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AIBU?

Share your dilemmas and get honest opinions from other Mumsnetters.

Original poster

To think we’re sitting in a pensions time bomb

244 replies

Iwanttobe8stoneagain · 03/12/2017 17:54

I have been thinking more and more about my retirement I reckon I’ll have a pot (pension and other investments) equivalent to about £300k when I retire. But looking st what return I’ll get on this it’s about £11k year (plus whatever state pension still exists). My DH will prob have a little less. I thought we were doing quite well saving and certainly can’t afford any more. AIBU to be panicking over how we will be able to afford retirement and I suspect lots of people will have even less of a pot.

OP posts:
chicaguapa · 05/12/2017 07:38

Bubble, there's also every chance your DM won't be leaving any money and it'll all be going on care home costs. Sad

NeverTwerkNaked · 05/12/2017 07:41

bubble it’s not really a power thing. That’s her home you are talking about!

LizzieSiddal · 05/12/2017 07:43

Exactly Chic. We’re in a similar position in that my ILs have a property and savings near a million. Dh and I don’t ever consider or assume we will inherit any of it.
If we did it would mean they would both go very suddenly and youngish. (I mean in their 80s)
That’s not very likely. We assume they’ll live to a right old age and will most likely need care of some kind.

I know more and more elderly people who are living until their late 90s who need a lot of care.

Bubblebubblepop · 05/12/2017 07:44

Agreed, that is the best case scenario.

Of course it's her home- and she's only 60! But even she doesn't see it as her home- it's her legancy, her inheritance to gift.

Think of all the assets in our society tied up by her generation and older

LizzieSiddal · 05/12/2017 07:45

What do you suggest these people do then Bubble?

Ellisandra · 05/12/2017 07:48

If that Sad is for the idea the lady will become unwell, I wholeheartedly agree.
But if the Sad is for the idea that her equity will go towards her own care, I disagree.

I think that tolerance delayed payment of carehome fees is going to drop massively.

The 'dementia tax' bombed, but I think a revised version is inevitable. According the the BBC, 1 in 10 over 65 will need over £100K of care.

I think younger people are fairly resistant to the idea of hard earned income being taken - but many see examples like this - a RTB council house now worth £500K as unearned and unfair. Of course it's not just luck in a house price bubble - the OP's mother will probably have worked hard to pay the rent then mortgage. But a huge amount of the half a million pounds is luck.

I think a reworked version of the dementia tax is inevitable, and I don't disagree with that.

Personwithhorse · 05/12/2017 07:53

If people are limited to how much they can put in pension pots they invest in other assets - property and land. Many of us don’t trust investment funds or private pensions.

In the past very few people went to university, Nulabour decided for some reason to make this 50% of the population. Many of the new graduates would be better off being tradesmen/women. Electricians, etc

Add to the mix Nulabour’s mass immigration policy and we have today’s problems.

Ellisandra · 05/12/2017 08:02

How has mass immigration caused the increase in life expectancy without corresponding increase in healthy life expectancy?

IsaSchmisa · 05/12/2017 08:04

They didn't. It was 50% higher education, which also includes HNDs and similar taken at colleges. Common mistake.

Getsorted21 · 05/12/2017 08:06

I think with the school fees it also depends on how many children you have & what point you got on the property ladder. We could pay for 1 as it's a similar cost to childcare but wouldn't then be able to have a bigger property unless we left London.

All of my friends have good jobs & some earn great money as doctors, analysts, engineers, etc. but with the exception of the one who is a millionaire (tech entrepreneur) we think the one who is the "richest" is the friend who didn't go to uni.

From A-levels she went straight into civil service, got locked into the excellent pension scheme before they closed it. Bought a flat in SW London early 20s now has a large house with lots of equity. Her employer then funded her degree. Since having DCs she been able to do 2 or 3 days a week with no impact on her salery or career progression (many of my friends had to give up their careers if they wanted to work pt). Once her youngest is in school she will work more days but less hours & she has something like 7 weeks holiday so is generally sorted for school holidays. Don't get me wrong she's good at her job but we are all like we did it wrong 😆

LondonGirl83 · 05/12/2017 08:07

Personwithhorse your post makes no sense...

Getsorted21 · 05/12/2017 08:13

Re the older generation and their assets I think its very much becoming the case that your life chances will be determined by what your parents had & at what point you were helped. Some of our friends parents have downsized or released equity to help them on the ladder. We have another friend whose mums property is worth about 2m & is far to big for her. They are always around there doing odd jobs but they are starting to get bitter that she's never given them a penny. It's a tough one.

AnnabelleLecter · 05/12/2017 08:16

Any further inheritance we receive will be mostly passed on to DC for help with housing.
We certainly never included inheritance in our retirement plans. I think It's rather ghoulish to do so.
We are 49/51 the inheritance we've received so far have been from gp's when we were in our 20's/30's.
Dps and ILS are all in late 70's/80's and apart from one, all fit as fiddles. I hope they are around for a long time yet. One of my dps lost their DPS far too young sadly.

Bubblebubblepop · 05/12/2017 08:31

I don't suggest they do anything Lizzie. No need to be so aggressive.

