Have you saved enough money for your retirement?

[bhafc99]

I feel cheated by my pension, big time.

Like a good citizen, I took one out when I was 21 and left Uni to start work. I've dutifully paid into it ever since. But the charges and performance are crap beyond belief.

After 15 years, the amount in the pot is STILL less than what I've actually contributed – roughly speaking, I've put in £30k, yet my pension is 'worth' £26k. f***ing great, huh.

In other words, I'd have been better off putting the cash under the mattress.

So this year I decided to swop pension provider to one rated highly by the financial press. I did all the research, worked out what I wanted to do, did all the forms etc, chased all the stages through... and was charged another £1500 by an IFA who basically did nothing whatsoever at all, but whom the law says has to be part of the process.

So now I'm even worse off.

I've spent my entire working life doing exactly what the govt wants us all to do – save huge chunks of our income into a personal pension – and frankly I might as well not bothered. The amount I've been left with after the rip-offs and shoddy returns render it effectively worthless.

 

[Uncle Spielberg]

My pension planning advice is live fast, drink loads, smoke, spend all your money, enjoy yourself and live to 64 ( or 69 ).

Does that help ?.

 

[Dave the OAP]

The mortage finishes in three odd years time, so we will be able to put more £ into the company scheme.

At the moment, I pay 5% of my gross into the scheme and the company pays something like 8.5%. It is NOT final salary

The trouble is you cannot get a straight answer to how much you will be able to draw in a pension. They give you projections, but we were seriously missold some Endowmant Policies, which we had to cash in or we would be in the sh1t, there fore I do not trust any financial advisors at all.

I was thinking of buying property overseas, but unless you have the money to run it and visit it, ie from a pension, then there is no point anyway.

One other problem I have is my company retires people off at 60!

 

[Lord Bracknell]

At age 40 with no pension provision you need to put in around 20% of your net income each month into a pension to get less than half your equivalent salary at age 65.

I you worked in local government and only started making pension contributions at age 40, you'd get less than a third of your final salary at age 65.

Don't put it about that every public sector worker retires on half salary. It's simply not true.

 

[Meade's Ball]

With any luck, i'll be dead soon.
Or, i'll be a successful novelist writing into his 100s.

Either will do me fine.

 

[Uncle Spielberg]

Hang about Lord. I did qualify it as below

1/80th per year worked. Therefore to get 50% you need to work 40 years. Your 25 years service would get 25/80th or 31.25% but you would be entitled to tax free cash on top.

 

[Dave the OAP]

although one thing to remember is that you will not require 100% of your current salary anyway.

Hopefully most people will have no mortgage or debts when they retire, therefore any income you get will be for general living and holidays.

 

[Hungry Joe.]

Look get silly if you want but people in the public sector get a pretty damn good pension which is guaranteed and not subject to the stock market where prices may plummet as well as fall.

Gareth, read or re-read LB's post on artificialy low wages and do the maths. The only person getting silly on this thread is you. I'm not saying that compared to other pension schemes/options public sector workers get a disproportionately raw deal but we don't get the basic income for a decent standard of living in the first place. At my current rate of salary increase (if I don't get laid off in the meantime) I'll be lucky to make £30k by the time I retire and I'd have to have a huge lump sum and guaranteed pension to make up for it.

 

[tedebear]

our retirement money is in our house - we put as much as we can into our mortgage and when we can we will use it to buy a place that we can retire on the rent from, if it works that way still. Any pension money will be a bonus....I've always believed in real estate...

My Dad is one of the lucky ones in Australia - he was part of a very old teachers federation that gave him the option of retiring on full wage or taking a part lump sum and then the remainder as a monthly wage - needless to say the state government canned the scheme in the late 80's but as it was part of Dad's contract he still got it.... lucky!!

 

[Uncle Spielberg]

The problem for the pensions crisis is as below as it not the sole blame of the " commission hungry salesman " as the Daily Express would always have you believe.

1. Badly trained advisors or frankly Cowboys who sold personal pensions in the last 80's early 90's and opted people out of company schemes. The industry was not regulated and the companies encouraged all this.
2. The government ran adverts on tele telling people they could opt out of a company scheme into a private pension in the late 80's.
3. The stock market has been dead for about 5 years, a huge amount of time, 9/11 undermined the financial sector hugely
4. Gordon Brown decided 5 years ago to dip his hand in pension pots and robs £ 5 000 000 000 a year from them.
5. People are living longer and there is not enough money in the pot

 

[Lammy]

I think a major factor is University. Most people go to university these days. Which means that not only are you in a less financially sound position to contribute to a pension due to loans. You are also starting a pension a LOT later than a school leaver at 18. It would be nice if the government could some how fill that gap for us!

 

[Titanic]

I am fortunate to be in a final salary / defined benefits scheme. My pension is acting as a pair of 'golden handcuffs' which I resent - but, obviously I am very fortunate to have it (unless the buggers change the rules / close the scheme / go bust etc... all of which seem possible!!) but it's not all good news.

