to think too few people worry about pensions ...(263 Posts)
Was chatting to a group of friends (and friends of friends) the other day when the subject of pensions came up.
Only about half the people there (all in their 30s and 40s) had any sort of pension. Quite a few of those said that they didn't pay in as much as they ought to.
Of the others, the reasons for not having one varied from - not wanting to think about it, assuming the kids would support them, relying on inheritance (!), wanting to spend their money now and let the future take care of itself etc.
Maybe I am unduly worrying (I was in the "have a pension fund but don't pay in as much as I should do" group) but I'm astounded that so many people have effectively closed their eyes to saving for their old age. The state pension isn't going to be much to live on, and can we really rely on other sources of income just materialising from nowhere?
I do appreciate some people genuinely have no money for a pension after essential bills, so am talking about the people who do have disposable income but choose to spend it elsewhere.
I have two occupational pensions and am currently investigating paying class 3 NICs to ensure that I have the maximum available for my state pension. I'm lucky in that dh has a very good occupational pension and he will also continue to work once he has retired at 53, so we will get salary and pension.
I think a lot of people are relying on their houses to provide them with a pension i.e. will sell up and downsize when the time comes. It costs so much to have any property now that I doubt many people with normal jobs have any spare cash sloshing around for a pension tbh.
Many people i know are on track to have their home mortgages paid off by the time they retire, and see that asset as their pension. Presumably they'll take equity out as needed, and live off that....?
i've only just started one (too late i suppose) but i just haven't been able to afford one beforehand. just the way it is sadly
Ive got one (I'm 27) dont pay anywhere near enough in to it even with my employer matching what I put in (6% of my earnings).
I'm very unusual though, I dont know a single other person my age with one
The simple fact is there wont be a state pension by the time I retire and it does concern me.
I'm rare in that I started a stakeholder pension when I was 20 but became a student two years later and had to stop paying in.
I still only have a part time job so no money going in (I'm 24 now)
I don't have one because I don't think they're particularly good value for money and anyway dh has a good one which should cover us. Plus we'll downsize & move to a cheaper area when we retire at 55, so should be ok <<fingers crossed>>
Property is our pension. We do have pensions, but they are miniscule and wont keep us in old age.
DH and I have always put disposable income into pensions/paying off mortgage rather than buying excessive stuff, flash cars, lux hols etc.
He still worries that if we have bad inflation we wouldn't have enough to live comfortably to a ripe old age. And he'd top himself before expecting DD to support us!
My parents "pension" was the family home, which they can't seem to sell in order to downsize, and they're struggling to get enough income together to live on whilst they wait for property prices to err..."do something".
Am fortunate in that I had a great occupational scheme pre kids, and dh's pension is currently our largest "expenditure". But am assuming that retirement age for my peers will be about 10 years later than for my parents.
I have a public sector final salary pension A rare thing indeed. DH no longer contributes to a pension plan but we have investments and savings which we see as our pension. That is something that will give us an income when we are no longer in paid employement.
I am astounded by how many of my peers (35-45) have no savings what so ever. There was a thread on here the other day about how much money could you put your hands on in an emergency. I am 40 DH 43 and we have always saved a percentage of our income. For us it is an non negotiable monthly expense like the mortgage.
I think paying off the mortgage is more important than saving. Certainly at the moment with low interest rates and not much trust in shares then reducing debt is the priority. I have a pension from my old employer (a local authority) but not working now so don't have a current pension plan. Dh has a very good civil service pension. So p'haps it is easy for us to rely on that but unless I have an income what can I do. I think the days of retiring at 60 are on the way out we will be working for longer.
Aren't pensions are modern concern and amiddle class one anyway? In previous generations people didn't expect to live much beyond 60 and also expected to be looked after by their extended family. Either that or you worked till you dropped.
Now you are irresponsible if you don't financially plan for a long retirement probably living on your own and dying in a care home:-( not surprising that people don't care to think about that!
Public sector pensions are all to common, in the jaundiced view of other taxpayers who don't have this luxury. I hope you appreciate your good fortune (sounds like you do!) - too many state employees I know don't, can't understand why their pay really should be lower than private for this one reason.
Yes - paying of mortgage and any other debt always comes first. Pensions are a bit different to other savings because they are tax efficient, its foolish not to take advantage of that.
I didn't have the money to save when I was young enough for it to be meaningful; now I'm in my late 40's there's absolutely no point in starting a pension.
I work in Occupational Pensions and tbh if you havent started one already then it may be best to wait until the market picks up as we have had a lot of customers calling up complaining about the drop in their pension fund (not just talking about a few hundred here). Obviously it depends on what kind of pension you want, Final Salary Pensions are probably the best but you dont get many of them nowadays.
I was paying into a Company Pension at age 16, I stopped 2 yrs later so its worth very little but will hopefully start paying in again when I have the money/market picks up!
We're lucky. My husband has a very generous final salary pension to which we pay no contributions (completely employer-funded). He's can retire on that pension when he's 40, or continue to work until he's 55 if he wants and collect a (potentially) large pension.
I have a private pension in my own name into which I've been paying for the past eight years (since I was 27) and this is to top up and pension we get form my husband.
You need spare cash in order to put it into a pension. ATM, not a lot of people are in that position.
Er... littlemiss - you absolutely don't want to wait till the market picks up. The best time to start a pension if you haven't already is when it is low not high!
Anything stock market based is a long-term investment. But even if you're already 40 you've 20 or 25 years to go so why wouldn't it be worthwhile - given that there are tax benefits versus other savings?
If anyone is eligible to join a final salary scheme and hasn't, they are idiots! I wish my co had one.
Grimma - perhaps you are right, I was just thinking though of if you start up a pension (especially a unit-invested one that buys from funds on the stock market) and then just as you've started paying into it, the value starts dropping, like it is just now!! But as you say it is long-term and hopefully the market will pick up.
I keep thinking of the people who are approaching retirement age and have been paying into a pension for decades, now as they are ready to retire, their pensions are worth soooo much less than it was say 2 years ago. Its a real shame.
Yip totally agree, final salary's are really worth joining - dont think many employers offer then anymore now as they are so good!
jcscot - your dh's salary is restricted by 8% to fund the pension. I went to an AFPRB meeting last year, and asked for the actual figure, and that was what I was told.
my dh and I are lucky to be in final salary pension schemes and have been since we were 25 (now both 40 somethings). However, even local authority final salary schemes are changing - some are being closed and others (like mine) are changing to 1/80ths from 1/60th schemes. I have been working part time for some of that time and on maternity leave so made some enquiries and in order to 'buy' back the extra years, I'd have to find an extra £1000 per year to put in my pension for the rest of my working life. I am going to do this as it is a good scheme and I cant see there being any state pension by the time we retire in 20 odd years. will also need to work my way up the greasy career pole (and stay full time) as you retire on one half - two thirds final salary (based on last three years of working).
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