growth rate, particularly for someone who is probably invested in a bog-standard default fund.

I think auto-enrolment rules are better than nothing but I have also been guilty of defending them with dodgy assumptions (like ignoring the £6,240 threshold). People tend to miss that the point of auto enrolment rules is to reduce the need for means tested benefits, not to keep anyone in the manner to which they are accustomed.

Some other countries disadvantage large chunks of their populations with lower than assumed life expectancy by compelling higher contributions and not allowing the faster drawing that the UK's DC pension system provides.

Tbf to other countries they generally have fewer people with lower than assumed life expectancy than we do.

Sea_Shell

cfw1994 said:

ComicGeek said:

cfw1994 said:

Time.  That is the beauty of it all, eh!

And that's why I try and balance enjoying life now, while I'm still working, and saving for retirement. I worked hard at school and in my early career to get the best possible start, picked a career that I really enjoy - life doesn't only start when you retire, you have to make the most of all the time you get.

My brother in law passed away last year at 41, and that really hit home. No point only saving and not enjoying life when you don't make it to retirement, or don't have the health to enjoy it.

My wife has chronic pain and long term health issues, so we have always looked to balance living now and saving for the future.  

Best wishes for your wife: long term health issues are not nice 😔

Your point about your BiL passing hitting home is very true.  
I attended 4 funerals of good friends over a 12 month period a few years back.  2 my age.  I’ve always been reasonably interested in my future non-working life….but that period put it into laser focus 😳

Have a friend who was laid off recently: we talk a reasonable amount about pensions and money: we agree he doesn’t have to look for more work (& he doesn’t particularly want to).  His partner is aghast: thinks he is too young to retire 🧐   I need to speak with her: or maybe get @Sea_Shell to have a word 🤣

Well, it does depend on the dynamics of a relationship.   Is his partner still working?   Will she be expected to still do all the chores if her partner doesn't return to work, or will he pull his weight, domestically?  

I wouldn't have been happy if my DH retired, just to pursue his own hobbies, or sit on his back-side!!

Luckily my DH, upon "retiring", was happy to cook, clean etc etc, whilst i worked part-time. (and I did the same when I had a period of "sabatical" whilst DH worked FT) 

We found it worked well for us, until even my PT job started getting in the way of things we wanted to do.   We now share chores again.

MK62

Malthusian said:

jamesd said:

Workerdrone said:

"Who on earth has a million pound pension:", "It's the governments fault we have the lowest state pension in Europe" 

With minimum wage at £8.91 an hour from 23, a 40 hour week for 52 weeks and state pension age of 68 the 8% contribution on it all (not required by law) would produce £216k if growth is 4.5% plus inflation, assuming contributions are also increased with inflation. To get to a million in today's money would take increasing from £123.55 to £873 a month. Using the 4% approximation the 216k would add an extra £8,640 of income a year,

With that "not required by law" you have rather handwaved away the fact that the contribution under auto-enrolment rules is £81.95 per month, not £123.55, due to the first £6,240pa of earnings being ignored. That cuts the eventual retirement income by a third.

Sure, the employer could go over and above the auto-enrolment rules and set it up as 8% of all earnings, but if you are going to assume that you may as well assume they operate a 5% / 5% scheme or any other number.

You have also assumed that the minimum wager has one job - not a safe assumption for someone on minimum wage.

4.5% above inflation is a very optimistic growth rate, particularly for someone who is probably invested in a bog-standard default fund.

I think auto-enrolment rules are better than nothing but I have also been guilty of defending them with dodgy assumptions (like ignoring the £6,240 threshold). People tend to miss that the point of auto enrolment rules is to reduce the need for means tested benefits, not to keep anyone in the manner to which they are accustomed.

Some other countries disadvantage large chunks of their populations with lower than assumed life expectancy by compelling higher contributions and not allowing the faster drawing that the UK's DC pension system provides.

Tbf to other countries they generally have fewer people with lower than assumed life expectancy than we do.

To be fair, I think jamesd was more highlighting the fact of how difficult it would be for low paid people to amass a £1M pot rather than giving an illustration of what to actually expect under min auto enrolment rules.

Silvertabby

Sea_Shell said:

cfw1994 said:

ComicGeek said:

cfw1994 said:

Time.  That is the beauty of it all, eh!

And that's why I try and balance enjoying life now, while I'm still working, and saving for retirement. I worked hard at school and in my early career to get the best possible start, picked a career that I really enjoy - life doesn't only start when you retire, you have to make the most of all the time you get.

