Almost nobody in my workplace invests in the stock market for their retirement, it's insane.

fuzzzzy

[Deleted User] said:

fuzzzzy said:

[Deleted User] said:

It just seems like not enough people are being financially responsible and taking steps to ensure they have a comfortable retirement. I absolutely promise you when you're 65 and freezing cold in your home because you can't afford to put the heating on, eating from food banks and having no money to do anything, you'll totally regret not being frugal and investing for your future. 

I absolutely promise you that if in mid-life you ever find yourself in a hospital bed being told your condition could be life threatening you'll totally regret having been frugal.

No-one knows what the future holds for them and so it is also about having a balanced approach. Save a bit, invest a bit, live a bit.

But statistically speaking, the chances of that happening are lower than the chances of it not happening. So you'd rather chose to live your life based on the assumption that the less likely outcome will happen? How does that make sense? 

The average age of death is 82, yes some people die at 40 and some people die at 100 but the average is 82. Therefore one should plan to live to that age. That means having enough money to sustain you to that age, and ideally beyond.

The thought of being too old to work and having no money so I'm cold in my damp home everyday due to lack of heating, hungry, living in poverty, terrified of every little price rise, anxious about whether I'll freeze to death in my home while managing 1 meal a day because that's all I have terrifies me far more than the thought that I'll regret not blowing my pay check every month, going on 4 holidays a year, buying the latest iphone every 2 years etc ever would.

I'm still convinced that the people who are capable of saving by don't have the mindset that "It'll be alright, I'll figure it out." I think they're going to be in for a major reality check once they hit their 60's and realise they messed up financially.

Sorry I just found your thread title a bit alarmist and your tone rather arrogant which is why I mirrored it. But I stand by what I said as that was my experience.

I agree that there will be lots of people who find themselves in later life regretting they did not save for their retirement, but I also that think it is possible to be too frugal and there will be other people who in later life find themselves wishing they had lived a little more. That is why I was advocating a balanced approach.

[Deleted User]

fuzzzzy said:

[Deleted User] said:

fuzzzzy said:

[Deleted User] said:

It just seems like not enough people are being financially responsible and taking steps to ensure they have a comfortable retirement. I absolutely promise you when you're 65 and freezing cold in your home because you can't afford to put the heating on, eating from food banks and having no money to do anything, you'll totally regret not being frugal and investing for your future. 

I absolutely promise you that if in mid-life you ever find yourself in a hospital bed being told your condition could be life threatening you'll totally regret having been frugal.

No-one knows what the future holds for them and so it is also about having a balanced approach. Save a bit, invest a bit, live a bit.

But statistically speaking, the chances of that happening are lower than the chances of it not happening. So you'd rather chose to live your life based on the assumption that the less likely outcome will happen? How does that make sense? 

The average age of death is 82, yes some people die at 40 and some people die at 100 but the average is 82. Therefore one should plan to live to that age. That means having enough money to sustain you to that age, and ideally beyond.

The thought of being too old to work and having no money so I'm cold in my damp home everyday due to lack of heating, hungry, living in poverty, terrified of every little price rise, anxious about whether I'll freeze to death in my home while managing 1 meal a day because that's all I have terrifies me far more than the thought that I'll regret not blowing my pay check every month, going on 4 holidays a year, buying the latest iphone every 2 years etc ever would.

I'm still convinced that the people who are capable of saving by don't have the mindset that "It'll be alright, I'll figure it out." I think they're going to be in for a major reality check once they hit their 60's and realise they messed up financially.

Sorry I just found your thread title a bit alarmist and your tone rather arrogant which is why I mirrored it. But I stand by what I said as that was my experience.

I agree that there will be lots of people who find themselves in later life regretting they did not save for their retirement, but I also that think it is possible to be too frugal and there will be other people who in later life find themselves wishing they had lived a little more. That is why I was advocating a balanced approach.

This is a valid argument but why does it have to be one or the other? Why does it have to be spending every pay check without saving anything vs living like a hermit not spending a penny? 

It's a balance, you can certainly do both. For example saving just £100 a month from age 20 to 60 would be approximately £400,000 (based on historical returns).

