Please tell me I am not the only oldish person without a pension plan

[QuentinLettsisAbitofAtool]

Not a TAAT well it is a bit but sod it

I'm having a bit of a panic attack brought on by the MN survey about pensions. I don't have one, have a big mortgage, not due any parental inheritances and am in my 50s.

Please tell me I'm not alone as that might make me feel less dumb!

Oh and I put "oldish" in the thread title because I mean old in terms of a pension. Twenty somethings who don't have a pension don't fit my criteria!

Olivers If you can't afford to pay into a scheme you need to make sure you are making your NI contributions so you get the full state pension.

The next biggest thing to do is secure your housing. Get into a HA home so you have a secure tenancy. Once you are 55+ you can apply for the 'retirement' communities which have much more availability compared to regular HA homes. It's well worth doing this because the rents tend to be lower. Don't do shared ownership either.

Each week save what you can. Even if it's £1-2, it's something. Put that money into an ISA so the interest earned isn't taxed.

It is much easier to plan for the future if you have money in the first place. An IFA can advise but they cost money.

As everyone's financial circumstance is completely different I don't know what you do to find the best course of action if you don't have a lot of money and no pension. I think there is a government site which is free that advises on pensions but I think you need one in the first place.

Thank you for all those explanations @Alaskansnow👍

want2be
Each week save what you can. Even if it's £1-2, it's something. Put that money into an ISA so the interest earned isn't taxed.
Incorect
All interest under £2000 a year is untaxed in the UK anyway
and to go above that means having a LOT of capital
Cash ISAs are an irrelevance now.

Get into a HA home so you have a secure tenancy.
Ha ha ha ha ha
Ten year wait for non disabled non pensioners rouud here
and the government are not building more

oliversmum What happens? Nothing - you only get state pension.
But if you work for an employer earning over £10,000 per year then you would be automatically enrolled and you would pay in 3% of your "qualifying earnings". This is everything you earn over £6032. Or £464 monthly.
So on £10,000 salary your contribution would be £9.91 per month. With the tax added that goes up to £11.89, and your employer will put in 2%, which is £6.61.
So for you paying in £9.91 you will actually get £18.50 going in each month.
That is why if you can join, you should.

If you earn over £6032 you have the right to join the scheme and your employer HAS to contribute.

justkeep
The thing to bear in mind is that when the pension age was set at 65, that was the average life expectancy. Half of all people died before pension age.

Pension age has not kept track with life expectancy.
Non manual workers can easily keep going into their 70s
and should do.

Once you are 55+ you can apply for the 'retirement' communities

I read this and looked on my HA website out of interest and they advertise them from 50+ so now I feel really old
In my situation though I think financially I'm better off staying where I am and getting a lodger.

I have no intention of paying more money into government schemes or going onto any HA schemes. Unless they have any in Southern California or Marbella.

I am planning on not living in the UK at least full time for very much longer.

I have seen too many people (including ILs) who have got to 65 and found the pension they were promised wasn’t there or a fraction of what it should be.

I would rather be in charge of my own destiny.

I am nearly 60 but I don’t think my Ds 16 and dd 19 who both live at home would be very at home in a retirement complex

An IFA can advise but they cost money. They take their fees from the policy, so you don't actually have to pay it up front. They explain that really clearly too!

And they are free, if you just listen and take their advice elsewhere, or not at all!

IFAs are no longer allowed to hide their fees in the policy
GOOD ONES take money up front

Equity releases are just awful. Never do one. Sell the house and release the cash.

Utter garbage, and terrible advice. Lots of people as they get older don't want to move, the house holds too many happy memories. So an ER allows them to stay in the house they love, and have a decent amount of money to make the final years of their lives comfortable. ER schemes are like anything, there are good and bad ones.

If you do your homework and get the right deal, they can be fantastic.

But they aren't the right thing for everyone.

storm get your name on the list and then you have a choice. Lodgers are pains. As you get older you might value your privacy more as you deal with aging. Also, the best part about renting is that you don't have to worry about the expensive maintenance of the home. Boiler breaks, it's the HA who pays for it to be fixed not you.

