Owning a house & saving for retirement or not?

Beddie

He's a spender and you're a saver, as are most on here. Savers and spenders never understand each other, as they have different pleasure pathways. In his mind he has equated spending money with fun and enjoying life, but does not have a sense of delayed gratification.
He has also looked at retirement as a time when you are very old and might need a care home, instead of thinking you can have 25 years or more of good health in retirement if you plan it well.

mark_cycling00

My advice is to remain friends with this person all through retirement and see how it works out for him compared to your life 

I suspect your level of smugness will increase year by year.

Yorkie1

A timely news article ... 

https://inews.co.uk/inews-lifestyle/homeless-74-pension-wont-cover-rent-2987534?

reck_uk

Some interesting replies here and makes for thoughtful reading. 

Although I was interested in what he had to say it’s certainly not the way forward for me. I started paying into a private pension as soon as I left school and started my first job. 

Over the years I’ve always tried to have a certain level of savings if only for a bit of piece of mind to cover for emergencies so spend, spend, spend for me would just lead to anxiety. 

It does me wonder though that with the cost of housing now and the likelihood of more and more people renting how this is going to affect low income pensioners when part of their pension is going to have to continue to pay or rent for the rest of their lives when house buyers will have long paid off their mortgages (hopefully). 

BTW I posted on this part of the forum more for the retirement planning part rather than the pension part so hopefully the replies aren’t too biased because of that. 

penners324

Your colleague sounds extremely foolish. Living the high life now but living in poverty when they retire. Plus expecting their children to lift them out of that situation is also extremely foolish 

DoublePolaroid

reck_uk said:

If the time comes to when he may need to move into nursing home this will be paid for.

On this bit specifically, most folk tend to vastly over-estimate how easy it is to go into residential care if you’re not paying. The fact is the council will (understandably, given the state of social care funding) do everything possible to avoid placement. What this means is that there are legions of older people who are frail enough that they require more care to live comfortably than the council can provide for at home, but who are not considered needy enough for residential care. Often it falls on children to plug the care gap, if they’re in a position to do so. Many aren’t in such a position, with their own lives and families, but they do so anyway, out of a sense of duty, to the detriment of their own physical and mental health. And despite these efforts, many of these people live out their final years in varying states of misery. 

I’ll also add that there isn’t a single sane person who would walk into the average LA-funded care home and think yep, this is where I want to end my days. Which is not to say the care is poor; the carers generally do a difficult job very well. But you do get what you pay for in terms of the environment. 

People overestimate how long they will live in good health and underestimate how long they will linger. None of this of this of course will likely make any difference to the thinking of the chap described in the OP. 

Sea_Shell

Sadly, I think the gap between the spenders and the savers is going to get wider and wider, with the savers having to give more and more, to provide for the spenders later in life.  Either generally, via taxation, or privately within families.

The spenders think it's not worth saving, so they save even less than before.   Then they're then round with the hat, to the savers, once the penny drops.  

As with all things, a balance of somewhere in the middle, is probably best.    Save some, enjoy some.


It does bring up the subject of where we should be as a "society" with regards the ultimate financial responsibility towards our families, which are reduced (or eliminated) because of the welfare state that we live in, currently.

Should the "saver" in a family, step in to be the "welfare state", to assist the "spenders" in the future?   And, if so, to what extent?   Literally give the shirt off their backs, until they too have nothing?   

itsthelittlethings

It’s not just being a spender or being a saver though. If they are renting and have kids, they may not have the chance to buy a house, if they can’t save up a deposit or get a mortgage. There may be a certain element of “making the best of things”.

LHW99

Perhaps it will in the end mean autoenrollment opt-out won't be allowed, so thatanyone who works at any time is forced to build up at least a minimal additional pot, on top of SP, with only for those who are medically unable to work getting access to additional help.

daveyjp

The OP's mate needs to listen to 5live (8 April 2024 between 9 and 10) and hear from pensioners who are now living on nothing but the state pension.

It is fact that the UK has the lowest pension of any comparable country, but to counter this £70bn of tax relief is awarded against pension savings.

The UK has therefore become a place where you are expected to look after yourself in retirement and the system is now set up to enable it. Listening to those who worked through the personal pension changes but couldn't take advantage of them it is very much the case that in this day and age making a decision not to save will result in a miserable retirement unless you are prepared to work until you drop.