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

NannaH

Sea_Shell said:

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!! 😉

Apart from the super rich, who will continue their private jet and mega yacht lifestyle.  Meanwhile us plebs will be conned/forced into giving up our once yearly flight and efficient gas boilers in order to ‘save the planet’.  

jamesd

MK62 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,

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.

Yes, I simply picked one fairly optimistic possible situation to illustrate the potential outcome. It's entirely correct that the law doesn't require contributions on all of pay and that people working more than one job can exceed minimum wage in total while never going over the threshold to get any mandatory employer contributions. And of course also correct that a default fund might be used and not be a high equity balanced managed one that I assumed to use 4.5% plus inflation growth.

Note that £873 to get to a million is wrong and corrected in the initial post, it's £573 with the 4.5% plus inflation growth assumption I used, result in today's money. Multiply final pot by 2.44 to get nominal instead of today's money number, this assumes 2% inflation for all 45 years of accumulation.

While the £123.55 would benefit from lots of employer matching, the increase to £573 doesn't have to get that so it's likely to be much more costly for the employee in reduced take home pay terms than the original £123.55.

What is clear enough is that even with the minimum auto-enrollment requirement the extra pension is a highly useful increase above the single tier state pension level.

drummersdale

Oh the irony of retired Civil Servants (I'm not quite there just yet) getting a 3.1% pension uplift based on September's CPI rate - considerably greater than what they will have received for the last 10 year pay freeze (for most) - good luck to them.  Unless the Government can find some wheeze to get out of it of course.

zagfles

NannaH said:

Sea_Shell said:

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!! 😉

Apart from the super rich, who will continue their private jet and mega yacht lifestyle.  Meanwhile us plebs will be conned/forced into giving up our once yearly flight and efficient gas boilers in order to ‘save the planet’.  

Yes the hypocrisy is unbelievable, eg bands doing "eco friendly" tours but flying on private jets

https://www.bbc.co.uk/news/entertainment-arts-58898766

Albermarle

zagfles said:

NannaH said:

Sea_Shell said:

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!! 😉

Apart from the super rich, who will continue their private jet and mega yacht lifestyle.  Meanwhile us plebs will be conned/forced into giving up our once yearly flight and efficient gas boilers in order to ‘save the planet’.  

Yes the hypocrisy is unbelievable, eg bands doing "eco friendly" tours but flying on private jets

https://www.bbc.co.uk/news/entertainment-arts-58898766

Lewis Hamilton is also a green supporter 

Apart from the actual races themselves, there are thousands of practice laps and worst of all , the whole show is moved every couple of weeks to another country by plane.

LHW99

jamesd said:

MK62 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,

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.

Yes, I simply picked one fairly optimistic possible situation to illustrate the potential outcome. It's entirely correct that the law doesn't require contributions on all of pay and that people working more than one job can exceed minimum wage in total while never going over the threshold to get any mandatory employer contributions. And of course also correct that a default fund might be used and not be a high equity balanced managed one that I assumed to use 4.5% plus inflation growth.

Note that £873 to get to a million is wrong and corrected in the initial post, it's £573 with the 4.5% plus inflation growth assumption I used, result in today's money. Multiply final pot by 2.44 to get nominal instead of today's money number, this assumes 2% inflation for all 45 years of accumulation.

While the £123.55 would benefit from lots of employer matching, the increase to £573 doesn't have to get that so it's likely to be much more costly for the employee in reduced take home pay terms than the original £123.55.

What is clear enough is that even with the minimum auto-enrollment requirement the extra pension is a highly useful increase above the single tier state pension level.

And perhaps for the person being considered who has spent a lifetime working at minimum wage, the combination of the £216k DC pot plus full SP would not feel as uncomfortable as it would for a middle manager used to a much higher income, who still opts out of the autoenrollment pension (it happens   )

marycanary

Albermarle said:

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 .

As a divorcee, I do sometimes feel like an outsider as many discussions include the pension situation and plans of partners, DH, OH etc. Of course, good luck to all but being single and having brought up a family on one income does make planning a comfortable retirement more challenging.

sammyjammy

Albermarle said:

zagfles said:

NannaH said:

Sea_Shell said:

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!! 😉

Apart from the super rich, who will continue their private jet and mega yacht lifestyle.  Meanwhile us plebs will be conned/forced into giving up our once yearly flight and efficient gas boilers in order to ‘save the planet’.  

Yes the hypocrisy is unbelievable, eg bands doing "eco friendly" tours but flying on private jets

https://www.bbc.co.uk/news/entertainment-arts-58898766

Lewis Hamilton is also a green supporter 

Apart from the actual races themselves, there are thousands of practice laps and worst of all , the whole show is moved every couple of weeks to another country by plane.

Yes bit with his holier than thou attitude we have to forgive him everything

Diplodicus

The average MSE reader of the savings and pensions boards is someone on the cusp of retirement or early retirement. 
It is a uniquely privileged generation: a lifetime without wars, plague or famine was largely unknown to previous generations. 
When I was young, pensioners were the poor of society; and the legacy lives on in free transport, prescriptions etc. Also, the expectation was that we would work until retirement and die within ten years of drawing a pension (the work environment was much harder then). They laid the foundation for our easy lives. 
And now, for many of us, these senior years are the easiest for making money. 

cfw1994

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.

His partner has worked *part time* for many years now....& 'expects' him to work to enable their lifestyle to continue (likes driving their BMW, they've had at least 3 changes of sofa and 2 flooring in the time we've had ours 🤣).

I'm reasonably sure he would pull his weight (& does already).
The fact is that it sounds like his funds do leave enough to continue "their lifestyle", but I don't think she really understands that.  He has actually asked me to run through numbers with her 😳 (I'm defo not qualified to be a financial advisor to them 🤣)

The relevant thing to this thread is that neither of them have experienced direct early loss of relatives or (beyond a shared pal) close friends.   Not had that moment of focus that we are not all around forever.

Sea_Shell said:

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!! 😉

Bicycle?
Sounds great to me!
The bicycle is the future of transport......