To think we’re sitting in a pensions time bomb

[Iwanttobe8stoneagain]

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.

Qualified doctors and lawyers can definitely afford to buy - realistic expectations is what a lot of young people need and adjustment of lifestyle choices!

Most people, let alone FTB, don't live in £400K+ properties, London or not. Most people have to save up a deposit and rent a room in a house share/live at parents' while they do.

This thread is making me quite glad i’m Not a baby boomer. Imagine having your chikdren sitting around wishing you would die so they can get their hands on your home and money

I find it really distasteful that some people would like their relatively young parents (60's) to essentially sell up the family home/to realise their main asset in order to gift money to them for a house.

There's a lot to be said for disincentivising work ethic and ambition because you live your life anticipating an inheritance (that may never come to fruition).

Qualified doctors and lawyers can definitely afford to buy - realistic expectations is what a lot of young people need and adjustment of lifestyle choices!

Some certainly can. But do you know how much variation there is in what qualified lawyers earn? What do you reckon someone 2 years PQE doing crime in London gets, for example?

Also re downsizing, it's much better for a person's long term prospects to do it well before they have to. 60s is actually a pretty good time to start thinking about these things.

Probably very little at all Isa but they must have known that when making the choice to go into that area?

Its a nightmare trying to help a stubborn 79 year old downsize, thats for sure.

Quite possibly isa but if so it should be their choice, not because their children can’t wait to get their hands on their money

They may well have done nevertwerknaked but that's not what was being discussed. There's such a wide variation in what qualified lawyers earn that, when someone mentions qualified lawyers they know who can't afford to buy, saying qualified lawyers can definitely afford to buy is not an appropriate response.

I don't see why 60 year olds and older should have to downsize if they don't want to. But I agree if the problems of them living in a large property means they are short of cash or the place is falling into disrepair then of course it's a problem and usually left for their offspring to sort out. I spoke to an elderly lady complaining about not affording her heating costs and being cold and she lived in a huge house. Well there's no point in that but what can you say as I didn't know her very well.

So only highly paid lawyers & doctors should hope to buy in London?

what do the teachers, nurses, police do? Pay ever increasing travel fares to commute in. If I was them I wouldn't bother with London but go to another city.

I know a lawyer on 50k & one on 250k.

I think the issue is it’s not that easy to downsize. Moving costs money, there is a lack of suitable properties and let’s face it your house is probably the safest place to park your money. In most parts of the country, if you’d downsized ten years ago and stuck your surplus cash in a bank you’d be much poorer than if you’d left it in your bigger house.

I imagine any inheritance we get from y parents or in-laws will go straight to the kids.

Most lawyers I know are on well south of 50k. I'll never earn that in my specialism. Mind, we don't live in London.

I think I'd be very comfortable on OP's pension of £11k plus state pension, especially if my mortgage was paid off! DH and I have had to retire early due to ill health, but being in low paid work all our lives meant we rely on pension credit. I had to leave work several years ago aged 59 due to an injury and we have been claiming pension credit and PIP since then. DH and I have never earned more than minimum wage and so we could never afford to pay into a private pension, and none of our employers have offered one. Our income now is about £24k a year in total between us, although our living costs are higher due to being disabled.

But when I was working we had to manage on a lower income than that, plus I had to pay council tax and commuting costs as well. So we are used to budgeting for a low income and we have no problems paying for the essentials, our low-cost hobbies, day trips and budget holidays. We are lucky that our mortgage is paid off, though it required years of frugal living and long hours on a low income, so even with lower house prices it was a struggle back then. Nobody knows what kind of government support will be available in future, but we have found it manageable on what is currently offered.

Man can be really strange at times. I remember the outrage on here when the bedroom tax came in with cries of why should the poor be forced to downsize their council house. Why should they be forced out their home, area and leave all their precious memories. But it seems if you have your own home none of this counts as we are just hogging resources and should be selling up for the greater good. Forget the fact that for years now are retirement savings have produced fuck all in the way of an income we should still be giving away the one secure thing we have left all because junior wants it now.
How many of you with parents or a parent left in a large house are willing to care for them as they age and have health problems? If their house is too big and yours too small have you discussed selling up and moving in with them and creating a granny annex with the proceeds of sale of your house? Or do you just want their money and theylive out their days in a flat somewhere and if they are good and don’t intrude on your life you might visit for tea once a month?

I am 71 - have a smallish state pension of circa 8.5K per annum and an even smaller annuity of 4K which was funded by my own contributions (nothing to do with the taxpayer) but I can manage with one small holiday a year, paying council tax, insurances and the rest and running a small 12 year old car.

We should all save to be self-supporting in our old age - if at all possible.

Well you aren't self supporting are you? Your 4k a year won't fun even half your existence! You are totally reliant on the state.

I'd put good money that there won't be even 8k a year state pension for people under 30 now.

The state pension is contribution based. You pay in and you get out. If you don't pay in you don't take out. It's not like other benefits dished out to everyone whether or not they've contributed anything at all.

Clueless question from me then vivienne what happens to people who are unemployed etc when they reach retirement age? What do they live on?

I am mortgage-free have some savings and reckon I will have about €1000 per month when/if I retire. That is plenty to live on, day to day, where I am located, in Europe. Remember that your expenses will drop, too. Less petrol/fewer fares to and from work, no need for 2 sets of clothes etc.
BUT the killer will be finding €400+ per month health insurance.

I'm pulling out of my work pension in 2018 because proposed (an inevitable) changes means I'll be guaranteed nothing in retirement. Even if the pension pot performs well, I'd still be looking at an income of about £3,000 a year.

This is in comparison to colleagues in the later stages of their careers who have a retirement income close to final salary to look forward to after they've had a pretty cushy working life (jobs for life, much less surveillance, cheap housing etc.)

It hurts and it makes me very angry.

I think a mass exodus from my pension scheme is the only way to get my employer/the pension scheme to pay attention and halt the changes. But I don't see this happening.

So I'm withdrawing and investing the money elsewhere for me rather than propping up other people's cushy retirements.

“Clueless question from me then vivienne what happens to people who are unemployed etc when they reach retirement age? What do they live on?“

You need to have worked around 30 years inorder to make the contributions towards a state pension. If you haven’t worked that amount you will get pension top up benefits. But it may not be as much as the state pension.

The reason is the annuities are an annual or monthly payment for life, and life expectancy is getting much longer. If you retire at 65 and live 30 years, divide that 300k by 30 and you don't get much more than 11k assuming the pot goes up over that time from returns.

The answer is probably that people will work part time and for longer.

People who have been unemployed and on JSA will get their NI contributions credited. SAHM's will get some contributuions credited for years they spent at home doing childcare. Other people will get topped up or given Pension Credit. So really hardly any difference between people on small private pension and have worked and saved than people who haven't worked or only done a few hours. Except people on Pension Credit will probably be better off as they will get rent paid and so on.

@Olliegarchy99 thanks so much for your and your advice to cut our cloth.

So you have £4K on top of your state pension and it sounds like you own a home outright.

Would care to come back and give details of the cloth cutting for those who don't have an additional £4K annuity, and who rent?