I'm just pointing out that in previous generations this wasn't the case. Pensioners either rented or downsized to a "final" home (bungalow or similar)

LizzieSiddal · 05/12/2017 08:45

I wasn’t being aggressive. I was responding to your post....

“Think of all the assets in our society tied up by her generation and older”

I was wondering what your thoughts were about all the assets “tied up be her generation”

Laiste · 05/12/2017 08:48

bubble i do see what you're saying. It's about spreading wealth i think?

My ILs are in their early 70s and have an already big (5 bedroom) house near the Thames which they bought in the early 1970s for a snip as it needed doing up. Their last DC left 18 years ago but they are still enlarging it. God knows what it's worth now. Mortgage was paid off ages ago. It's only the two of them live there. MIL maintains she needs even more space for all the family visits and they are still enlarging it. When we visit it's rarely all at once and only for the afternoon. There are 4 bedrooms sitting there doing nothing already but gathering dust and the massive reception room they've just added on has nothing in it but an enormous table which no one will sit at. They'll never sell it.

It's lovely that they have that option and good fortune and they've worked hard on it, and it's an inheretance for DH ect. I don't want it compulsorily removed from them or anything. I don't know what the answer is, i'm not sure what the question is! I just know it feels odd and wrong when it's a pattern being repeated everywhere and 2 of their DCs can't get on the property ladder.

Getsorted21 · 05/12/2017 10:04

From an entirely selfish point of view I hope my mum downsizes at some point. The idea of sorting through all her stuff fills me with dread. She's getting the Marie Kondo book in her stocking but I'm sure it won't be read!

NeverTwerkNaked · 05/12/2017 10:21

I can’t imagine resenting my parents their own home. It’s not an inheritance to me, it’s their home. What are people wishing for? Their parents to die? Their parents to uproot themselves? seems ghoulish to me.
I’ve lived my life assuming i won’t get any inheritance and valuing my relationship with my parents. I hope they enjoy their old age and feel free to live it as they choose, without children circling seeing them as some kind of lottery ticket

DublinBlowin · 05/12/2017 10:33

Years ago I saw a spreadsheet that indicated how much you had to save to reach a defined annual pension depending on your age.

E.g if like pp you want 40k a year and are currently aged 28 you need to save xx per year.

Anyone know where I can find one? I googled for ages but all the calculators I can across calculated existing pension value

Getsorted21 · 05/12/2017 10:34

never I see your point & hope I don't come across like that. My issue is more old people need to think of the practicalities too. For example my Aunt in law (is that the correct term) has a huge old house in SE London. Her husband passed away 2 years ago but she is still in relatively good health however she is becoming increasingly lonely. Her two sons have settled their families in Bristol & Cambridge as this offered them a better quality of life. She complains that they don't see her every weekend, she's missing out on the grandchildren & thinks they are neglectful. We try & include her where possible but it's hard. Surely it would benefit her to downsize & either help her sons live nearer to her or perhaps just move closer to them?

Getsorted21 · 05/12/2017 10:38

She doesn't understand why they can't buy/afford a house around the corner from her. 🙄

PaintingByNumbers · 05/12/2017 10:49

Meh, it always slightly annoyed me, five of us in a tiny terrace, mil in a five bed detached she can't maintain and cant get up and down the stairs in. Its just annoyance with life, its all the wrong way round - poor and cramped when you most need space and money, rich and in a too big house when old. Or sitting on large amounts of cash that will just go in inheritance tax anyway. That's a critique of society and an entirely logical viewpoint imo. The logical conclusion of my thinking is that my inheritance will go pretty much straight to my kids when they are starting families and I will downsize earlier so my house doesn't fall apart and make my kids worry about me breaking my neck going up and down stairs on my hands and knees.

formerbabe · 05/12/2017 11:01

I completely agree with PaintingByNumbers

burntup · 05/12/2017 11:49

Actually I think when you factor in the fact that over the life of a mortgage the interest paid will often equal or exceed the principal amount then suddenly the majority haven't "made" anything like the amount they think they have on their house purchase.

I find it ridiculous that people are squabbling over what constitutes the squeezes middle (and all seemingly want to be part of it). To my mind you are squeezed middle if you don't get any assistance with anything (ie no tax credits, no child benefit) and are increasingly finding it difficult to pay everything. That might well include School fees. But not everyone will agree with me and it just doesn't matter. Ultimately it's a phrase that lots can identify with. Whether you think I fit in that category or I think you do is irrelevant.

We are all screwed. But not as screwed as our children. Some of my friends children have recently qualified as Doctor's and lawyers. And unless they have substantial parental help they can't afford to buy. Those are the children that academically will have been the achievers at school. They way things are we are destroying aspiration and I think that is the scariest thing of all. What is the point of working hard if it will never pay off. And we need the next generation to work hard to pay for our old age.

Viviennemary · 05/12/2017 12:12

I don't know what you expect your Mum to do Bubblebubblepop. She is 60 and could live another 30 years or more. Sell her house now and distribute that and her savings between you all so you don't have to wait till she dies. But if she keeps on about what a great asset her house will be to you when she dies that would be annoying.