Have 10% inflation and falling markets affected your drawdown plan?

thriftytracey

I've reduced my drawdown by 50% and making up the shortfall from my OH state pension, which we used to save.  I don't qualify for state pension until 2026.  I've stopped drawdown on my OH secondary pension altogether, luckily he has a DB pension.  Again, we used to save that (a modest amount).

2022 has not been a good year and who knows how long it could go on for.

arnoldy

OldScientist said:

In 2016, golf courses contributed over £2 billion to the UK economy (on an economic activity of about £10billion, see https://www.karlmccartney.co.uk/news/value-golf-uk-economy) and bring in tourists. The median salary for a Golf Club manager (see https://www.payscale.com/research/UK/Job=Golf_Club_Manager/Salary) is just under £30k, so just over the loan repayment threshold.

As for cake decorating, as far as I can tell, there are no degrees in the UK, but certificates and diplomas do exist (the latter is a Level 3, 150 hour course). There's a market for bespoke decorated cakes (e.g. birthdays and weddings) and I would imagine some people taking the courses go into business for themselves (excellent entrepreneurship) or otherwise work in the catering trade.

Yes I don't dispute that but it's not necessary to have a degree surely - most of the student loans and tuition which at £30kpa for Golf Club Manager will never be paid back to the public purse.

For example, you don't need a degree to be an electrician - and they are dealing with serious stuff MW energies, 415V 3 phase - stuff that is complex, mission critical, and can kill. It has to be got right. Ditto when you go on holiday the technicians who service, maintain and look after your £100m aeroplane & its engines probably won't have a degree.

Much of the degree system is devalued and a feeding frenzy which will ultimately be paid for by the long-suffering taxpayer. Academic rigour needs to be restored, that's not in any way to devalue what are important vocational skills such as golf or cake making.

NannaH

DH has retrained to go self employed,  the plan is to work very part time within 5 years (at  around 62) which will mean not having to draw from pensions for as long as possible, instead of entering drawdown at 63 in 2028.  He has a DB pension starting in 2025, of £6k in current value that can be funnelled into pensions or savings for at least 5 years.   Working 2 (easy) days a week for 10 months a year will get him £33k gross / £ 26k net so that’s the plan.  

It was a big gamble, leaving an almost £60k job to retrain and go it alone,  it’s taken 10 months and £12k of course fees,  not to mention no income for 7 of the 10 months,  but he couldn’t carry on doing 12 hour day/night shifts for another 7 years.  

kinger101

arnoldy said:

OldScientist said:

In 2016, golf courses contributed over £2 billion to the UK economy (on an economic activity of about £10billion, see https://www.karlmccartney.co.uk/news/value-golf-uk-economy) and bring in tourists. The median salary for a Golf Club manager (see https://www.payscale.com/research/UK/Job=Golf_Club_Manager/Salary) is just under £30k, so just over the loan repayment threshold.

As for cake decorating, as far as I can tell, there are no degrees in the UK, but certificates and diplomas do exist (the latter is a Level 3, 150 hour course). There's a market for bespoke decorated cakes (e.g. birthdays and weddings) and I would imagine some people taking the courses go into business for themselves (excellent entrepreneurship) or otherwise work in the catering trade.

Yes I don't dispute that but it's not necessary to have a degree surely - most of the student loans and tuition which at £30kpa for Golf Club Manager will never be paid back to the public purse.

For example, you don't need a degree to be an electrician - and they are dealing with serious stuff MW energies, 415V 3 phase - stuff that is complex, mission critical, and can kill. It has to be got right. Ditto when you go on holiday the technicians who service, maintain and look after your £100m aeroplane & its engines probably won't have a degree.

Much of the degree system is devalued and a feeding frenzy which will ultimately be paid for by the long-suffering taxpayer. Academic rigour needs to be restored, that's not in any way to devalue what are important vocational skills such as golf or cake making.

Are you against vocational qualifications or for them?  Hard to tell.

