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!

MoreBeta - your advice is very helpful.

If the employer pays the investment fees so that as an individual all your pension contributions go into the fund rather than being part siphoned off to fund the fund manager then do you think investing in a pension becomes worthwhile or does the poor investment performance lead you to still promote NS and ISAs? Theer are after all the tax breaks from pensions to consider.

I too am sick of reading articles in which "people" (sweeping generalisation) are directly or indirectly accused of being feckless in regard to their pension provision - or lack of it. Many many families are finding it near impossible to fund the here and now, never mind the future and whilst the thought of what the future might hold literally sickens me and keeps me awake at night, I have no choice but to concentrate on getting through life as it is at the moment. But then again, my current finances also keep me awake at night ....

I obviously hope that a miracle may occur ..... that fantastic job opportunity, that long lost relative's inheritance or a lottery win ..... but realistically the chances of any of that happening are practically nil, and there are 100s of 1000s of others all wishing for the same thing.

Unfortunately, for many of us, funding our "retirement" will mean continuing to work in some capacity as long as someone will have us .... and the dream of "taking it easy", travel, hobbies etc etc will remain just that. I do actually wonder - and sorry to be so morbid - whether if, in 30 or so years' time, we will see an increase in suicide rates amongst people of "retirement" age because life will have become so unbearable for many ? I appreciate that there's always been poverty amongst pensioners but I fear more people than ever are now going to be affected in the future. It's not "just", IMO, the lack of money which will drag people down, but also the extra physical and mental effort many of them will have had to expend (for far longer than they ever expected to, and for far longer than many of today's pensioners have had to) if they're "lucky" enough to still have jobs of some sort. There's a big difference between wanting to continue working and obviously there's nothing wrong with that, and being effectively forced to continue working when you've already worked your whole life and are worn out. At the very least, I think there will be a significant increase in mental health issues such as depression.

I remember when I started work that my older colleagues looked forward to their retirement. They were retiring in their late 50s to early 60s, with 2/3 final salary pensions if they'd been there their whole working lives and many were also benefitting from the fantastic bonus payouts on endowments (early 80s) which helped boost the retirement fund. These people, while they were still young enough saw retirement as a reward for a lifetime of slog and were full of exciting plans .... it was, literally, a new lease of life for them, not something to be endured and feared as it now is for many of us. I know several people - my mum included (who, no offence, had a pretty "lowly" job) - who've spent the last 15-20 years on one long holiday ..... learning new skills for the fun of it, taking frequent holidays, exploring the UK on daytrips, nurturing existing friendships and having the time to seek out new ones, basically doing what they want to do, day after day, year after year ..... be that reading all those books you've always wanted to read, spending all day in the garden, doing voluntary work which interests you etc etc. I just don't see how a life like that will ever happen for me and for many others in a similar position.

I don't just shrug when I read articles like this - I feel enraged, though admit it'd be much better for my blood pressure if I could just shrug it off. It's just so demoralising to be lectured like this - on a frequent basis - when living with the worry of retirement feels punishing enough. I know I'm not feckless, and I know I can't be the only one but what the hell are we supposed to do about it when we have no disposable income at all let alone the sums needed to make even the tiniest of dents in pension shortfalls ?

As things stand now I'm kind of hoping I'll die quickly and quietly in my sleep at 65 as my dad did. That'll solve the pension problem. No doubt the government are also hoping a great many of us will conveniently disappear in the same way !

Appreciate of course that there are some irresponsible people about who could in theory afford to save more than they do (notwithstanding concerns about where to invest and so on) but d'you know what, if they have been splashing the cash about having fun at least they can look back on some pretty good memories in their old age .......... many of us can't. Gawd, i'll get off my soap box now ..... just hate, hate hate these insulting condescending lectures about pensions.

voiture - if you are not paying fees, you have no debts and you have used up all your other tax free investment opportunites and you are getting a decent investment performance then yes contributing to a pension fund is definitley worth considering. Of course, do remember you will pay tax on any pension you take - although you do get a tax break on contributions going in a private pension isnt a totally tax free investment.

Everyone can of course earn £10,600 capital gains tax free in this tax year by owning shares directly in their on name anyway. Shares held in ISAs are capital gains tax free as well so if you had say £1000 per month to save then buying shares directly and a self select ISA might be a better way to go - although you do need to be confident enough to manage and choose the investments yourself of course.

