To think we are heading into a pensions disaster

@Lifestooshort71 yes I have the option to withdraw the 25% (at the moment, there have been rumours that might change), but then I would only have c.£375k to buy an annuity to receive an income for life. £375k would buy an annuity of c.£12.5k a year for life, (depending on whether I want it inflation linked/an income for DH if I die first). The £125k drawdown might last 10 years say, at £12.5k a year, plus £12.5k from the annuity. When the drawdown runs out, my pension would be c.£12.5k a year. It’s obviously doable with state pension on top - especially with no mortgage. But it’s a lot of saving for not much income at the end of it!

The other uncertainty, is given ‘pots’ are heavily invested in the stock market, if another financial crisis/Covid/currently unknown crisis, hits in the year or two before I retire and the stock market crashes, my current £500k could be wiped out. It’s not guaranteed that pension pots will grow, given how they are invested.

DB schemes don’t have that investment risk, you have a guaranteed income for life according to the terms, regardless of what’s happening with the stock market.

Not sure you meant to reply to me here. I suspect it was meant for the eejit I was replying to?
Those were just the full time degree courses off the top of my head. I am well aware of how hard it is for students now compared to when I did one of the degrees I mentioned. And it wasn't easy then!

Yep, similar thinking here.

I'm an Xennial reflects my life more than saying I'm a Millennial 😅 .

We have only ever had one car (either car share or one of us will use public transport) and have literally just got a new (4-year-old) one after getting rid of our 11-year old one that we'd had for six years as it was costing too much in repairs.

We could have bought a bigger, more expensive house, but we're currently prioritising saving to pay off our mortgage which we're hoping to do within next 10 years and hopefully 7-8.

Together we have a mixture of higher education/LGPS/civil service pensions, which I admit that we haven't yet looked into closely, but have both been paying into since early-mid 20s. We have the option of paying AVCs, which we should probably look into in more detail once the mortgage is nearer the end.

I work for the NHS three days a week. I also work for myself two days a month. I take home much more working for myself twice a month than working for the NHS three days a week.

The NHS pension I’ve been paying into for 30 years is small consolation for being vastly underpaid for my skills and experience.

If it wasn’t for the pension, and the fact I believe in publicly-funded healthcare, I’d have left years ago.

Go for lives on the pension. Fill your boots. Staff will no longer have any incentive whatsoever to work for an organisation that underpays them to such a woeful extent. You’ll have fixed the pension issue and fucked the NHS. it’s not as easy as you think.

Even your average stem degree biomedical science I have firsthand experience so you could not have worked even part-time alongside it. You’re in the lab eight hours a day.

Indeed. And that line on my payslip that says I paid £885 into my NHS pension last month must’ve been a typo.

But you’re not. Everyone on here wailing about how awful things will be for their DC propping up pensioners in years to come, are contributing to this problem by deliberately making themselves impoverished in their old age.

NHS pensions are indeed generous compared to a lot of private sector schemes. You seem to want to equalise down. Why not equalise up? Because to be honest even the NHS scheme is no longer that generous when you look at money paid out relative to money paid in.

For example, a Band 5 nurse will pay 8.3% of gross salary (about £3kpa) whilst the employer will pay 23% in lieu of a higher salary (about £9k). Over a 40 year career that’s £480,000 in the pot plus compound interest. The NHS pension, if taken at 60, would be slightly less than £20,000. So not out of whack at all compared to your £4,000 per £100,000 rule.

I am in a position of enormous privilege on this. As of this month, I have my full 35 years contributions covered off, but won't be able to get my state pension for another 15 years or thereabouts.
My profession was not one for providing pensions. When I first qualified, my father sent his IFA to see me and help me set up a private pension when I was 23. I hated my father, and that was about the most useful thing he ever did for me.
I have continued paying into it and now, having changed career, employer contributions etc, I will have around £700k by late 50s, my mortgage will be paid off and kids left home. Husband has been similarly successful. Trying not to count the days, but I am so ready to enjoy the next phase of life.

Public sector pensions need to be scrapped. It’s the private sector paying for them

tax payers pay & plenty of public sector workers pay tax...

Public sector pensions need to be scrapped. It’s the private sector paying for them, and we can’t hope to achieve anything like the public sector pension. More equitable to only allow defined contribution pensions - then maybe something would be done for us all.

FWIW I don’t think we’re heading towards a crisis

The issue is demographics, there won't be enough workers to fund the pensioners.

Louds of courses and loads of Uni cities have masses more students now. They’re all cramming for the same jobs

You need to earn a lot as well to top up the loans. Students are also affected by the growing rental costs

We’ve got three at Uni. We haven’t put much money into pensions for years.
No choice
Plus we have private pensions which are useless compared to public and our employers didn’t start paying in till 2018, when they were forced to by the Govn.

( although I was self employed by that point anyway.)