How many people with a doctorate in history are doing what they trained for compared to Level 3 cake decorators?

bostonerimus

pensionpawn said:

arnoldy said:

As someone who had his University tuition paid by the state, I'm astonished that governments have got away with putting an extra 9% on young people's income tax.

Perhaps the fair way out would be to merge income tax and national insurance (and abolish student loan repayments)?  This would mean retired people would essentially pay NI on their pensions.

A hard one to sell though.

Too many people go to university to study "degrees" in non-subjects like Golf Studies or Cake Decoration. They never earn the threshold to pay the 9%. They should lower the threshold to the personal allowance £12,570. That would concentrate minds.

 

Precisely. I studied Electrical & Electronic engineering in the 1980's. It was also the "thin sandwich" variant as I was sponsored (an undergraduate apprentice) so I studied Oct - Mar and worked Apr - Sep for 3 years with my 4th year entirely at university. Since graduating I believe that my level of income tax has repaid my "student" loans many times with interest. Blair conned so many young people into believing that any degree is worth studying and made all tax payers pay for them (when the loans are wiped out). Not all degrees are equal and some are worth more to society than others. However that's for another thread..

I did physics in the early 80s and still feel that education should be available without direct tuition costs to the student. I come from a modest background and was grateful for my university grant as it allowed be to work hard at my degrees and fulfill myself. Unfortunately the UK hasn't got much of that back in taxes as the lack of good of opportunities in late 80s UK for PhD. physicists resulted in me moving overseas and paying hundreds of thousands in tax to the USA.

I'm also grateful for all the calculus and statistics I learned as it gave me the facility to understand that problem of retirement and come up with a solution matched to my particular circumstances and wishes.

[Deleted User]

bostonerimus said:

pensionpawn said:

arnoldy said:

As someone who had his University tuition paid by the state, I'm astonished that governments have got away with putting an extra 9% on young people's income tax.

Perhaps the fair way out would be to merge income tax and national insurance (and abolish student loan repayments)?  This would mean retired people would essentially pay NI on their pensions.

A hard one to sell though.

Too many people go to university to study "degrees" in non-subjects like Golf Studies or Cake Decoration. They never earn the threshold to pay the 9%. They should lower the threshold to the personal allowance £12,570. That would concentrate minds.

 

Precisely. I studied Electrical & Electronic engineering in the 1980's. It was also the "thin sandwich" variant as I was sponsored (an undergraduate apprentice) so I studied Oct - Mar and worked Apr - Sep for 3 years with my 4th year entirely at university. Since graduating I believe that my level of income tax has repaid my "student" loans many times with interest. Blair conned so many young people into believing that any degree is worth studying and made all tax payers pay for them (when the loans are wiped out). Not all degrees are equal and some are worth more to society than others. However that's for another thread..

I did physics in the early 80s and still feel that education should be available without direct tuition costs to the student. I come from a modest background and was grateful for my university grant as it allowed be to work hard at my degrees and fulfill myself. Unfortunately the UK hasn't got much of that back in taxes as the lack of good of opportunities in late 80s UK for PhD. physicists resulted in me moving overseas and paying hundreds of thousands in tax to the USA.

I'm also grateful for all the calculus and statistics I learned as it gave me the facility to understand that problem of retirement and come up with a solution matched to my particular circumstances and wishes.

It is available. Poor people get financial help. On the other hand, I am not sure why a poor corner shop vendor should be subsidizing university students with a bunch of DB pensions and other assets in their future.  Does not seem fair.  Also, I noticed that some students don’t value the “free” education and waste their time at university.  Appreciated more when they have to pay. 

SouthCoastBoy

Albermarle said:

SouthCoastBoy said:

 bostonerimus said:

My observation is that quite a few people answering have DB pensions, that begs the question of why more without DB's aren't answering...maybe it's too scary to think about, and that SP is a critical part of everyone's plan which makes the Hunt/Sunak Fiscal statement all the more nerve wracking.

