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

zagfles

saucer said:

c'est_moi said:

I was very lucky to get my job in 1991. I trained as a teacher and got the one and only job that I was qualified for in my area. Unemployment rates were still high and professional jobs few and far between in the region. The house we bought was affordable because of the state it was in. We had to spend a lot of money fitting a new boiler, radiators, kitchen and bathroom to make it habitable - all done gradually over 7 years as and when we had the money to do so. It broke my heart to sell it at a loss, but had no choice as we had started a family by then.

There was no chance of getting a council house. They had been flogged off in the previous decade. The were some private rentals, but most were in students lets.

I am not saying that youngsters have it easy. I do worry about my daughter who is finding it very difficult to get a mortgage - and in fact will need a hand up from bank of mum and dad to be able to get together enough of a deposit. However, I will not stand there and be lectured by a 30 something colleague who knows nothing of the financial struggles I have had and who willfully chooses to do nothing to plan for their own financial future.

We’re largely agreed then. I just think that it’s harder for them in some ways. What you and I have (I assume) is a gilt edged db pension for life that allows us to consider early retirement. This is something that is almost unimaginable for younger generations. 

A generation ago there was no real pension certainty, even for those who had so-called gilt edged DB pensions. Until the mid 80's there was no indexation requirement and when it was eventually brought in it was capped at 3% IIRC at a time inflation was commonly and recently in double figures. They were fine if you expected to stay in the same job your entire life, but who can guarantee that, for those who moved around a lot it was easy to see why they were pursuaded out of company DB schemes into private DC schemes. Stockmarket rising at 10%+ pa, deferred DB pension capped at 3%. Plus company goes bust, or decides to use the DB scheme as a piggy bank, you could lose the lot. Do something wrong at work and you could lose the lot.

So now, who knows. The stockmarket might rise massively over the next few decades so that even a minimum AE scheme gets a decent pension. But young people a generation ago were as uncertain about their pension as young people today are.

zagfles

Bobziz said:

zagfles said:

Bobziz said:

zagfles said:

Bobziz said:

Workerdrone said:

Bobziz said:

Sewing division and fear is clearly useful for some. Be great if people dug into the evidence or perhaps lack of it before making broad generalisations. 

We'll it's a bit difficult to find actual evidence given how people keep their financial matters quite close to their chest (Apart from on forums like this), hence the purpose of the discussion. As an earlier poster put, its quite possible that the bitter complainers are just the minority who you find on comments sections. Personally I am worried about how my sister in law will take it. She's always been a wasteful spender, my brother in law works, she doesn't although there's no actual reason for it. Unfortunately he has close to zero pension so they will be in a bit of a pickle. She has a tendency to make family gatherings very awkward when she's in a mood.

Agree, it is difficult but that didn't stop you writing "It seems the majority of Britains are still content to bury their heads regarding retirement savings whilst at the same time splurging on the latest phones, subscriptions, frothy coffees, foreign holidays and eating out.". 

We all like to have opinions, myself included, I just wonder whether the world would be a better place if we spent a little more time looking at the evidence before we made them, particularly if they result in us viewing others negatively. 

Jealousy and resentment exists, but I'm conscious that we still seem to be far from having a society where all have equal opportunities. As a white middle class male, I feel privileged in that my opportunities have been fairly easy to come by. I've still had to make the most of them, but they were there in the first place. Others are not so lucky.

So, saving is easier for some than others, that seems clear. However, I suspect that there are also those that for various reasons do have the means to save and build a reasonable pension but do not. Martin is trying to deal with the ignorance aspect of this with the push to improve education. As parents and grandparents we can help here too. 

Once people have the knowledge and ability to save then in theory they should. However, I suspect that there will still be those that don't, and they may blame others for this as you say. I'm not sure there's a lot we can do about this other than maybe not fear them and reflect that their jealousy and animosity towards others may result from their own unhappiness. Hopefully they're few and far between !

