To shrug and say "Er, so?" when I read: "Half of UK not saving enough for retirement, says study"

[fgaaagh]

AIBU to wonder where we're meant to get the money to pay into a pension, alongside all the other pressures on the family finances? (normal household costs, commuting costs, mortgage, council tax, helping out my own parents, topping up my NI contributions from being a SAHM cos we couldn't afford childcare to eat up my wages and more on top, and, finally, possibly saving for kids tuition fees or a small amount for a first house in the unlikely event anything is spare and left over).

Seriously - I've just read this headline online, and I don't get why the government / media try to make out in their articles that people don't care enough to plan for retirement to any meaningful level.

I wonder how many cases, of the current section of society who are middle aged - what reasons will make up proportion of those not saving "enough"?

1. Igorance (didn't know the govt pension wouldn't be enough)
   
2. Apathy (who cares about retirement, live for today)
   
3. Arrogance (I'll be fine, I'll find a way)
   
4. Inability (can't afford to)
   

Personally, I'm betting that if we could zip forward 50 years and speak to the people currently in their 30s / 40s, the answer would be mostly made up of Number 4s. Amongst my friends and relatives, it's certainly the case.

So AIBU to not give rat's arse about what the government or any advisory body thinks about your Average Jane saving for retirement? Because it's not like we can really do that much about it, is there? There have been warnings for years telling people to save more for retirement, we're certainly more aware than the people who are retiring now were at our age.

Ho hum!

[ssd]

we can't save for retirement

dh is on £20k where are we meant to save the extra from that?

and I'm on minimum wage

its just not possible just now

[fgaaagh]

Quote "Ian Naismith of Scottish Widows said: "Put simply, people need to save an extra £58 per month on average to prepare adequately for retirement and make up the shortfall we are seeing currently. That is roughly the cost of a cup of coffee every day.

"Even though for many this is realistic, and is in under the average £97.10 per month people say they can afford, we appreciate the difficulty in setting aside extra money. It's about breaking through that inertia. "

ssd, you just need to break through that inertia. See?

[fivegomadindorset]

4

[ssd]

but something about your post makes me go

even mentioning you might save for kids tuition fees shows you aren't skint

[fgaaagh]

Well that's the theory. If they ever wanted to go to uni or buy a house.

Does the kid's penny jar count as a tuition fee fund?

(In all seriousness, I am getting worried that the oldest is 13 and we have bugger all to help him, short of the few hundred quid GPs have in their name in a bank.)

[purits]

You forgot:

1. Can see no incentive to be prudent and save for old age when means-testing punishes you for it. Might as well enjoy the money now, and then call on the State's sympathy when the time comes.

[saffy85]

YANBU if I had something to save then I would. But I don't. Shit happens. I have no choice but to worry about it when the time comes.

[Hammy02]

I have always put money aside for my pension despite never earning very much and never the average UK wage but am now wary that I'll be penalised and have to bail out people that haven't saved as seems to be the case with lots of thing in this country. I haven't lived a glam lifestyle, just found savings elsewhere, eg, house-shared when young rather than having own flat etc.

[TrillianAstra]

You don't need to pay for your children to go to university.

They pay for it themselves, after they have been, once they are earning over £21k.

All of this "cup of coffee a day" nonsense - it's like reading silly women's magazines giving tips on saving money. Anyone who actually buys themselves a cup of Starbucks every day can clearly afford to save for retirement.

[shakey1500]

Agree purits

[GetOrf]

I have never been that fussed about saving for retirement. I have several properties (1 owned outright, 2 mortgaged) properties though which I suppose you could call a pension plan.

I don't save for dd - she can make her own way in life as I have. It will do her good.

I have just this month started a pension, I joined a company with a final-salary one, seemed stupid not to. It doesn't cost that much a month, Idon't miss it.

I don't think there will be a retirement age by the time I get there - I think it will be work until you drop. I would much rather keep on working and keep my brain moving (easy for me to say that at 33 mind, I may feel differently in 35 years time!)

[catwhiskers10]

Retirement does worry me and I'm not yet 30! I worry that there will be no state pension by the time I come to retire and that my years as a SAHM and low wage earner when i was working will count against me if there is a state pension.
DH has a private pension but even by today's standards it wouldn't provide enough for both of us to live on, so heaven knows what the situation will be when we do reach retirement age.
I also wonder what is going to happen to all the people who have never worked a day in their lives (through choice rather than circumstance) will they be provided for while people who have worked and contributed to the system for 50+ years have to struggle?
The way things are going it seems there may be no retirement for those who can't afford to save enough.
In today's money even if you had £100'000 in savings would you be able to retire at say 65 and have a comfortable life for possibly the next 20 years living on your savings alone?

[GrimmaTheNome]

All of this "cup of coffee a day" nonsense - it's like reading silly women's magazines giving tips on saving money. Anyone who actually buys themselves a cup of Starbucks every day can clearly afford to save for retirement.

Up to a point. Anyone who does breakfast at Starbucks or lunch at Pret on a regular basis but who doesn't save is a feckless fool.

