To cry over state pension age speculation rise to 75-81

[feellikeahugefailure]

www.telegraph.co.uk/news/politics/georgeosborne/12179375/Work-till-youre-75-or-even-81-under-Government-review-of-state-pension-age.html

Where has it all gone wrong? My parents could buy a home one one income for 3 times annual wage. Dad retired at 55, mum never needed to work and has been claiming a state pension for over a decade since 60. I do a similar job to my dad.

Where I live the average house price is 13 times my wage. My pension I've been paying into for over 10 years will if I keep paying into it for almost 40 more years give me 2'000 a year if it does averagely and 1'000 if it does poorly, and it probably will do poorly. Then no state pension until I'm about to drop dead. Can't afford a house or to put money away for retirement.

It is bloody depressing to think you will have to work until you die and worse, won't ever even reach the age when you can claim your money.

But it's not your money - that's the point. In the vast majority of cases it's what you've paid in plus a substantial amount more.

It's really as simple as if you want to "enjoy" 20+ years of retirement, make sure you have put enough aside to afford to because the state will be providing the bare minimum (if anything). "Enjoying" your retirement - by which many seem to mean holidays and leisure time - is not an entitlement.

Blindsider, of course this is the inevitable outcome. Who ever thought paying in 4% was ever going to actually be enough lol?

In the long run all that has happened is that they have created portable, private versions of the old company pension schemes. Wonder why so many of those company schemes are underfunded? Because they too thought that they could somehow magic up productivity and money in the future.

One of the best things that will happen is in the next 5-10 years most company's will have finally topped up their old schemes and the productivity gains can finally filter down to us younger workers.

Sorry cleaty but the harsh reality is that if it won't be paying out much at all in spite of paying in continuously then you've not put enough in over the years.

Put enough aside to afford retirement? How much is enough? Unless you are well paid it has to be more than most people pay into pension schemes. Most pension schemes were devised as a top up to state pension, not to replace it.

redhat - I have paid into a Local Government Pension Scheme for 30 years. But I am not well paid, and the rules keep changing.

So yes, you are probably right that if you are not well paid, there is no point paying into a pension scheme.

Enough is however much more you want to have over and above a minimum state pension. As a pp has said, 4 percent (or thereabouts) was never going to be enough unless you're a millionaire and can afford to live on 4 percent of your salary.

For those who have started private pensions for their children, you are aware that the Government has reduced the lifetime allowance for pensions and is expected to hit private pensions again in the next budget.

Currently the lifetime allowance is high £1m (anything over that is taxed) but it used to be much higher. There is a real risk that the government will be hitting private pensions for more tax in the next few years so I would keep an eye on what is happening there.

You are damned if you do and you are damned if you don't!

X post but with your updated post I cannot see how you will be living in poverty. Local Government pension contribution is 21 percent just as an employer contribution. 21 percent as an employer contribution is unheard of anywhere other than in the private sector.

I didn't say that if you're not well paid there is no point paying into a pension scheme. I think everyone need to take responsibility for how they are going to survive once they stop working. Albeit that I accept this is not easy to do.

I really think some people have no idea how most people live.

There's a good chance we'll have some sort of UBI 30 years hence, and the types of jobs that people do will be different

Compare 30 years ago to the situation today and then multiply by say 5 or 10 to account for acceleration of technological change and innovation with the associated cultural change

lljkk - I'm the opposite, I'm part of a very active volunteer group, and the vast majority are retired women in their 60s and 70s. They have a spectacular amount of drive and ability :)

I think it depends on the group - the sports club I volunteer with is mainly younger people, but at 46 I struggle to make the times for my coach badge already, in 10 years time I think I'll be making the tea - or more likely applying for grants and doing paperwork.

Assuming that is directed at me cleaty I am from a working class background (council estate), my DM was a cleaner and my DF a labourer. I went to a badly performing school and for the first two years of my career I earned NMW so I have a perfectly good idea of how tough things can be.

I also now do a lot of work with local authorities and have a perfectly good idea of how generous the LGPS is, even after the changes.

rehat - Local Government Pension Scheme is now tied to state pension age. Only the contributions made before the change will be counted towards retirement at 65 years of age.

For me that means I will receive 25% of my salary at 65. With the state pension that would have meant I would be fine. But without the state pension it will not be enough to even begin to eat and heat my home. The rest of my pension I won't get until state pension age. And that could be 81.

So yes, at 81 I might be fine. But as I have chronic health problems I will probably be dead by then. So I will live in real poverty probably in my later years in spite of paying into what everyone always said was a solid investment.

I do not have wealthy family to inherit from. And it has been a real struggle sometimes to pay my pension contributions. I could not afford any other investment at the same time.

I would have been better doing what many of my colleagues did and spend it having a good time.

Cleatly you could have paid in double and you would have twice as much as the private component of your pension. Feigning ignorance doesn't change facts.

Pension saving is effectively giving up some of your labour now so that you can live off that deferred labour later. So for most young worker today if they want to have 20+ years of comfortable retirement they will probably need to give up 15-20% of their income every for 40-50 years to achieve this.

If they are happy with a very quiet retirement it is more like half that amount.

It rather looks like the Ponzi scheme of national insurance in return for state pension is unravelling, which was inevitable sooner or later.

It's little different from any of the well known pyramid selling schemes - the people first into it do ok but the later investors get it in the pants.

You can not pay in double. Buying extra years is extremely expensive.

The pension is based on working 40 years. I will have worked 40 years. But the rules have changed.

Actually it is not about ignorance. How can you make long term financial planning if the rules change?

My honest advice to anyone who is not well paid, do not bother with a pension. It is nearly always a waste of money.

My honest advice to anyone who is not well paid, do not bother with a pension. It is nearly always a waste of money.

So with those great words of wisdom Cleaty how do you advise people survive during their later years once they have stopped working? If saving for retirement is stupid then presumably there is a magic solution for living an enjoyable life for free?

I'll ask again the people who say it was bound to collapse,
why is it that it's not the case in other countries?

The point is that pension rules keep changing. I have paid in between 7% and 8% of my salary for every year for just over 30 years. It has been wasted.

I would have been better off simply saving money in the bank. At least that way I could spend it when I want instead of having to wait till state retirement age.

No you would not have been better doing that, you would have been throwing away the opportunity to have your employer contribution which is worth more than 20 percent of your salary. That would have been very foolish.

Yes, that is what I thought when I started out. Although note some years there were no employer contributions at all. When shares were booming, local authorities stopped adding their contribution.

But would you really be okay with not being able to draw down your pension until 81 years of age? How is that possibly fair for someone who has paid in since 21 years of age?

To those saying pay more to a private pension, it's not that easy. I can't remember what percentage I pay in but to pay more would mean not struggling with other things. DH is self employed and usually works part time (not through choice before anyone criticises) so I can't spare more of my salary.

"Sorry cleaty but the harsh reality is that if it won't be paying out much at all in spite of paying in continuously then you've not put enough in over the years."

Yet strangely the pensions industry has been amazingly profitable over a long period of time, there was a study somewhere that lots of people have paid in enough over a long period of time but would have been better off stashing it under the bed cause all of the money gained from it being invested has been siphoned off.

Exactly. I looked into a separate private pension scheme about 15 years ago, and the fees were very high. Lots of people paying into pension schemes have lost out overall.