My brother in law passed away last year at 41, and that really hit home. No point only saving and not enjoying life when you don't make it to retirement, or don't have the health to enjoy it.

My wife has chronic pain and long term health issues, so we have always looked to balance living now and saving for the future.  

Best wishes for your wife: long term health issues are not nice 😔

Your point about your BiL passing hitting home is very true.  
I attended 4 funerals of good friends over a 12 month period a few years back.  2 my age.  I’ve always been reasonably interested in my future non-working life….but that period put it into laser focus 😳

Have a friend who was laid off recently: we talk a reasonable amount about pensions and money: we agree he doesn’t have to look for more work (& he doesn’t particularly want to).  His partner is aghast: thinks he is too young to retire 🧐   I need to speak with her: or maybe get @Sea_Shell to have a word 🤣

Well, it does depend on the dynamics of a relationship.   Is his partner still working?   Will she be expected to still do all the chores if her partner doesn't return to work, or will he pull his weight, domestically?  

I wouldn't have been happy if my DH retired, just to pursue his own hobbies, or sit on his back-side!!

Luckily my DH, upon "retiring", was happy to cook, clean etc etc, whilst i worked part-time. (and I did the same when I had a period of "sabatical" whilst DH worked FT) 

We found it worked well for us, until even my PT job started getting in the way of things we wanted to do.   We now share chores again.

I worked on for a couple of years after Mr S was made a redundancy offer he couldn't refuse.  During that time he did almost all of the chores, just leaving me with some of the cooking (my choice).  

Since I retired, we are back to sharing.  He still does all of the ironing, though!

Sea_Shell

I do feel we are all going to be expected to have a "greener" retirement...and that won't be about envy!! 😇

Don't plan on fulfilling those bucket lists, unless it involves going vegan or travelling by bicycle!! 😉

Albermarle

Silvertabby said:

Sea_Shell said:

cfw1994 said:

ComicGeek said:

cfw1994 said:

Time.  That is the beauty of it all, eh!

And that's why I try and balance enjoying life now, while I'm still working, and saving for retirement. I worked hard at school and in my early career to get the best possible start, picked a career that I really enjoy - life doesn't only start when you retire, you have to make the most of all the time you get.

My brother in law passed away last year at 41, and that really hit home. No point only saving and not enjoying life when you don't make it to retirement, or don't have the health to enjoy it.

My wife has chronic pain and long term health issues, so we have always looked to balance living now and saving for the future.  

Best wishes for your wife: long term health issues are not nice 😔

Your point about your BiL passing hitting home is very true.  
I attended 4 funerals of good friends over a 12 month period a few years back.  2 my age.  I’ve always been reasonably interested in my future non-working life….but that period put it into laser focus 😳

Have a friend who was laid off recently: we talk a reasonable amount about pensions and money: we agree he doesn’t have to look for more work (& he doesn’t particularly want to).  His partner is aghast: thinks he is too young to retire 🧐   I need to speak with her: or maybe get @Sea_Shell to have a word 🤣

Well, it does depend on the dynamics of a relationship.   Is his partner still working?   Will she be expected to still do all the chores if her partner doesn't return to work, or will he pull his weight, domestically?  

I wouldn't have been happy if my DH retired, just to pursue his own hobbies, or sit on his back-side!!

Luckily my DH, upon "retiring", was happy to cook, clean etc etc, whilst i worked part-time. (and I did the same when I had a period of "sabatical" whilst DH worked FT) 

We found it worked well for us, until even my PT job started getting in the way of things we wanted to do.   We now share chores again.

I worked on for a couple of years after Mr S was made a redundancy offer he couldn't refuse.  During that time he did almost all of the chores, just leaving me with some of the cooking (my choice).  

Since I retired, we are back to sharing.  He still does all of the ironing, though!

It appears that most of the retired/ soon to be retired regular contributors to this forum have stable family relationships ( where they help each other with chores as well , in some cases anyway ) as well as being financially comfortable. 
I wonder if the two things are linked ? Maybe having at least one financially savvy member  , helps a relationship survive ?

When I look around at some of our friends, I see an increasing number of financial and emotional disaster areas as they get older. Such as 55 year old divorcees , having to rent , with no pension or  savings to speak of  , for example ( and no idea about finances in general) 

Although it is just a sweeping generalisation ( many older single people have comfortable lives as well) it does show that we are in a bit of a bubble on this forum , albeit a comfortable well appointed one .