Yes, people should definitely look at the actual evidence from studies of the whole population, rather than anecdotes (aka "lived experience") and extremely rare events, which grievance mongers continually use to convince us all that opportunity and outcomes in life are intricately linked to our identity in terms of race/gender/religion/sexuality/background etc.

That would indeed make the world a much better place.

I'm guessing that you're not a gay black disabled Muslim women ?

Why, do you want an anecdote? I guess they're more interesting than actual statistical evidence from the whole population...

Fire away with your evidence. 

What evidence do you want?

Surely you've already researched the evidence anyway - you complain about the PP expressing an opinion about the majority burying their heads in the sand etc without looking at the evidence, then you then express an opinion about how privileged you are because of your identity, so surely that opinion is evidence based? What evidence did you base it on?

Bobziz

zagfles said:

Bobziz said:

zagfles said:

Bobziz said:

zagfles said:

Bobziz said:

Workerdrone said:

Bobziz said:

Sewing division and fear is clearly useful for some. Be great if people dug into the evidence or perhaps lack of it before making broad generalisations. 

We'll it's a bit difficult to find actual evidence given how people keep their financial matters quite close to their chest (Apart from on forums like this), hence the purpose of the discussion. As an earlier poster put, its quite possible that the bitter complainers are just the minority who you find on comments sections. Personally I am worried about how my sister in law will take it. She's always been a wasteful spender, my brother in law works, she doesn't although there's no actual reason for it. Unfortunately he has close to zero pension so they will be in a bit of a pickle. She has a tendency to make family gatherings very awkward when she's in a mood.

Agree, it is difficult but that didn't stop you writing "It seems the majority of Britains are still content to bury their heads regarding retirement savings whilst at the same time splurging on the latest phones, subscriptions, frothy coffees, foreign holidays and eating out.". 

We all like to have opinions, myself included, I just wonder whether the world would be a better place if we spent a little more time looking at the evidence before we made them, particularly if they result in us viewing others negatively. 

Jealousy and resentment exists, but I'm conscious that we still seem to be far from having a society where all have equal opportunities. As a white middle class male, I feel privileged in that my opportunities have been fairly easy to come by. I've still had to make the most of them, but they were there in the first place. Others are not so lucky.

So, saving is easier for some than others, that seems clear. However, I suspect that there are also those that for various reasons do have the means to save and build a reasonable pension but do not. Martin is trying to deal with the ignorance aspect of this with the push to improve education. As parents and grandparents we can help here too. 

Once people have the knowledge and ability to save then in theory they should. However, I suspect that there will still be those that don't, and they may blame others for this as you say. I'm not sure there's a lot we can do about this other than maybe not fear them and reflect that their jealousy and animosity towards others may result from their own unhappiness. Hopefully they're few and far between !

Yes, people should definitely look at the actual evidence from studies of the whole population, rather than anecdotes (aka "lived experience") and extremely rare events, which grievance mongers continually use to convince us all that opportunity and outcomes in life are intricately linked to our identity in terms of race/gender/religion/sexuality/background etc.

That would indeed make the world a much better place.

I'm guessing that you're not a gay black disabled Muslim women ?

Why, do you want an anecdote? I guess they're more interesting than actual statistical evidence from the whole population...

Fire away with your evidence. 

What evidence do you want?

Maybe you could start with gender pay gap ? 

SouthCoastBoy

I am definitely envious of people in receipt of a db pension 

zagfles

Bobziz said:

zagfles said:

Bobziz said:

zagfles said:

Bobziz said:

zagfles said:

Bobziz said:

Workerdrone said:

Bobziz said:

Sewing division and fear is clearly useful for some. Be great if people dug into the evidence or perhaps lack of it before making broad generalisations. 

