State pension

[Brexitstolemyfuture]

People are being lied to about their chances of ever getting it imo. So they are going to raise it another year. I'm still 25+ years off it. Aibu to think I'll never get it?

ExplodedCloud LGPS has provision to pay out retirement benefits early if you're unable to work due to ill-health, may be worth looking into/ bearing in mind for the future.

Hmm, 37 professional and haven't managed to get my salary above £23,000 yet, after 15 years in my field. So no hope of a private pension for me. I'm down to £0 at the end of every month.

How are people supposed to be saving when pension anuity rates are going down, 60k of student debt, interest rates are low and many can't even afford an overpriced home. Is a bleak future for many

it's easy. If you put away some money each month, at around 0% interest, in 30 years you will have approximately exactly how much you put away.

Percival yes it does. You lose approx 5% of your pension for each year before state retirement date. So yesterday basically pinched 5% of my pension if I retire at 67.

Oh actually scratch that - my illness might actually mean I can go early without incurring that penalty!

ExplodedCloud There's no reduction for ill-health retirement according to their website

www.lgpsmember.org/tol/thinking-leaving-illhealth.php

only for taking voluntary early retirement, which is different. Agree that yesterday cost most people another year of work or 5% of their pension though.

cross post!

For those that can put aside a little amount each month (and I know a lot can't) even if that amount is just £5, please do. Make sure it is somewhere where your investment will increase, not cash - the stock market is not as risky as it is perceived to be if it is a long term, diversified investment.

Lifetime ISAs are worth looking at for those between 18 - 40:
www.moneysavingexpert.com/savings/lifetime-ISAs

For everything you pay in (up to £4000 p/a), the government adds a 25% bonus.

So if you pay in £5/month, you will get an extra £15 that year. Which doesn't sound a lot, but keep doing it over the years and make sure your money is invested somewhere decent, where it will grow overall (if it goes down slightly one year but up the next 5 years this is OK) and it will add up. It will certainly be better than nothing. Obviously investing £10 a month would be better, and £20 would be better still etc etc.

Compound interest is a powerful thing.

Why amazes me is how ignorant some people are when it comes to pensions. I am not talking about anybody on here, but my friends and family.

Women who do not have enough qualifying years to receive the full state pension at any age or who still think they can get their pension at 60. Manual workers with no idea how they are going to live when they are too old to work. People who remorgaged to free up equity for holidays and home improvements who will now be repaying right up until they retire with no opportunity to build up some savings. People who are banking on inheritances when the parents are likely to live well into old age or need the money for care home fees.

Really good points made about no grandparents to do childcare or look after elderly relatives.

I also worry about people who rent and have no option of downsizing to free up money. Will they all get housing benefit to cover rent? How much will that cost. Will there be enough one bedroom properties to downsize to.

Add those who don't understand how their soon-to-expire interest only mortgage works to that list, BelindaBelle

squishy is right about compound interest! The key is to save whatever you can as soon as you can. I've heard this described as 'pay yourself first'.

Percival thanks - my organisation doesn't publicise that so I'd missed it initially. I suspect the uptake of that will increase over the next 18 years. Just need to avoid redundancy for 8 more years now.
I still think it's incredibly unfair though to move the pension age for occupational schemes for existing members and not to stagger the implementation. Someone born on 31.3.1970 can retire a year and a day earlier than someone born 24 hours later.

Compound interest is a powerful thing.

It's one of the wonders of the world

Real inflation has been outstripping interest massively for the last 10 years.

I wouldn't even be so sure the pound will exist in 30 years time.

It does seem that current pensioners lifestyles are maintained and everyone below them on the pyramid will suffer.

Belinda make some very good points and things that i have thought about lately. I know that dh and I are ignorant about pensions , i will try to rectify this and read up a bit more.
Also, i am now early 50s and most of my friends ( who are a bit younger) and work colleagues all seem to be divorcing or splitting up. They are all hoping the equity from their house will pay for things like the huge divorce bill or funding a new place, but its the women that will now need to find something to rent and renting is huge where we live. I shudder to think how they will manage to be honest, not everyone has parents that can wade in and help out either. My dad does depend on my brothers and myself a lot to keep him going - i doubt my own children will be able to do as much for me and dh. I;ve heard of compound interest - where do these accounts exist ?