I can understand the move to 'money purchase' schemes, to maintain flexibility and choice for both the employer and employee, but in todays investment market they seem to be a bit of a nightmare in terms of building a decent pot of money to buy an annuity or whatever when you retire.

On top of this - a large proportion of our mortgage is 'interest only' so somehow we will need to find £100k to buy the rest of our house - or sell up and 'downsize', which is more likely.

So many decisions that were made years ago now have a major impact on our future security... and more that are out of our hands will effect it in future too.

It is truly a minefield - and I don't envy anyone starting out on this road now.

 

[Deano's Right Foot]

It was all looking quite good until a couple of years ago.

Bloody Equitable

 

[Titanic]

I think a major factor is University...

The combination of time spent at university, student debts and high house prices are a recipe for disaster for the next generation!

I don't envy my children at all.

 

[Uncle Spielberg]

More and more people are opting out of the traditional, put £ 100 pm into a personal pension and looking to property and buy to let protfolios to provide their pension at age 65/70. If the yield after mortgage payments, agents fees and costs which can all be offset is 5% or more, its better than an annuity will give you. Also the properties can be sold at anytime and the cash is all yours subject to 40% Captial gains tax if applicable.

People don;t like paying into a pension for 40 years, only being allowed to take 25% off their cash at retirement and maybe drawing a pension for a year before they die. Unless they make these plans more flexible people aint going to buy them anymore.

My advise is to build up a buy to let portfolio in somewhere like Hull where there is a thriving and ever available student rental population and you can still get a 3 bed house for £ 50k. You have not been charged for this advice.

Regards.

GG

 

[caz99]

I am fortunate to be in a final salary / defined benefits scheme. My pension is acting as a pair of 'golden handcuffs' which I resent - but, obviously I am very fortunate to have it (unless the buggers change the rules / close the scheme / go bust etc... all of which seem possible!!) but it's not all good news.

I can understand the move to 'money purchase' schemes, to maintain flexibility and choice for both the employer and employee, but in todays investment market they seem to be a bit of a nightmare in terms of building a decent pot of money to buy an annuity or whatever when you retire.

On top of this - a large proportion of our mortgage is 'interest only' so somehow we will need to find £100k to buy the rest of our house - or sell up and 'downsize', which is more likely.

So many decisions that were made years ago now have a major impact on our future security... and more that are out of our hands will effect it in future too.

It is truly a minefield - and I don't envy anyone starting out on this road now.

i am not eligble to start my company pension scheme till i am 25 even then i wont be joining as its just not worth it.

i am more concerned with trying to save a massive deposit to enable me to finally get on the housing ladder and buy a shed to live in.


it is a minefield for me personally i read things what people write and then end up worrying as to whether I am doing the right thing etc

 

[chip]

Part of the problem is that we are taxed on savings and that for the more wealthy of us it is better to find other ways of keeping it out of Bastard Browns thieving fingers. Anybody below the age of 50 who has not made adequate provision for a pension only has themselves to blame. The ones I feel sorry for are those who have saved but then have their pot stolen a al Maxwell etc.

I only think its a problem for government to sort out in terms of creating conditions that encourage saving, getting rid of compulsory annuities, remaining consistent and by protecting the most vulnernable. Raising tax will never work as it won't encourage saving but will mearly make our kids have to pay for our mistakes. A few years ago the UK was one of the best provided for in Europe, if and when the stock market recovers, the situation will look better. The damage of Browns theiving though is much harder to address and he has only wasted the money.

Rant over

 

[Simster]

I've contributed a small amount to my own private pension but also decided that relying on a pension alone is too risky anyhow. I don't trust some of the shysters in the pension trade. The Mirror Group newspaper pensioners would probably agree with me. As would my uncle, who worked for the same company for 30 years until it went bust last year, leaving him with a quarter of the pension he would otherwise have expected. Great.

I know that pensions are the most tax efficient way of saving, but there are two fundamental problems with it: a) someone else controls your money and you have limited input into it and b) you have little control over the size of annuity you can expect given that market forces pretty much dictate the size.

I will have a small pension but I am working to gain a diverse portfolio. I want a mix of property, blue chip shares, tax efficient savings (ISAs and the likes) and a small pension. Oh, and I plan to retire at 70, not 60 or 65 which is why I try and keep myself in reasonable shape and health. Too many people are deluded if they think they can afford to retire at 60.

 

[Mr Popkins]

the way i see it is , live now! im 29 and have no pension, ive been told that if i start paying in now it would cost me £150 a month!

I have recently got a mortgage and am stretched to pay that!
I could afford to pay into a pension but it would mean no social life whatsoever!. I would much rather take my chances now ,enjoy life. than find I get to 65 or not!, and find im too infirm to do anything!

I will have paid off my mortgage (hopefully) when im 53, giving me 8 years worth of investing in something.

Also dont forget most peoples parents have houses which will be left to most at some point when their older.


Pensions are for Sad people!

 

[fatboy]

What happens to the pensions of people who die before 65? There must be a fair few of them.