Then on top of that you'll have your private pension and on top of that you'd have your state pension once you reach the age. That is a very healthy comfortable retirement, dare I even say luxurious... Heating on 24/7 in winter, holidays with the grandkids, personal holidays with the mrs / mr, eating out at restaurants, taking up new hobbies etc. 

All at the sacrifice of just £100 per month, or £3.30 per day. Seems like such a no brainer to me I genuinely find it hard to believe that so many people (in my place of work) don't think the £100 a month is a worthwhile price to pay.

QrizB

[Deleted User] said:

It's a balance, you can certainly do both. For example saving just £100 a month from age 20 to 60 would be approximately £400,000 (based on historical returns).

Auto enrollment is 5% from the employee, 3% from the employer. For someone on minimum wage of £11.44ph working a 40hr week, that's a total of £36.60 a week, almost £160 a month.

Which by those calcs would give a pension pot of £640k, with which a 65yo could currently buy an index-linked annuity of £31k a year.

Which would mean (allowing for state pension) you'd have almost double the income in retirement than the £24k you have had for the previous 40 years of employment.

If you've got a cheapskate employer who only pays their 3% on earnings in excess of £12570 a year, you'll only have £500k for a £24k annuity, which still puts you ahead.

(I know there hasn't been 40 years of NMW, and the next 40 years of investment performance might be very different. And we might all be wiped out by an asteroid tomorrow. The principle holds, though.)

Archerychick

[Deleted User] said:

I work in a slightly below average pay job and I've probably spoken to about 20 out of the 30 colleagues about investing, just to gauge how common it is among "regular" people. 

And literally not one person I spoke to said they invest in the stock market, even when I asked about the workplace pension, about half of them said they opted out because "money now is better than money when I'm dead" which is just silly because the average life expectancy in the UK is 82... So what are they going to do to get by until they die? The state pension only? Yeah good luck with that.

One guy I spoke to who was in his mid 20's said he saves some money but in a savings account with a bank. I asked him what the interest rate was and he didn't even know... So probably like 1.5% if it's a regular high street bank which I suspect it is. I didn't have the heart to tell him he's actually losing money to inflation, not saving it... 

It just seems like not enough people are being financially responsible and taking steps to ensure they have a comfortable retirement. I absolutely promise you when you're 65 and freezing cold in your home because you can't afford to put the heating on, eating from food banks and having no money to do anything, you'll totally regret not being frugal and investing for your future. 

I think too many people live in the here and now without a seconds thought for the future. I understand that money is tight for many people but surely you can put a little bit away each month to supplement your pension when you're old?

I think financial education should be mandatory in schools with students being shown videos of old people living in poverty because they didn't invest in their retirements.

I am now mid 40’s and agree with you. But, I remember my 20’s, when by comparison to what I earnt and it cost to live it was easier than it is today - even then I didn’t have any savings, let alone a pension - every penny I earnt went into my bills, so that I could afford to have the life essentials and a social life. 

If I could have told my self back then what I know now, would that have had any impact? No, I have no regrets to not starting a pension until my 30’s. Why? The alternative would have been missing out on seeing friends or affording to heat my home or eat.

I could not imagine being in my 20’s now and I can see that for a lot of people they do need the money today. 

Archerychick

All at the sacrifice of just £100 per month, or £3.30 per day. Seems like such a no brainer to me I genuinely find it hard to believe that so many people (in my place of work) don't think the £100 a month is a worthwhile price to pay.

I guess because £100 might mean they then can’t heat their homes - that would be a pretty horrible existence. There are a lot of people who are living on the bread line, more than when we were younger 

OldScientist

[Deleted User] said:

This is a valid argument but why does it have to be one or the other? Why does it have to be spending every pay check without saving anything vs living like a hermit not spending a penny? 

It's a balance, you can certainly do both. For example saving just £100 a month from age 20 to 60 would be approximately £400,000 (based on historical returns).

Then on top of that you'll have your private pension and on top of that you'd have your state pension once you reach the age. That is a very healthy comfortable retirement, dare I even say luxurious... Heating on 24/7 in winter, holidays with the grandkids, personal holidays with the mrs / mr, eating out at restaurants, taking up new hobbies etc. 