Lots of people get to the age where selling and moving is too much for them to cope with.

@Craft1905
If you do your homework and get the right deal, they can be fantastic.
Please name a reputable firm that will not be linked to mis selling within the next five years.

Talkinpeece, so non manual workers should be discriminated against, paying more years NI for the same pension whilst manual workers get to enjoy their retirement.

What about people who’ve done a mixture of both? Or are you suggesting that manual workers suddenly find them selves an office job.

Totally unworkable and very very wrong.

I have seen too many people (including ILs) who have got to 65 and found the pension they were promised wasn’t there or a fraction of what it should be.

Totally agree. Pensions are a gamble.

Craft Staying in a home you can't afford just makes the hole you are in bigger and more expensive to get out of. Yes people get attached to their home because they see it as emotional when they need to think practically. An equity release is an extremely expensive form of borrowing.

I have just worked with and supported elderly relatives to go with an equity release plan.

They have no children, are late 70's, relatively fit and healthy but don't have enough money to 'enjoy life'. An extra £10,000 a year will make all the difference to them.

Of course, the interest on the money they have drawn will need to be settled following the death of the final one, but the equity release plans now ensure that this debt would never be greater than the value of the property.

My DC will be their beneficiaries, and of course, this will mean that there will be less (if anything) left for them. Who cares?! If it makes the latter part of someones life easier and more enjoyable, as a family we cannot possibly resent it. At the same time, we recognise that they needed proper advice and went through a reputable company. And this company needs to make a profit - can't object to that.

In the right circumstances, they can be a real benefit!

My pension is tiny - will pay about £30 a month. DH's is slightly better. Neither of us have defined benefit/final salary/public sector pensions. We own our house and our plan is to sell or rent it and move somewhere cheaper. There is no other option.
But the more immediate fear is even getting to pension age while being in work. I don't know anyone who's made it that far without being made redundant, eased out in their 50s, etc, and then they can't get another job at all, never mind keep working until they're 70.

@Craft1905 If you do your homework and get the right deal, they can be fantastic.

Please name a reputable firm that will not be linked to mis selling within the next five years.

None of the flat rate charge schemes will be linked to mis selling, because they are transparent and clear.

They pay you up to 50% of you house value, which is then a loan with a fixed % added (3% is common) compound, to be repaid from the house value when you sell or if you die and the house is sold.

So, £200K house, you get £100K cash. After a year you owe £103K. In 2 years you owe £106090, then £109273.

But...if your house increases in value by more than 3%, the loan becomes less than 50% of value.

So after 5 years you owe about £117K, but your house, which was worth £200K is worth £250K, not £234K. Meanwhile you're enjoying your £100K and paying nothing back, and living in the house you love.

It's a good deal for you, and it's a good deal for them, getting 3% compound for no risk in today's climate of low returns. Win win.

Even the bad schemes are likely to avoid mis selling. Mis selling isn't about bad value, it's about hiding the fact. If you sign up to a bad deal, but all the info was given to you, that's not mis selling. It's mis buying!!!

I don’t have one as I never had enough spare money to put into one. I guess I will be working til the day I pop my clogs.

@Craft1905
Please name one of these fabulous firms who only have the interests of the elderly at heart.

ajandjj
Who did you use?

Surely if there are good firms out there people should be happy to recommend ?

daisy That is something I am very aware of. I've seen those who are 50+ pushed out of good jobs and replaced with someone younger who is cheaper. It's very difficult to keep hold of a well paid job in the private sector once you are 50+. Also, ill health seems to arrive when you are 50. So many people I have known have their first health issues in their early 50s that leave them unable to work.

Craft what happens if the value of the home drops in your example? So the house goes down to £150k. Don't the pensioners need to repay £25k of the money they have borrowed? They can't earn, so where do they get that money from?

Instead they could sell their £200k home. Invest the proceeds and get a 5% return so £10k a year income. They move to a 55+ HA property and pay rent but no maintenance costs and they don't have to worry about adaptations once their mobility decreases. HB can help with the cost of rent. It can't help with the cost of ownership.

Given the choices I know exactly what I would choose and it wouldn't be the equity release.