We'll it's a bit difficult to find actual evidence given how people keep their financial matters quite close to their chest (Apart from on forums like this), hence the purpose of the discussion. As an earlier poster put, its quite possible that the bitter complainers are just the minority who you find on comments sections. Personally I am worried about how my sister in law will take it. She's always been a wasteful spender, my brother in law works, she doesn't although there's no actual reason for it. Unfortunately he has close to zero pension so they will be in a bit of a pickle. She has a tendency to make family gatherings very awkward when she's in a mood.

Agree, it is difficult but that didn't stop you writing "It seems the majority of Britains are still content to bury their heads regarding retirement savings whilst at the same time splurging on the latest phones, subscriptions, frothy coffees, foreign holidays and eating out.". 

We all like to have opinions, myself included, I just wonder whether the world would be a better place if we spent a little more time looking at the evidence before we made them, particularly if they result in us viewing others negatively. 

Jealousy and resentment exists, but I'm conscious that we still seem to be far from having a society where all have equal opportunities. As a white middle class male, I feel privileged in that my opportunities have been fairly easy to come by. I've still had to make the most of them, but they were there in the first place. Others are not so lucky.

So, saving is easier for some than others, that seems clear. However, I suspect that there are also those that for various reasons do have the means to save and build a reasonable pension but do not. Martin is trying to deal with the ignorance aspect of this with the push to improve education. As parents and grandparents we can help here too. 

Once people have the knowledge and ability to save then in theory they should. However, I suspect that there will still be those that don't, and they may blame others for this as you say. I'm not sure there's a lot we can do about this other than maybe not fear them and reflect that their jealousy and animosity towards others may result from their own unhappiness. Hopefully they're few and far between !

Yes, people should definitely look at the actual evidence from studies of the whole population, rather than anecdotes (aka "lived experience") and extremely rare events, which grievance mongers continually use to convince us all that opportunity and outcomes in life are intricately linked to our identity in terms of race/gender/religion/sexuality/background etc.

That would indeed make the world a much better place.

I'm guessing that you're not a gay black disabled Muslim women ?

Why, do you want an anecdote? I guess they're more interesting than actual statistical evidence from the whole population...

Fire away with your evidence. 

What evidence do you want?

Maybe you could start with gender pay gap ? 

OK. Here, from the ONS:

https://www.ons.gov.uk/employmentandlabourmarket/peopleinwork/earningsandworkinghours/bulletins/genderpaygapintheuk/2018

The most interesting bit IMO is fig. 2, at it states, "The gender pay gap for full-time employees is close to zero for those aged between 18 and 39 years"

Did you know that? Why do you think that is? Do you ever hear it mentioned when the gender pay gap is talked about? It's quite a significant thing, don't you think? After all, if as we're led to believe by the grievance mongers, it's all about sexism and discrimination, then you'd expect the GPG to be quite even across age and working hours, wouldn't you? But it isn't.

So why? Maybe because women are more likely to choose part time work, or take career breaks, and so gain less experience and don't progress as fast in their career. So due to different choices men and women make, rather than any difference in opportunity.

Silvertabby

SouthCoastBoy said:

I am definitely envious of people in receipt of a db pension 

I was once told how lucky I was to have an Armed Forces pension.  Yes, lucky to have reached retirement with my life, limbs and mind intact.  Unlike so many others. 

Bobziz

zagfles said:

OK. Here, from the ONS:

https://www.ons.gov.uk/employmentandlabourmarket/peopleinwork/earningsandworkinghours/bulletins/genderpaygapintheuk/2018

The most interesting bit IMO is fig. 2, at it states, "The gender pay gap for full-time employees is close to zero for those aged between 18 and 39 years"

Did you know that? Why do you think that is? Do you ever hear it mentioned when the gender pay gap is talked about? It's quite a significant thing, don't you think? After all, if as we're led to believe by the grievance mongers, it's all about sexism and discrimination, then you'd expect the GPG to be quite even across age and working hours, wouldn't you? But it isn't.