All at the sacrifice of just £100 per month, or £3.30 per day. Seems like such a no brainer to me I genuinely find it hard to believe that so many people (in my place of work) don't think the £100 a month is a worthwhile price to pay.

A quick calculation with a £1200 contribution per year and 9% growth leads to about £400k at 60yo. This looks like average nominal equity growth, so the pot would be affected by inflation (and assert allocation). Since future real growth is unknown, a few values can be tested, at 0% the amount would be £48k, 2% real would give £72k, 4% real about £110k, and 6% real about £180k (this also assumes that the £1200 per year is index linked too).

surreysaver

It's up to other people. I'm in a better financial position than my peers, due to a combination of judgement, luck and hard work.  Due to this I don't have to work as much as them now.
If people don't want to invest, that's up to them. If they don't understand it, it's probably wise. I wouldn't do something with my money I don't understand.
It's probably partly down to education, culture, other things more important in life taking precedence and a myriad of other reasons.
There may be things they are doing in their lives which I ought to be doing, but am not. 
The current climate drums into people about scams too, so they are probably even more wary

Altior

Archerychick said:

All at the sacrifice of just £100 per month, or £3.30 per day. Seems like such a no brainer to me I genuinely find it hard to believe that so many people (in my place of work) don't think the £100 a month is a worthwhile price to pay.

I guess because £100 might mean they then can’t heat their homes - that would be a pretty horrible existence. There are a lot of people who are living on the bread line, more than when we were younger 

Out of interest, what's that claim based on? What time period/point of reference does 'when we were younger' draw upon.

My instinct is what a lot of people consider the 'bread line' is significantly different to what it was many years ago. I was born in the 70s, so I just about reach back to the winter of discontent in my living memory. My Dad's family had a tin bath, filled once a day with hot water from a kettle, the family shared the same bathwater. He was born in the 40s. 

surreysaver

Altior said:

Archerychick said:

All at the sacrifice of just £100 per month, or £3.30 per day. Seems like such a no brainer to me I genuinely find it hard to believe that so many people (in my place of work) don't think the £100 a month is a worthwhile price to pay.

I guess because £100 might mean they then can’t heat their homes - that would be a pretty horrible existence. There are a lot of people who are living on the bread line, more than when we were younger 

Out of interest, what's that claim based on? What time period/point of reference does 'when we were younger' draw upon.

My instinct is what a lot of people consider the 'bread line' is significantly different to what it was many years ago. I was born is the 70s, so I just about reach back to the winter of discontent in my living memory. My Dad's family had a tin bath, filled once a day with hot water from a kettle, the family shared the same bathwater. He was born in the 40s. 

I was born in the 70s. We didn't have a phone. We had one telly (and it was owned rather than hired like a lot of families). We didn't have a freezer. No central heating.
And I believed we considered ourselves well off.
People these days don't know they're born 

DRS1

surreysaver said:

Altior said:

Archerychick said:

All at the sacrifice of just £100 per month, or £3.30 per day. Seems like such a no brainer to me I genuinely find it hard to believe that so many people (in my place of work) don't think the £100 a month is a worthwhile price to pay.

I guess because £100 might mean they then can’t heat their homes - that would be a pretty horrible existence. There are a lot of people who are living on the bread line, more than when we were younger 

Out of interest, what's that claim based on? What time period/point of reference does 'when we were younger' draw upon.

My instinct is what a lot of people consider the 'bread line' is significantly different to what it was many years ago. I was born is the 70s, so I just about reach back to the winter of discontent in my living memory. My Dad's family had a tin bath, filled once a day with hot water from a kettle, the family shared the same bathwater. He was born in the 40s. 

I was born in the 70s. We didn't have a phone. We had one telly (and it was owned rather than hired like a lot of families). We didn't have a freezer. No central heating.
And I believed we considered ourselves well off.
People these days don't know they're born 

I am reminded of a comedy sketch involving a shoe - Monty Python?

Anyway I was born in the 60s and at my first home if you wanted to go to the loo you had to go to the end of the yard and use the outside toilet.

I think I still have a box of candles we didn't use up during Mr Heath's 3 day week.  You never know when you might need them again.