Jenny, i think that a lot of people will be in the same boat too, going by this thread. at least you are thinking about it, many just do the 'head in sand' thing.

Compound interest is a powerful thing.

really easy to compute if the interest rates are 0.

chili but does a 0% mortgage exist?

Hopefully I'll have no mortgage when I retire and I'll have a private pension. My husband also will. We will also have inheritance from both parents so hopefully we'll be OK all in all. I bet by the time we retire (80s children) retirement will be at least 75. I don't want to rely on it to be honest. I don't think any of us can.

The point is people are paying for something they won't receive themselves.

This is the case with benefits, no? It's all the same, just paying for other people. I'd rather be paying for old people who can't work any longer.

"It's one of the wonders of the world
Real inflation has been outstripping interest massively for the last 10 years"

I know it seems like I was stating the obvious, but I know loads of highly numerate people who underestimate the full impact of it. And I completely agree that the difference between inflation and interest is a problem - it is precisely because of compound interest that it is an even worse problem for long term savers than some people realise.

"really easy to compute if the interest rates are 0."
-Not in real terms it isn't, because if you have savings earning 0%, they are in reality losing money as inflation erodes them. So effectively you are earning negative compound interest on your savings.

Inheritance cant really be seen as a given - if parents do have to go into private care, the house and assets are assessed toward payment for that care. Its already spoken about with my family as they know people who are watching their inheritance being eroded away as the parents could no longer look after themselves and some places are 1000 pounds a week. Dont get old seems to become a bit of a mantra, but nobody knows what the future holds.

I actually think the attitude that 'oh the pension probably won't exist when we're that age' is incredibly dangerous, and leads to people making bad choices.

It doesn't really make sense to on the one hand complain about how much current pensioners are being protected, while on the other hand assuming that by the time our generation are pensioners we'll be completely thrown under the bus by government and left to die in poverty.

I agree that changes will be made, ages will be shifted, but I think the biggest risk will be to people who don't take any steps- don't maximise their state pension, don't put what little they can into a private pension- and then when the time comes are in a terrible position compared to their peers. If you have anything to put aside, then a pension is still one of the best places to put it - as always, watch what the wealthy do: they're mostly maxing out their pensions. My parents, in addition to the state pension, have a small private pension of about 5 grand a year. It seems so small you'd say 'why would I bother saving for so little' but it makes all the difference in terms of holidays,

I try not to be too gloomy about it - we should be able to pay the house off in the next 25 years which will make us nearly sixty, I feel like with no mortgage/rent, the state pension and whatever small private pension we can cobble together will ensure we're fed and warm. As far as Ill-health and care costs go, it's too hard to predict: I try and take care of my health and luck and genetics will do the rest.

Most of us can't take steps to double our earning power, lots of people have very limited options to do anything but pay immediate bills, but for those in between I think it's worth looking forward and doing what we can. Also, being realistic about the kind of sacrifices that means- I am about to put off buying a car and re-start a pension instead, I'm lucky I don't rely on a car for work but most people who live where I do have one. If you have the money taken out before it gets your account you just adjust accordingly- again, not everyone can do this, but the 'pay yourself first' argument isn't all wrong. Not everyone can make sacrifices, but for a sizeable number of people they're just putting off the inevitable and buying the argument it will be as bad for everyone when the reality is it won't.

I'm 41 now and DH is 45. I'm expecting to literally work until I drop. Last night we were chatting and expressed a vague hope that DS (2.5 yrs) might become a premier footballer or a presenter for the BBC and look after us so we could retire at a sensible age!

cute, start sending your son to stage school when he is a bit older ( or the local football club!)
mind you , there is always the thing that its not 'what you know, its who you know' too. you will need to start 'networking' too.
good luck!

As someone who has got the type of student loan that won't get written off when I retire, the whole 'don't worry about student loans' thing really grates.
And as an Nhs employee, my pension is linked to state retirement age, which can (& no doubt, will) be increased. I'm priced out of the housing market. It's all quite depressing.

Hey ho.