Everyone can of course earn £10,600 capital gains tax free in this tax year by owning shares directly in their on name anyway.

er, 'everyone' with a shedload of money, that'd be.

Im still young and want a good retirement but Im terrified of pensions. I plan on being self employed so will have to organise it myself can't have a job pension like DH (health service). However I'm mostly terrified because my dad is nearly 64 and although earned well and put a lot into his pension it was with equitable life who are now bust. he was paying in to it for years and years and its now worth fuck all. he was self employed so it was his only pension not a private one on top of a company pension IYSWIM. he is supposed to retire in a year or two but has fuck all to live on, even though he must have put thousands upon thousands into his pension. for all i know i could get a pension with a good company but whose to tell what will happen by the time my retirement comes along.

However I'm mostly terrified because my dad is nearly 64 and although earned well and put a lot into his pension it was with equitable life who are now bust

That's why it's advisable to go for a SIPP because you diversify your holdings across a number of fund providers rather than handing it to a pension company to invest for you. You have to manage it yourself, but an IFA can do most of the admin for you, and you could just put it in trackers which have low fees and just track the major indices.

I too find what More Beta is writing very helpful.

How do you go about setting up a self-select ISA?

Maig, another horrible lesson in not putting all your eggs in one basket. Your poor dad.

And another investment rule based on my observations over the years - avoid companies who advertise a lot. Remember all those 'Its an Equitable Life, Henry' ads - just before they went down the pan.

TheBride - that ratio you pointed out is the real killer fact for pensions and it isignoring that killer fact was basically the 'big lie' that allowed the retirees of the last 25 years to take huge public and private pensions that they never really paid for. We and lateR generations will have to continue the pensions of our parents as we also struggle to fund our own retirement too. What catsmother said is absolutely spot on and is the dawning reality foreveryone as that 'big lie' is now unwinding.

Pensions up to now have bene one big Ponzi scheme that worked as long as there were more people putting new money in the bottom than retirees taking money out of the top. There are now too many retirees and too few workers to make the Ponzi scheme work and most politicians and much of the pension industry are not being candid about just how bad the situation is.

nijinsky - most high street banks do self select ISAs. Also Hargreaves Lansdown have excellent self select ISA and SIPP schemes. Their admin and dealing facilities are great.

Many banks will try and sell you a share ISA that they manage and provides them with much higher fees so insist on a self select one that you manage. Watch out though for high fees even on self select ISAs - they do vary wildly. Shop around.

A self-select ISA relies upon you, the investor, knowing the ins and outs of which companies will succeed on the stock market. As most ordinary people are not able to spot a winning company it's the equivalent of telling them to put their money on a horse. Highly risky in other words

Cognito Not at all. You can just put it in a tracker fund if you want. You don't have to select individual stocks yourself.

I have given up on the idea of ever starting a pension for myself - I'm 40 and my income is unlikely to rise to the point where it would ever make sense, I think, especially given my age. I would be happy to work well beyond 65 / 70 though, health permitting.

But, I've been wondering if I should start a pension for DD (12)? Is it even possible to do this? It would have to be a pretty small amount, maybe £20 or less a month. (I am debt free apart from an overdraft the size of my monthly wages & save £40 a month, but I usually have to use up my savings once a year or so stay debt-free if that makes sense, i.e. I'm not accumulating savings, its just rainy day funds for emergencies).

I know so little about pensions, that the only criteria I have so far it that it must be money I can afford to lose & I would like it to be an ethical company so that even if I balls it up & DD never sees any benefit, it will do some good along the way.

Bearing in mind that I can't afford to make lots of different kinds of savings, would I be mad to do this rather than try & save ahead for uni expenses etc?

catsmother
"I remember when I started work that my older colleagues looked forward to their retirement. They were retiring in their late 50s to early 60s, with 2/3 final salary pensions if they'd been there their whole working lives and many were also benefitting from the fantastic bonus payouts on endowments (early 80s) which helped boost the retirement fund. These people, while they were still young enough saw retirement as a reward for a lifetime of slog and were full of exciting plans .... it was, literally, a new lease of life for them, not something to be endured and feared as it now is for many of us. I know several people - my mum included (who, no offence, had a pretty "lowly" job) - who've spent the last 15-20 years on one long holiday ..... learning new skills for the fun of it, taking frequent holidays, exploring the UK on daytrips, nurturing existing friendships and having the time to seek out new ones, basically doing what they want to do, day after day, year after year ..... be that reading all those books you've always wanted to read, spending all day in the garden, doing voluntary work which interests you etc etc. I just don't see how a life like that will ever happen for me and for many others in a similar position."

