To not understand the point of pensions unless you're on a high salary?

[koolkidsss]

My salary is below average, and the 3% contributions are nothing. I know employers have to match it, but I just don't see the point as the sun at the end will probably last less than five years. I know some companies offer excellent pensions but the bog standard ones seem so pointless.

I also dread to think what the retirement age will be for me. I have grandparents who died in their 60s so the gloomy part of me wonders if I'll even live to retirement.

Unless you're going to stay in one job for years, which offers an excellent pension I don't see the point. AIBU?

I think you’d be ill advised to not to pay into a pension OP.
My pension is one of the reasons I stepped back up from part time to full time work when my youngest started school.
I suspect things will only get worse in terms of state pension (which is already pretty rubbish)
I get that it feels very remote when you’re younger, but believe me, your 50s will come round soon enough and for many of us that’s when we realise we want to step back a bit, maybe reduce to part time hours, and the thought of being 60 or 70 and needing to keep working is scary

I get a teacher’s pension and an old age pension. The two combined come to about £1400 a month .

If you don't have a buffer of cash savings and you aren't able to save for a deposit, is it still prudent to save into a pension? I was advised to get 6 months wages into cash savings before locking any money away into pension investments. And as per my previous post, I prioritised money into a S&S ISA to save for the near to med term for a deposit, before I started to save into a pension

Retirement income is absolutely crucial - but money locked away till you're 55 isn't much help if you lose your job and have no cash savings!

thank you lmchlilbob for the detailed and helpful response. You say I can invest 75k from deferred pensions, I am about to receive an inheritance of about 100k would it be better to put 75K in my NHS Pension or invest it in something else? I know this is your opinion only and will seek financial advise but I am interested in your thoughts as you seem to have a good grasp on the pension scheme with the NHS.

You can't put £75k into your pension, the limit is £40k per tax year, or your annual earnings, whichever is lower. We'll, that's the limit for tax relief and I doubt the NHS will let you put that much in. (though you can bring forward up to three years allowances you've not used if you have the earnings to cover it)

You could do it over two years.

But, check the scheme. Additional payments don't necessarily go into the career averaging part and may just go into a separate DC part - a lot of DB schemes have gone that route for additional contributions.
Or you might be able to "buy years".

At age 68 a man can expect to live until 84 and a woman 86.
In the over 80s 1 in 6 will have dementia, so is likely to need care

So, with a pot of 100k, you get 5.5k per year, have 12 years retirement (so, 60k paid back) lose any benefit entitlement and decreasing health, get dementia, give over ALL your income to the state and your house after death and then die.....? Great!

Piss it all up against the wall and have a great life with lots of money, retire poor, get benefits, get exactly same care etc etc etc.

No that is not life expectancy for that age.
And many people who have dementia are already dying from other things. It is common in the latter stages of life.

"A newborn baby boy could expect to live 79.1 years and a newborn baby girl 82.8 years if mortality rates remain the same as they were in the United Kingdom in 2012–2014 throughout their lives."

www.ons.gov.uk/peoplepopulationandcommunity/birthsdeathsandmarriages/lifeexpectancies/bulletins/nationallifetablesunitedkingdom/2015-09-23

If you have got to 68, people will have already died younger. Many people die in their 50s and early 60's.

wheezing
Even DB schemes are ring fenced. Unless the company is committing fraud on a massive scale it can NOT strip the pension.
No,
but they can choose to systematically underfund it for years and years, leaving massive deficits

• BHS
• Tata steel
• MG Rover

and many more but strangely the directors always manage to be in a separate scheme that is magically fully funded

No Jas, I think you'll find council care is not "exactly the same care" as if you had a bit extra to self fund. Council care homes, where they even exist, are ghastly places.

It's actually worth hoping you get proper ill so you need nursing care. Many elderly people are just left alone all day with an hours visit morning and evening to get them up and put them to bed.
Life will be far nicer if you have a bit of money to pay for a better standard of care.

In my LA there are no longer any council run care homes. Out of the private care homes (both res and nursing) there are only a couple I would be willing to place an elderly relative in, and even they are not great.

Whether you are self funding or not you do get a choice in the care home, however if the council are paying and you choose a more expensive care home you would have to pay a top up. If nursing care is required and you meet the criteria for CHC then you wouldn't need to pay. I'd rather take myself off to Dignitas than end up in a care home.

Imo having a mortgage free property and savings is more beneficial than a pension for low to average earners.

Whether you are self funding or not you do get a choice in the care home, however if the council are paying and you choose a more expensive care home you would have to pay a top up.

Which means that actually you don't get a choice if you can't pay. I saw with my grandparents the huge difference it made that they could self-fund and so my grandfather could go in the much more pleasant home across the road from my grandmother's sheltered accommodation, rather than the nearest home that the council would fully fund, which would have been several miles away. I don't know why people resent paying for their care in old age; surely being able to give yourself choices and security, especially at vulnerable times, is exactly what saving money is for?

My mum was in a Barchester nursing home for the last 6 months of her life, it was £1500 a week but she received excellent care, my son said after she sadly passed away last week that he was sad to think of those in her condition (Alzheimer and Cancer) that wouldn't be able to afford that level of care. I asked him to put me in a skip if it came to it, I was only half joking