To think that a lot of us will be in trouble when we retire...

[Fleetheart]

This generation seems very unlike the previous ones in that we take out loans for everything, buy holidays on credit, kitchens on credit, new clothes etc etc. And pension schemes are getting less and less generous. And most of us don’t understand them anyway. I’ve always earned well, but have split up from partner, so still have s lot on my mortgage, no savings, and really not very much in my random pension schemes most of which are money purchase schemes and won’t pay a lot. And I know many people of my age (mid 50s) who have no pension at all. And meanwhile the govt is being less and less generous. What will become of us all?

I agree mould - the ageing demographic is a major cause of the problems facing Millenials (age 22 - 37) in their future. I am an older Gen X and should be sort of Ok but will definitely end my own life if I am uncomfortable. My DC know this and accept it.

I have a one bed house!! When I was looking after downsizing from large family house, I recognised that flats had huge maintenance costs attached to them. Some of the 2 bed flats had £155 a month costs on top of mortgage payments.

Those costs have to be paid every month, long after your mortgage is paid off and would be very difficult if you have to give up work early/are drawing a pension.

The answer is to try to encourage immigrant families whose birth rates are higher into the UK, and provide a more restrained health service to older people. Not exactly election winners

@TheVandalsTookTheHandles re Government Gateway, it was a while ago but I think that’s where you start, sign in to the Gateway (do a screengrab as, if I recall, they use different words once you sign back in, so for example they ask you for a username but then refer to it as a login name next time, I remember it being less than intuitive! It may have changed now) but you have to set up the Gateway with your NI number before you can go further

Luckily PIL and dh nan are leaving us their houses so we won’t be homelesss and won’t have a mortgage.

Thanks, @namby, I can see that my LGPS is not so bad in terms of contributions then! However it is NEVER going to pay out £39k a year like @blue25, I’m going to assume that your salary is over £100k, Blue, for that to be the case?

@Rickandportly that is a very dangerous game to play.

I would really advise you to have a pension/savings to protect yourself.

If you and DH divorce before anyone dies, you will get SFA of that money.

If PILS or DH nan need expensive care then again you are looking at a greatly reduced benefit, even if you are still together.

What if one PIL dies and the other remarries someone and leaves everything to them?

I have seen all of these scenarios play out, it's a real possibility you need to face.

My pension is LGPS, I won't share the figures but it is projected to be almost 2/3s my salary.
DHs private pension (additional to his work pension) which he pays the same contribution I make to mine is projected to around £700 a year.
LGPS while it is now career average and not final salary is still extremely good.

If I had plenty of money I might have paid into a pension. Unfortunately with the rise of greedy employers, zero hour contracts and agencies who pretend you’re self employed so they don’t have to give you any paid holiday or maternity etc - I barely earned enough to live never mind put some away in a pension. So I don’t have a pension but there’s nothing I can do about that. There’s no point in worrying about something I can’t change.

I'm in my late 20s, and I do think it's really tough for people of my generation. It's all very well saying a pension should be a priority over even buying a house- but renting is very costly (as is having to move regularly) and can lead to people getting in a bit of a cycle of debt. My first priority is to buy somewhere to live for the quality of life benefits in the meantime.

In terms of pensions, I did pay into a pension scheme for a year and a bit at a previous job, and then I decided to career change into being a teacher. I'll start my NQT year next year and will obviously be paying into a teaching pension then. I can't really imagine myself teaching in my sixties, but then I can't really imagine what the world will be like 30-40 years from now anyway!

I do think using property as a pension is a risky idea (unless you are able to buy lots of properties)- people say they will downsize, for example, but that can actually be quite tricky- there are not that many smaller homes available to buy, and competition for them between first time buyers, investment landlords and downsizers is fierce in some areas! It can also be hard to find a home that's suitable for an older person's needs if e.g. they have mobility issues and most older people don't want to move areas away from their support network. Equally, to sell a property or rent it at market value, it usually needs to be in a reasonable state of repair- which can be hard to maintain as you get older.

I don't think house prices will crash- but I do think we are going to see a bit of a leveling off and maybe a slow decline in house prices. People in my generation struggle to buy, not just because of deposits, but also because of affordability criteria. If you are a single person and only allowed to borrow say 4x your salary, that really limits what you can afford. At the moment, there does seem to be a bit of a political shift against landlords and second home owning, so this may also have a bit of an impact on prices.

The thing I do have in my favour is that at some point I may get some inheritance from my parents (they are home owners and have decent savings and a range of investments). I'm not relying on this, as I know one/both parents may need care or they may need to use these assets to fund their own retirement- but it is a possibility.

I think this could end up being the big driver of inequality later in life for my generation- those who are able to inherit something, and those who aren't. I know quite a few people who have parents whorent or live in council houses, or who don't necessarily expect any/much inheritance due to their parents being in debt, or due to things like family breakdown where parents have remarried and so on. And, if the current situation continues, there will also be people who's parents assets are used to pay for care and so on.

I think it's a complicated situation with no easy answers, and I do agree that part of the problem is people living for longer with increasingly complex health needs- but I don't think the answer is taking steps backwards in medical science!

Gin96 you do realise that a lot of us can't afford to buy? The rental market is HUGE and increasing and those people renting are going to be old one day...

@curlyhairedassassin the reason public sector pension schemes are better than most private sector schemes is this: public sector schemes are defined benefit in nature. You know exactly what you are going to get at the end, whether they are career average or final salary. Your employer bears the risk. They have to pay you x%of your salary until you die. Their problem to fund it.