This - for me, is why I don't feel guilty about currently having a "lowly" job which stops dead on 5pm, has minimal responsibility & allows me to do some of the living in the moment you describe above: time for friends, interests & voluntary work at least if not the holidays!

But I would like DD to have the option of a different path through life, and I don't want her to be in the precarious position I am in, heading towards old age.

ITA with the OP - most people on 'average' incomes have very little left over to squirrel away in pensions.

I have no debt apart from £100 on a CC, I work p/t and bring home approx £600/month and pay £50/month into a company pension that my company pay into also. I've only had this a year, I also have a frozen pension from a former employer who I worked for for 8yrs. In my late 40's, I have no real idea whether I'm doing the right thing or would be better to cancel the pension contributions and stick it in an ISA?

I fully anticipate that I will not have as an enjoyable retirement as my older relatives are having.

@wotss... yes you can start a pension for a child. From birth, if you wished. If you've only got a small amount to put by, however, it might be better spent on helping them get an education or for putting a deposit on a house. One of the Child Trust Funds or a Children's ISA, perhaps. A leg up when you're young is often more useful than a bit of extra cash when you're in your sixties....

@Horsemad. Don't come out of your company scheme entirely, even if you decide to reduce contributions and put the balance in Cash ISAs. Many people were persuaded to leave company schemes a few years ago and most received compensation for having had very bad advice.

I am a stay-at-home-mum, So I don't have a pension. My OH has a pension, he and his company add to each month. He's had his since his first job after Uni..
We put away for our daughter each month-so that she can get driving lessons-first car,uni fees and deposit for her first house..
We do all this while still saving for a deposit for our first house lol.. Still renting which is too much money down the drain for someone else mortgage plus.
After this month OH will be debt free as he'll be cleared of uni debt wooooot!
That money will be used to go towards a house and hopefully by end of this year we can start looking.
We do look ahead into future but never thought about myself just OH (Live of him) and making sure my wee girl has the options in life if she chooses to go to uni etc....

Are there different considerations with children because they won't be paying tax anyway so the benefits of tax-free investments don't apply in the same way? I'd agree it would be better to save it so that they start off with as little debt as possible, rather than a pension fund.

Well that's the thing Cogito, maybe it would be better saved for something else?
I just wonder how my position would be if I'd been putting away into a pension ever since my teens...

Oh, and I get Housing Benefit (not the full amount but I couldn't afford to rent without it, it roughly amounts to the difference between a social rent & the local market rent i.e. if I was living in a council flat I wouldn't need to claim it) as well as Tax Credits, and you aren't supposed to have much in savings since benefits are basically intended to support subsistence.

If DD is putting what is really a 'pocket money' amount into a pension or her own savings, but the money came from me - does it count as her savings or mine?

Cogito, thanks for the info, I remember when we were being informed about the new pension scheme, they said we didn't have to join and that the company would pay into it for us even if we chose not to join.

Do you still think I should stay in it or let them pay their bit and save my contribution elsewhere?

@wotss... there's no doubt that if someone had started a pension fund for you at birth and you'd added to it regularly since that it would probably be pretty substantial by now. On the 'who's account is it?' question. You have to be named on the child's account because you're holding it for your child until they are old enough to look after it themselves. Therefore it counts as your savings. However, in something like a Child Trust Fund where the capital can't be accessed until age 18, it doesn't count.

My parents are paying into two pensions for my DS who is nearly 6. It totals £88 net per month cost to them. As he has probable ASD, they see it that his earning potential may be reduced and they want him to have a comfortable retirement without worrying about it when he is an adult. They will do the same for any grandchildren my brother gives them too.

We are lucky that they will also be able to assist with university fees etc. We are not in a position to save for him but I have a pension with my employer. My final salary scheme was taken away a year or so ago so we now have a money purchase scheme but my employer pay a good chunck into it still so am lucky. DH hasn't got a pension yet.

My parents are paying into two pensions for my DS who is nearly 6. It totals £88 net per month cost to them. As he has probable ASD, they see it that his earning potential may be reduced and they want him to have a comfortable retirement without worrying about it when he is an adult. They will do the same for any grandchildren my brother gives them too.

Bit of a shame though for the children who don't have grandparents who will do this for them. Puts them at a disadvantage through life through accident of birth and no fault of their own.