Being of the type who takes a flask and sarnies and does save, when I'm having to pay tax on those savings I want it to go to the people who really couldn't save, not those who could have but chose not to. 'The State's sympathy' is other peoples taxes, not some magic money pot.

[CogitoErgoSometimes]

YABU. Can't think of anything more precarious than relying on some government to finance my old age. For anyone who is saving, investing or contributing to a pension reports like this are a wake-up call to check what's going in and what you're likely to get back. Anyone who could afford to save something but isn't doing so might start thinking about it. Anyone who can't afford to save for old age, they're no worse off. The population is ageing relative to the proportion of people working age and, unless we keep this issue live, taxes will have to increase accordingly.

[Alibabaandthe80nappies]

I would put saving for retirement ahead of saving for university/houses for your kids.

Otherwise you will be a burden on them in retirement.

It doesn't have to be a pension that you can't touch if times get really hard, even putting some into an ISA that will build up and attract no tax is better than nothing.
You really do have to have very little to qualify for anything means tested.

Euphemia - the lack of 'jobs for life' is a big problem I think. DH has changed jobs several times over the last 5 years and while they have all had good pension schemes with employer contributions, his pension pot is now spread about all over the place. He's in the process of changing company again atm, but if he is settled and happy there in a year's time then we are going to gather them all up.

[GetOrf]

I agree that I would put buying houses or pensions or investments for YOURSELF are far more important than saving for a uni education/savings for children.

[Alibabaandthe80nappies]

Completely agree Grimma. You have to be disciplined about it, unless you are really earning pots and pots. I have always put 25% of any payrise into pension and another 25% into long-term savings. If you aren't used to having it to spend then you don't miss it.

[GrimmaTheNome]

Ali is right. Also, (unless you're a higher rate tax payer ) personal pensions aren't necessarily a very good deal. You have to be very careful not to be raped for fees, and then apparently you get stung again at the end when you purchase an annuity. Index linked National Savings (when there's an issue available) are always worth considering.

[jcscot]

We know we're lucky that we have good pension provision. The husband is in a non-contributory final salary scheme and he has a small (c £50 per month) private pension as a top up. I have a larger private pension (c £150) per month.

My husband is eligible to retire in three years (at which point his pension will pay out until he dies). He'll be 41ish and able to start a new career and build a new pension.

We also save for our three children and we've often resisted luxuries in order to put savings behind us. I appreciate that this isn't possible for everyone, but I do think that we shoul all take a good look at our finances to see if we are saving adequately for the future.

[purits]

"The husband is in a non-contributory final salary scheme My husband is eligible to retire in three years (at which point his pension will pay out until he dies). He'll be 41ish"

I'm guessing that he is State employed. It is ridiculous to pay a pension at age 41. He may not be able to do that particular job any more but he can find another (as you say yourself)

[meditrina]

The state pension - even if the IDS plan for the new universal one comes off - isn't much to live on, and the age at which you can draw it will creep inexorably higher. If you are OK with that level of income in retirement, then yes, by all means shrug.

Otherwise, it has to be ruthless prioritisation.

Your choice - you'll be the ones living with the consequences.

[MoreBeta]

YANBU. In fact I think the advice to save for a pension is absolutely wrong advice unless a person has no debts of any kind.

For most typical low and middle income families with credit cards, car loans, overdrafts saving for a pension is bad advice because the interest on their other debts will far outweigh the investment income accumulating in their pension fund. They should focus on paying down their debts.

I agree lack of money is the main reason people are not saving for a pension. I also agree with purits that means testing has undermined the incentive to save for a pension. Finally, I would add the apalling investment peformance and fees levied by the pension industry means anyone who has bothered to save for a pesnion would have been far better off to just stick the money in National Savings Index Linked Bonds with no risk and no fees.

I manage money for a living and my firm advice is do not save for a pension unless it is public sector pension funded by your employer and guaranteed by the Govt or a fully funded non contributory scheme.

Don't ever put your own money into a private pension. Instead, focus on paying off any debt you have by using any spare money you have, then save 6 months salary in National Savings against a rainy day, then put the full ISA allowance in a simple FTSE 100 stock market tracker fund with the lowest annual fees you can find and that means fees of 0.5% or less.

There are very good reasons why people are rationally choosing not to save for a pension and inertia is not one of them. Of course the investment management and penson industry needs people to save for a pension in order to generate fees.

[GetOrf]

Beta always gives good advice I find.

I agree with the insantiy of having savings if you have debts. Thankfully I don't have any credit cards or personal debt, and never buy anything on credit.

I have an old banger car at the moment (I am tempted to get a new lease care though) , a crap old TV and laptop and pretty basic furniture, but I don't see the point in having a stonking credit card bill to pay albeit nice stuff.

[Ooopsadaisy]

I am 42 and have no pension.

If that is reckless and irresponsible then I guess I'll regret it later.

I do have a couple of grand in an ISA and we will own our house in a few years.