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

Flugelhorn

SouthCoastBoy said:

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

And I am pleased to have mine - DH and I reckon it was the only decent thing to come out of years working all hours for the NHS. 

pensionpawn

Sea_Shell said:

It's not just the pure financial element of "envy" either, but also the ability to early retire, if you choose to, as opposed to those who are paying something into a pension, but will still have to work until they get their SP.

I've kept my early retirement on the down low, as to not be accused of rubbing anyone's noses in it.   

We could have kept working and swelled the coffers even more, but we decided to call time on work!!

Same for us. Time remaining is more important than size of treasure chest.

Andy_L

SouthCoastBoy said:

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

Plenty of public sector jobs available if you want to do more than be envious

https://www.jobs.nhs.uk
https://www.civilservicejobs.service.gov.uk/csr/index.cgi
https://apply.army.mod.uk/
https://www.met.police.uk/car/careers/met/police-staff-roles/police-staff-vacancies/

etc etc

Anonymous101

Interesting point on keeping retirement, especially early retirement, quiet to try and avoid envy. I have a long standing plan to start my own consultancy business in a field that I'm currently employed in. I think this could also have an additional benefit of both allowing a phased period of slow down / introducing part-time working and masking the extent of retirement / wealth from others.

It seems at odds that much of modern society is geared up to displaying wealth or status in one way or another but that often comes with more negative than positive consequence in my opinion.

Sea_Shell

pensionpawn said:

Sea_Shell said:

It's not just the pure financial element of "envy" either, but also the ability to early retire, if you choose to, as opposed to those who are paying something into a pension, but will still have to work until they get their SP.

I've kept my early retirement on the down low, as to not be accused of rubbing anyone's noses in it.   

We could have kept working and swelled the coffers even more, but we decided to call time on work!!

Same for us. Time remaining is more important than size of treasure chest.

And then family expect that time to be at their disposal!!!   

bostonerimus

MK62 said:

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

Yes there are many complex variables, but the OECD did a pretty comprehensive analysis when the new flat rate pension came in and found the UK state pension to be quite low. The UK does have higher private pension amounts than many other countries, but that points to the UK's greater reliance on private DC pensions. The UK is great if you have a good job and can afford to use all the tax advantaged ways of investing and the stock market is kind to you over the years, but for many people the advantages of the system are out of reach.

bluenose1

bostonerimus said:

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.

Totally agree with your comments. The tax advantages definitely favour those with more disposable income, difficult to take advantage of tax breaks etc if you are on low pay and struggling to make ends meet.  I feel very fortunate that my oh and i have DB Pensions and can see so many schemes now where these are being ended in favour of DC Pensions.
Think  most of us on here are the fortunate ones and I for one think for me it has been down to a lot of luck with my job, marriage etc.
Never like to self congratulate myself too much as per the famous Baz Luhrmann Sunscreen 
Whatever you do, don't congratulate yourself too much
Or berate yourself either
Your choices are half chance, so are everybody else's...............

If you have never heard it lyrics worth a read
lyricshttps://www.justsomelyrics.com/1811514/baz-luhrmann-baz-luhrmann-the-sunscreen-song-lyrics.html

zagfles

bostonerimus said:

MK62 said:

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

Yes there are many complex variables, but the OECD did a pretty comprehensive analysis when the new flat rate pension came in and found the UK state pension to be quite low. The UK does have higher private pension amounts than many other countries, but that points to the UK's greater reliance on private DC pensions. The UK is great if you have a good job and can afford to use all the tax advantaged ways of investing and the stock market is kind to you over the years, but for many people the advantages of the system are out of reach.

It's the way benefits policy in general in the UK has slowly drifted from contributory benefits to means tested benefits over the last few decades, so the state pension in common with other contributory benefits, eg unemployment, sickness, bereavement etc the UK lags other countries, but when it comes to means tested benefits the UK is far more generous, particularly for low income families. Looking at the latest OECD data UK spending on family benefits is still the highest in the world outside the Nordic countries and Luxembourg, despite so called "austerity". https://data.oecd.org/socialexp/family-benefits-public-spending.htm

Yet still there is pressure from the media and virtue signalling celebs over providing even more for families, such as free "school meals" in the school holidays, and carrying on the temporary COVID boost to universal credit etc. Children going hungry makes better headlines than pensioners going hungry, and the headlines never come with any actual anaysis of the family budget.

So if we want to be more like the average country in the developed world, we need to cut family means tested benefits and increase contributory benefits like the state pension. Anyone want to start a campaign?

michaels

bluenose1 said:

bostonerimus said:

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.

Totally agree with your comments. The tax advantages definitely favour those with more disposable income, difficult to take advantage of tax breaks etc if you are on low pay and struggling to make ends meet.  I feel very fortunate that my oh and i have DB Pensions and can see so many schemes now where these are being ended in favour of DC Pensions.
Think  most of us on here are the fortunate ones and I for one think for me it has been down to a lot of luck with my job, marriage etc.
Never like to self congratulate myself too much as per the famous Baz Luhrmann Sunscreen 
Whatever you do, don't congratulate yourself too much
Or berate yourself either
Your choices are half chance, so are everybody else's...............

If you have never heard it lyrics worth a read
lyricshttps://www.justsomelyrics.com/1811514/baz-luhrmann-baz-luhrmann-the-sunscreen-song-lyrics.html

Those on low incomes and thus eligible for benefits tend to suffer extremely high effective marginal tax rates, which means if they do contribute to pensions, especially via sal sac, the net cost can be minimal as pension contributions are deducted from salary before calculating eligibility for most benefits.

MalMonroe

Sea_Shell said:

pensionpawn said:

Sea_Shell said:

It's not just the pure financial element of "envy" either, but also the ability to early retire, if you choose to, as opposed to those who are paying something into a pension, but will still have to work until they get their SP.

I've kept my early retirement on the down low, as to not be accused of rubbing anyone's noses in it.   

We could have kept working and swelled the coffers even more, but we decided to call time on work!!

Same for us. Time remaining is more important than size of treasure chest.

And then family expect that time to be at their disposal!!!   

Do they??? 

Mine don't. And my time is my own.