I'm 100% dc and from my perspective I will most probably continue working rather than retire early. It was interesting reading comments of db increases on some pensions being restricted to 2.5% or 5%. That is not dissimilar to holding cash in current climate I am now getting over 4% on 12 month fixed term bonds

If I remember correctly you were anxious about retiring early even before this current situation developed, despite having built up a very large war chest. So I guess whatever the economic situation you will feel the same ?

Yes, I was/am anxious for exactly the scenario that has played out, high inflation & low equity growth. Don't think my anxiety about this will ever change, however I think I have made the right decision to continue with work for now

[Deleted User]

SouthCoastBoy said:

Albermarle said:

SouthCoastBoy said:

 bostonerimus said:

My observation is that quite a few people answering have DB pensions, that begs the question of why more without DB's aren't answering...maybe it's too scary to think about, and that SP is a critical part of everyone's plan which makes the Hunt/Sunak Fiscal statement all the more nerve wracking.

I'm 100% dc and from my perspective I will most probably continue working rather than retire early. It was interesting reading comments of db increases on some pensions being restricted to 2.5% or 5%. That is not dissimilar to holding cash in current climate I am now getting over 4% on 12 month fixed term bonds

If I remember correctly you were anxious about retiring early even before this current situation developed, despite having built up a very large war chest. So I guess whatever the economic situation you will feel the same ?

Yes, I was/am anxious for exactly the scenario that has played out, high inflation & low equity growth. Don't think my anxiety about this will ever change, however I think I have made the right decision to continue with work for now

I agree. We are playing out one of the worst scenarios if inflation sticks. Much more onerous to retirees than anything we’ve seen. 

SouthCoastBoy

I think inflation is going to stick around for longer than BOE expect. BoE have been pretty poor with their forecasts so far, not sure if it is more in hope rather than judgement.

This their current assessment,
Prices have risen by 10.1% compared to a year ago. That is well above our 2% target. We expect the rate of inflation to peak at 11% in October and then remain above 10% for a few months before starting to come down. 

bostonerimus

Deleted_User said:

bostonerimus said:

pensionpawn said:

arnoldy said:

As someone who had his University tuition paid by the state, I'm astonished that governments have got away with putting an extra 9% on young people's income tax.

Perhaps the fair way out would be to merge income tax and national insurance (and abolish student loan repayments)?  This would mean retired people would essentially pay NI on their pensions.

A hard one to sell though.

Too many people go to university to study "degrees" in non-subjects like Golf Studies or Cake Decoration. They never earn the threshold to pay the 9%. They should lower the threshold to the personal allowance £12,570. That would concentrate minds.

 

Precisely. I studied Electrical & Electronic engineering in the 1980's. It was also the "thin sandwich" variant as I was sponsored (an undergraduate apprentice) so I studied Oct - Mar and worked Apr - Sep for 3 years with my 4th year entirely at university. Since graduating I believe that my level of income tax has repaid my "student" loans many times with interest. Blair conned so many young people into believing that any degree is worth studying and made all tax payers pay for them (when the loans are wiped out). Not all degrees are equal and some are worth more to society than others. However that's for another thread..

I did physics in the early 80s and still feel that education should be available without direct tuition costs to the student. I come from a modest background and was grateful for my university grant as it allowed be to work hard at my degrees and fulfill myself. Unfortunately the UK hasn't got much of that back in taxes as the lack of good of opportunities in late 80s UK for PhD. physicists resulted in me moving overseas and paying hundreds of thousands in tax to the USA.

I'm also grateful for all the calculus and statistics I learned as it gave me the facility to understand that problem of retirement and come up with a solution matched to my particular circumstances and wishes.

It is available. Poor people get financial help. On the other hand, I am not sure why a poor corner shop vendor should be subsidizing university students with a bunch of DB pensions and other assets in their future.  Does not seem fair.  Also, I noticed that some students don’t value the “free” education and waste their time at university.  Appreciated more when they have to pay. 

I can't agree with that. I think people should have access to fee at point of service education, just like the NHS. Everyone pays for it through taxation because it is a major engine for economic growth and a civil society.