Im not worried though
We grow our own veg
Dont eat meat and absolutely hate waste and pointless extravagance.
When we’ve moved we’ll install PVs and heat pumps and as we’ve worked since Uni we’ll be fine.
We never expected to rely on pensions only anyway.

https://www.moneysavingexpert.com/pensions/ is a good place to start. Have a look at the options available and what is the best fit for you.

Yes you can feasibly withdraw around 4% a year and not effect the savings. Or you can withdraw more and reduce the pot over time.

4% of 500k is 20k, plus state pension of c11k = 31k. Very healthy considering likely not to have housing costs. In reality you'd probably take a cash lump sum etc.

The thing is these figures sound insane but once you get past 100k savings, then compound interest really starts to work in your favour and growth rockets. No one actually saved 500k - it's compound interest doing some of the work!

Just like every other whining Tory on here you don't understand anything about public sector pensions. Nor can you envisage a world where businesses and rich people are actually TAXED PROPERLY to fund public services. If those 'entities' were actually taxed and all tax havens were emptied out we would all be rich and have nice pensions. But no, we need Musk and Trump and Farage more than equality and financial justice. Or so your lying 'newspaper' tells you.

I agree with the broad thrust of what you say, but one of the blessings of Liz and Rachel’s mismanagement of the economy is that you can now get an index linked annuity at 65 that pays about 5%, giving you £40k from £800k. A higher attitude to risk and willingness to just go into drawdown would increase that.

Assuming you don’t need a lump sum then (at the moment) taken as income 25% will be tax free, there’s no NI on any of it and so assuming you have a full personal allowance you’ll net around £3k a month. Add the state pension (if you have full entitlement) at 67 and you’re at around £3,700 net a month. Not a life of luxury but, assuming you own a house, have cleared any debts and have a modicum of other savings by then, it’ll be a comfortable enough retirement.

Public sector pensions schemes are not what they were. I have had colleagues retiring on final salary, hitting the lifetime allowance etc but those options aren't available to me.

I come from a WC background where the mentality is well no one lives long enough to claim so why save. Min wage physically demanding jobs saving for a future you might never see isn’t a priority, it’s seen as a very mc luxury.

The government has really let people down with lack of financial education.

At 40/50 you can definitely still turn things around- have a look at Rebel Finance School which does a free course in pensions and savings every Summer. It's worth understanding what your pension is invested in, what the fees are being taken and how well its performing. I've moved mine to a different platform with less fees and into equities not bonds as I'm 30 years off retirement so I can handle the risk.

DM works in a minimum wage carer role and has saved around 50k in cash over about 30 years. She smokes like a chimney so that 50k could probably be around 80k, plus she never took advantage of any employer pension.

DF delayed taking his state pension until he was in his 70s which boosted it to around 15k a year. Not sure that is still an option or will still be an option.

Worth looking to make sure you have enough NI contributions.

Because nurses and teaching assistants deserve to be poor, perhaps?

Honestly it’s such a tired old trope. It’s easy to find a wealthy public sector pensioner (although it’s easier to find a far far wealthier banker pensioner) and the Daily Mail sell papers by making poor people jealous of quite rich people whilst ignoring disgustingly rich people.

The truth is that public sector pensions are quite generous. But the mandatory contributions are very high so the pots themselves are quite large. I pay over ten grand a year into my pension now at 43, and have been paying a lot in since I was 21. I’ll get about £30k a year out at 65. I’ll have a comfortable retirement but I don’t think it’s a piss take and I certainly won’t be buying a Ferrari and jetting off to Vegas every year. And my public sector pension is at the top end because I’m quite senior and have been for ages.

I’m a 6 figure earner now (and have been for about 10years) and my pot is c.£500k. I still have 15yrs for it to grow & contribute further, but I’m not going to be rolling in money at retirement
I'm an ignoramus when it comes to private pensions (I live on a state pension and interest from a few savings). When someone says their pot is £500k, would that mean they could withdraw a %age of it each year to supplement their state pension? Surely that would be a decent amount to live on until you popped your clogs - presuming someone on 6 figures owns a property outright so no mortgage or rent.

NHS pensions are incredibly generous compared to private sector pensions and inflation linked. While the income they give you might not seem like much, bear in mind each £4000 or so a year requires a pot of about £100,000 or so.

Because you are a parent and prioritising your children?

Has anyone got any evidence for the ‘there’ll be no state pension by the time I retire’ line? Of course not, because it’s nonsense. Every country in the developed world has a state pension, and ours has become a lot more generous in our recent years. Perhaps the triple lock will go, but the actual pension itself? Of course it won’t.

I do have sympathy for people who have had little chance to save, especially those who also haven’t had the chance to own their own home. But for everyone else my sympathies are limited because part of being an adult is making financial choices, even if they’re long term and boring like saving for a pension.

FWIW I don’t think we’re heading towards a crisis. I think there’ll be a lot of people whose standards of living don’t match their expectations or sense of entitlement, but there won’t be an enormous increase in genuine poverty. The state pension is worth over £200 a week before any private pension at all, and it that’s all you get then there are top up benefits available. Sure you’ll not be going on cruises but you won’t starve either.