So why? Maybe because women are more likely to choose part time work, or take career breaks, and so gain less experience and don't progress as fast in their career. So due to different choices men and women make, rather than any difference in opportunity.

Thanks, yes interesting. You had me until you started to interpret the data. So in order to maintain the human race women should accept that their earning potential will not be as great as their male counterparts and therefore their ability to build a comparable pension is restricted ? No doubt there are numerous ways to interpret the reasons for the pay gap but the fact is that it does still exist and therefore opportunity is not yet equal. The use of median figures throws up some interesting points too. Anyway, interesting as this discussion is, I feel that we're in danger of going far off of the OP's topic now, so I'll stop here.

zagfles

Bobziz said:

zagfles said:

OK. Here, from the ONS:

https://www.ons.gov.uk/employmentandlabourmarket/peopleinwork/earningsandworkinghours/bulletins/genderpaygapintheuk/2018

The most interesting bit IMO is fig. 2, at it states, "The gender pay gap for full-time employees is close to zero for those aged between 18 and 39 years"

Did you know that? Why do you think that is? Do you ever hear it mentioned when the gender pay gap is talked about? It's quite a significant thing, don't you think? After all, if as we're led to believe by the grievance mongers, it's all about sexism and discrimination, then you'd expect the GPG to be quite even across age and working hours, wouldn't you? But it isn't.

So why? Maybe because women are more likely to choose part time work, or take career breaks, and so gain less experience and don't progress as fast in their career. So due to different choices men and women make, rather than any difference in opportunity.

Thanks, yes interesting. You had me until you started to interpret the data. So in order to maintain the human race women should accept that their earning potential will not be as great as their male counterparts and therefore their ability to build a comparable pension is restricted ?

"Should"?? Does the evidence imply an obligation to act in a particular way, rather than a choice to? You're now "interpreting".

No doubt there are numerous ways to interpret the reasons for the pay gap but the fact is that it does still exist and therefore opportunity is not yet equal. The use of median figures throws up some interesting points too. Anyway, interesting as this discussion is, I feel that we're in danger of going far off of the OP's topic now, so I'll stop here.

Ah yes, the usual assumption that a difference in outcome implies opportunity is not equal rather than different life choices. So tell me, do you think the 2000% prison population gap (men are 20 times more likely to go to prison than women) is all to do with an unequal playing field in the criminal justice system, or do you think it's more down to different life choices made by men and women? Then answer the same question about the GPG.

Then you might start to think about whether evidence of a difference in outcome is actually evidence of a difference in opportunity.

bostonerimus

The UK has some great tax advantaged ways to save with ISAs and pensions and generous dividend and capital gains allowances, but you have to earn enough to take advantage of them and if you have to largely rely on the UK state pension in retirement you will be getting one of the lowest state pension benefits in the developed world.

DC pensions are largely an American invention and were initially a way for companies to convert after tax savings plans to pre-tax plans. There were to augment DB plans. However, they have largely replaced them because they shift the cost and risk from employers to employees. The lack of sufficient guaranteed lifetime index linked income and a lack of sufficient contributions means that many people have poor pension provisions. Combine that with housing, education, increased NICs, fuel and food costs and the predicted spike in inflation and things do not look rosy for many.

MK62

bostonerimus said:

and if you have to largely rely on the UK state pension in retirement you will be getting one of the lowest state pension benefits in the developed world.

There are several reasons why it's difficult to objectively compare headline rates of different countries state pensions.....healthcare provision for one (though admittedly for obvious reasons the NHS has been under a lot of strain in the last few years).

Then there's the relative cost of living in each country, eligibility rules (some countries have higher eligibility requirements than the UK in order to get the maximum state pension level), contribution levels, treatment of couples......and so on.

This is not a defence (or otherwise) of the UK's state pension - just saying that comparing maximum headline rates can be misleading.

For anyone interested, there is an interesting paper here.... https://researchbriefings.files.parliament.uk/documents/SN00290/SN00290.pdf