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

bostonerimus

SouthCoastBoy said:

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. 

Well all the QE of recent years is coming home to roost along with high energy prices. One positive I can see is maybe people will be more energy efficient and it might strengthen community bonds as we look for more collective solutions to spread costs; things like community meals, carpooling, local energy schemes. Ways for us to pool resources to reduce our individual costs.

[Deleted User]

bostonerimus said:

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.

Assume you mean “no fee”. Reminds me line of argument from the “Middle Class Rip-off” episode in Yes, Minister. Suggests plumbers, electricians and truck drivers aren’t contributing as much as social “sciences” professors. 

NannaH

I do believe that people like my Daughter, who is now into her 10th year of Maths teaching,  should have their student loans written off,  partly to incentivise staying in Teaching at a time when they are leaving in droves. 

Ten years is a fair timescale,  she has paid back a fair whack.  She was very lucky to get a STEM bursary for her PGCE but still had to fund her Maths degree. 

[Deleted User]

NannaH said:

I do believe that people like my Daughter, who is now into her 10th year of Maths teaching,  should have their student loans written off,  partly to incentivise staying in Teaching at a time when they are leaving in droves. 

Ten years is a fair timescale,  she has paid back a fair whack.  She was very lucky to get a STEM bursary for her PGCE but still had to fund her Maths degree. 

Quite. For any profession with shortages it makes sense to incentivize training and education on the condition that individuals either spend a certain number of years working in the field within the country or repay the funding. 

pensionpawn

bostonerimus said:

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.

Everyone has access to free education prior to turning 19. You can leave school with good A level grades in Maths and the sciences and walk into a good job. Both my eldest two did that and with their boyfriends were home owners by 23. As mentioned previously you don't need a university education for most careers. The police force has just been made a graduate-only career. Really? On the job training yes, however writing essays rather than just demonstrating that you're competent in the job? Certain careers (e.g. medical, engineering, science to name but a few) need university level education and I believe should be free at point of entry (as we are crying out for such skills in this country), however if after graduating an individual decides to seek their fortune in another country they will be exposed to a time based fees repayment clause. Those who wish to study courses that are "less in demand by employers" should self fund and not expect the self employed, pensioners or engineering, medicine (etc) graduates to subsidise them.

OldScientist

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.

Apologies to the OP since this is a bit off topic!

The degree in Golf course management at the University of Birmingham appears to be run in conjunction with the PGA, so the governing and professional body appears to want the academic rigour of a degree (I don't have enough knowledge of the subject area to know whether this is deserved or not).

Interesting overlaps in engineering between degrees, apprenticeships, and diplomas of various sorts. It is also a profession where the different roles and the routes to end up in them are very well defined (e.g. EngTech or CEng etc.) and where experience and professional development is taken very seriously (so people can move between these roles). In my experience (I was a lecturer in a university engineering department), while many students want to go into design jobs, most actually end up in maintenance and development jobs (because there are far more of those), so there may be some degree holders looking after your plane.

Albermarle

Deleted_User said:

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. 

Thanks for the scary comments . I suppose it is Halloween tomorrow 

kinger101

pensionpawn said:

bostonerimus said:

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.

Everyone has access to free education prior to turning 19. You can leave school with good A level grades in Maths and the sciences and walk into a good job. Both my eldest two did that and with their boyfriends were home owners by 23. As mentioned previously you don't need a university education for most careers. The police force has just been made a graduate-only career. Really? On the job training yes, however writing essays rather than just demonstrating that you're competent in the job? Certain careers (e.g. medical, engineering, science to name but a few) need university level education and I believe should be free at point of entry (as we are crying out for such skills in this country), however if after graduating an individual decides to seek their fortune in another country they will be exposed to a time based fees repayment clause. Those who wish to study courses that are "less in demand by employers" should self fund and not expect the self employed, pensioners or engineering, medicine (etc) graduates to subsidise them.

I suspect we are a net importer of qualified people, particularly within the NHS.  While I agree with the principle that vocational qualifications ought to meet industry demand, I can't see the benefit of a system which restricts movement of people.

If we want to retain people, then the UK needs to be an attractive place to work.  I'd say it mostly is.  

[Deleted User]

Albermarle said:

Deleted_User said:

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. 

Thanks for the scary comments . I suppose it is Halloween tomorrow 

There are 4 major risk categories which can permanently damage our plans:
- inflation
- deflation 
- confiscation (including punitive taxation)
- devastation
The first of these is playing out… The good news is that its probably the least damaging and the easiest to insure against. 

jim8888

I'm a bit late to this post, but it's good to know I'm not the only one wondering if all the "fire" advice about SWR's, passive indexing and the rest has been somewhat of a house of cards?! I'm relying on DC pots at the moment and trying to keep my monthly budgets as stable as possible (helped massively by not having a big mortgage). I quite like a bit of "belt pulling" but I'm hoping inflation will drop back to under 5% soon. For me, no doubt like everyone else, petrol and energy costs have been the things that have really taken off in terms of what I budgeted versus what I'm spending. I now monitor them very closely! I haven't changed my investments, most of which sit in a Vanguard 80/20 LS fund, but last year I did cash in two years of annual expenses to live off out of our DC pension pots. Whether things will be better or worse in two years, who knows, but I try to reassure myself that in five years surely things will be levelled out and that this period will be seen as one of those blips on an upward trending investment growth line!