People in defined contribution (or ‘money purchase’) schemes bear the risk themselves. Your funds don’t perform? Your problem. Low annuity rates (if you are planning to buy an annuity...I wouldn’t. They are only worth it if you are an overweight male heavy smoking alcoholic with a family history of strokes!)? Your problem.

I’ll address the myth that public sector workers get better pensions because they are paid less than private sector counterparts. What a laugh.

I worked in the public sector for eight years, until I could escape. I was well paid. Truthfully, better paid than I deserved to be, and better paid than I would have been in a private sector role, for less work. In that time I racked up £19k, in today’s money, of annual pension payments, in final salary and career average schemes, payable at state pension age.

It’s not just my personal experience, though. I worked with LOADS of people who were lazy and incompetent, but believed that if they were in the private sector they would be earning twice as much. As if! Some of them could barely construct a lucid sentence and wouldn’t have lasted a week in a FTSE 350 company. That didn’t stop them regularly whining that if they worked in Company A they’d be earning at least £80k, blah blah. I called one of them out on it, once: I said, why not apply for a job there? He didn’t, of course. The excuse he gave to save face? The pension in the civil service was too good to leave.

I think some people on this thread are misinterpreting a previous poster's point about the care home you end up in- I don't think they were saying that people always end up with abetter quality of care if they pay privately.

I think they were saying that yes, you may end up in the same care home, but most people don't go directly from retiring into a care home. For a lot of people there will be 15-20 years + in between of being a relatively healthy adult with no actual care needs, but who might struggle to work (or get work) even part time. And planning for retirement is more about planning for how comfortably you will live in these years, as well as how early you will be able to retire.

@iamthewombat You were very well paid then. You must have been in about £90k pa. Most people in public sector are not well paid.

I stead of saving we put every spare bit of cash into our offset mortgage. We now own our home and did so at age 35. So if nothing else we have a roof over our head. Once that was done there was options for hubby to join new government initiatives to open a LISA and join his new workplace pension. I’ve always had a decent work pension.

I would always save and buy. I HATE paying interest. It just lines the pockets of the already rich.

"Most people in public sector are not well paid."

I don't agree with that. No, most people are not on the big bucks you can get in the private sector, but in many areas the public sector is the best employer for ordinary people. There are automatic increments and a good pension. Getting a pay rise other than the increment can be difficult as it requires a change of band usually, but it's a decent wage for the work people do, at least at the bottom.

" I recognised that flats had huge maintenance costs attached to them. Some of the 2 bed flats had £155 a month costs on top of mortgage payments."

This is what the management companies charge, rather than the actual maintenance costs I think. It's quite a scandal. In other countries, the flat owners form a co-operative to deal with it themselves.

"If I was that elderly person, I'd rather more public money had been put into my education, healthcare when I was younger, support to help me raise my kids, rather than being spent on keeping me alive in a nursing home an extra 5-10 years."

Are you sure about that? Unless you're in terrible plain, you may not be lying there saying 'let me die now'. It might be a much scarier prospect when it comes down to it.

I totally agree with Kwest.
I dont see many poor OAPs these days.
Yet they have the knack of pleading poverty.
I have actually pointed out to a few who were doing just that.
They soon shut up.
If I do struggle I will be looking into renting a room out.
I also read today the government are thinking of putting retirement age up to 75yrs
Ill be dead by then,and that's quite possibly what they want and hoope for.

I'm not sure putting retirement age up to 75 is a good idea, really. There are plenty of jobs people just wouldn't be able to do at that age- and also people who won't be capable of doing any work- so they will end up on some other kind of benefits instead. I imagine the cost savings will be minimal- and the burden may be put onto companies/organisations to force people out through incapacity.

Having people stay in work for longer tends also to be bad for youth unemployment/under employment.

You don't see many poor OAPs these days? Probably depends on your social circle. I know plenty. They all live in rented accommodation and don't have much money. My FIL was in this category and we had to help financially as otherwise life would have been very grim for him.

Can you imagine teaching teenagers at the age of 74? Or working in a marketing job. I’m struggling with ageism at the age of 53, never mind being physically and mentally slower as we age? It’s all very well for us to keep on working, but employers have to recognise the value of older people is in their stamina, conscientiousness and sense of perspective rather than expecting us to compete with 30 year olds!

But I have been very poor in the past and can manage it again if I need to. Lack of social care frightens me more. My DP is disabled and can't do various things. I also look after a relative with schizophrenia. Social care won't pay for what they both need. So if I can't manage to do it any longer, that will be three of us in an awful situation.

And the truth is any increase in retirement age will only affect those of us who are poorly off. The middle class people I know will all retire earlier anyway. Already see people retiring in their late 50s after they have inherited.

Not every one is like this. DH both have good pensions and a "saver" attitude. We watched friends spend their 20s going on endless holidays, buying luxury brand cars on finance etc. We saved and bought a modest old second hand car.

I'm sure friends think we don't earn that much because we live relatively carefully. I don't spend huge amounts on manicures and getting my eyebrows done, we don't have gym memberships, we cook fresh. Like our parents, we save, should be comfortable in retirement and hope to be able to contribute for DC university etc.

I laugh at all these people earning 30k and spending 100s every month on car finance plans for audis/bmws/range rovers

Can you really get a Range Rover on finance if you earn £30K? Incredible

I laugh at all these people earning 30k and spending 100s every month on car finance plans for audis/bmws/range rovers

Depends on your outlook. Good health in retirement is abit of a lottery, perhaps they want to enjoy life now. If everyone saved their disposable income the economy would be in a dire state as nobody would buy anything except food and occasionally clothing.