Pensions? Are they even worth it?

[Deleted User]

Albermarle said:

In the UK we no longer believe that rich people should get more taxpayers' money than poorer people. (Not when it comes to State Pension, anyway.)

As long as you discount , higher rate tax relief , ISA allowances etc , none of which are of any benefit to a significant part of UK society .

I think we need to be clear that in every western country “rich people” do not get more taxpayers’ s money.  Invariably they are net contributors to the tax base.  Thats accounting for pension rebates, ISA allowances, etc. Poorer people tend to be net recipients of subsidies which come from rich peoples’ taxes.  

vart400

Allumis said:

I'm not the best when it comes to fully understanding my financial future but I'm at that stage again where I'm being re-enrolled for a pension and tying to understand is it even worth it or "what's the point"

I have what I would consider a very good salary and contributing 4% of that per month would give me an annuity of £2,009 PA, my rent PA is £8,160, CT is £1500 sooo I'm investing into something that wont even cover a roof over my head never mind electricity, water, heating, food etc?

What's the point? I can't understand why I would invest into a pension when the returns are not even enough to cover living costs...... 

I say stay in. Is that £2,009 PA value from contributions you've already paid, or what you'll get if you keep contributing 4%?

theoretica

How many years of working life and how many of retirement might you have? I figured roughly one year of earning and one year of state pension between them need to pay for two years of living.  So it was easy to work out the value to my future of saving a lot.

cisamcgu

Deleted_User said:

I think you are underestimating the benefits of UK pensions. 

For info, in case anyone is interested :

Ranked: The Best and Worst Pension Plans, by Country (visualcapitalist.com)

[Deleted User]

cisamcgu said:

Deleted_User said:

I think you are underestimating the benefits of UK pensions. 

For info, in case anyone is interested :

Ranked: The Best and Worst Pension Plans, by Country (visualcapitalist.com)

Usually such comparisons encourage large mandatory contributions (aka tax) which makes Nordic countries top of the list. 

Personally, I like a small pension tax (national insurance/CPP contributions, etc) and encouragement for people to invest in their retirement.    Gives one freedom to reduce or increase contributions depending on whats going on in your life.   With freedom comes responsibility.  Thats the bit that some complain about. 

JoeCrystal

ajfielden said:

Malthusian said:

The UK state pension is also tax free if you have no other income due to the personal allowance.

And I'd say £9339.20/year is barely adequate, and most people might to struggle to live on it.

I don't know. If you don't need to pay the mortgage or pay the rents and keep your spending low, then yes, one can easily live on such a generous income, providing you do not opt for many luxuries.  It is high enough to pay for all basic life needs and, indeed, designed to pay for the bare survival.

JoeCrystal

Pondskater said:

Wish I had known where your mum was able to buy a three bed detached house in the 80s for less than £7000. I was looking at crummy flats in run down areas outside Glasgow and they cost more than that and the interest rates were eye watering,

Maybe it came with an RTB discount?!

JoeCrystal

Thrugelmir said:

Basic numeracy skills are pretty shocking these days. One can only assume that basic finance skills are getting even worse. What used to be past down from generation to generation is being lost. Little hope for the next generation. 

Indeed, I had a young employee a few months ago really angry about paying taxes! Kept trying to convince our payroll admin that the payroll must mess up his tax code since he was "only" on £10 an hour (at 37.5 hours). Had to sit down with him and explain that, yes, that tax code is right, yes that is the amount of taxes and NI you have to pay. And no, please do not opt-out of the pension scheme pretty please!!!

[Deleted User]

There are some smart and some dumb people in every generation.  

Workerdrone

Sadly I think this might be a case of Trolling, we don't have any details on the OP's age or what the good salary is. If living expenses are crippling, and it's genuine, at least he is on the right forum. Im sure Martins money diet, downshift challenge etc could help trim those bills down freeing up some extra cash for investment.

But the attitude displayed in the original post does mirror a great deal of the comments I see on various pension articles. An earlier poster nailed it when they suggested he was heading for cardboard alley.