The argument against "Dont bother saving for retirement, just claim pension credit"

NedS

hugheskevi said:

The main things I would be considering/concerned about are:

1. Gambling on a future social security structure many years into the future - there will almost certainly be something, but who knows what
2. Having few - if any - options prior to State Pension age at 68, I would be committing to work until then come what may (or be sick/disabled, but that seems an even worse outcome and in such a scenario I'd probably be glad of having my own resources to tackle the situation).
   

This, combined with auto-enrolment almost ensures that Pension Credit will not exist for most as working (or claimant benefits) until 68 with auto-enrolment will almost guarantee a full state pension with an additional occupational pension thus exceeding any entitlement.

Albermarle

Im not a big fan of the idea of relying on the state for this so normally I didnt put much thinking into strict planning, just did my contributions thinking its the right thing to do. But do they have a point that the effort isnt worth it?

As a previous poster mentioned, under current rules, having a small retirement pot/pension can work against you, as you can lose benefits.

However with your current level of pension contributions from a higher than average salary, you will be in a different league.

One important point not mentioned so far, is that you will most likely be able to retire early, whilst the 'spend it all now' brigade, will have to work probably until they are 70. When you retire 10 years earlier than that, they will be very jealous/envious.

GibbsRule_No3.

When I started work in 1971 my employer came under Civil Service rules, so I was automatically enrolled in the pension scheme, no choice and was always told the reason our pay was not the same as non CS equivalent jobs was due to the pension subs being paid. Thus jam tomorrow. At 17 I’m not sure many people consider retirement living, so I wasn’t really aware how lucky I was going to be.  I just lived within my means.  After 22 years we were TUPEd to a different owner and enrolled in an equivalent scheme to the CS (luckily) another 21 years later and I could take the CS Pension at 60, still not at that time old enough for the State Pension due to new rules but I took the CS, continued working, then a year later took the TUPEd pension and dropped down to a three day week, enrolled into the Stakeholder Pension scheme to see me to the SP but when that came into payment Covid had struck, so I am just carrying on but with a two day week, same job as in 1971 now at 68 with two work pension, the SP and wages I have never been so well off.  Granted never had enough to buy either a house or a car, luckily don’t drink or smoke, am single and rent but I would not want to rely on Pension Credit to top anything up. None of it being my choice to begin with, but hopefully when I do finally stop work, I will at least be as comfortable as I was when working.

Relying on just the State for retirement would not be my choice, also if no one pays in who is left to pay for these pensions that people think they can rely on?

arnoldy

At the moment you need to have sufficient pension provision to be better of than those on pension credit. It is not just the pension credit ££s but all the other stuff you get. That means for maybe 20-30% of the population its not worth saving for retirement, under the CURRENT rules. But the whole thing will be increasingly unaffordable, so the chances are its worth saving even given the above. Apart from anything you can be proud of yourself for doing the right thing & getting a grip.
What is pension credit and eligibility criteria - Money Saving Expert

Takedap

Why are any of the regular posters treating this seriously?  It sounds like one of the ideas that usually come from the "noisy table" in Wetherspoons towards the end of the night.  It's up there with the other "plans" that come from the same place.  Like committing a crime so you can go to prison & benefit from the free accommodation & heating along with the 3 meals a day & no council tax.  Or going to France & coming back in a dinghy so you can live in luxury in a Government provided 5 star hotel.  Strip away the ridiculous rhetoric & five seconds of serious thinking would show how stupid it is.  I spent most of my working life in heavy industry & a common thought amongst some was "Why bother saving anything coz I'll probably die before I can retire.".   Needless to say, most of them didn't!

Kim1965

You might be onto something with that dinghy idea! 

Takedap

Kim1965 said:

You might be onto something with that dinghy idea! 

Just like all these other "ideas".  The reality would be horrendous.

Kim1965

Anybody throw Ing themselves to the mercy of the state at a time of an ever increasing population age, has to be daft. 

Getting_greyer

I want to be cutting shapes in Ibiza when I'm retired not sure pension credit will make that happen.

Kaizen917

Takedap said:

Why are any of the regular posters treating this seriously?  It sounds like one of the ideas that usually come from the "noisy table" in Wetherspoons towards the end of the night. 

I get what you are saying, and I often think on the back of my mind when someone implies that they will live financially on the edge that they are bluffing or trying to be contrarian for the sake of it. However, similar opinions can be raised by a variery of people and in different situations, and in some cases one could see them actually walk the walk in not thinking about the tomorrow.

On the flipside, I could have people agree with me that financial prudency is important just to see them give up trying soon afterwards. Mind you, I consider myself very lucky to be able to do a job that earns me decent income but if I was on a minimum wage, I imagine that would also put me to the test.