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 think some folk have their heads in the sand and others probably know there isn't much they can do.

I've always been in a pension scheme but now its on a pt wage. I sometimes wonder if it will pay off in the end. The annual statements are, as a pp suggested, always less than ive paid in already. I do wonder if ISAs and other investments would have worked better but i will never know. All i do know is the future doesnt feel that great for someone who has paid 8% and its been matched funded at the least so hoodness knows what faces those without that option.

@Pineapple1
Not a chance you’re in line for £100k pension.
Are you muddling the lump sum into your calculations?

I'm 56. I left school without qualifications and worked in a series of very low-paid jobs (pre-NMW) until going to uni in my 30s. By 40 I was in a reasonably well-paid job bringing up two kids on my own. I've remained in that job, overpaid my mortgage and saved as much as possible including now 16% of my salary into a pension fund - the legacy of existing on very little money means I can live fairly frugally, though I have spent money on travelling. Through careful spending I've aimed to give myself the choice of retiring at around 63 or 64, with enough of a private pension plus savings cushion to see me through to state pension age.

I do worry, though, about the future. There are things that are completely out of my control - the pension I've been paying into may go bust or underperform massively. And there were reports today that state pension age may rise to 75 for my age group which would put the kibosh on me stopping work in my early- to mid-60s. I can't imagine keeping going for close to another 20 years so I'll just have to hope that doesn't happen, that it's scaremongering.

Hell yeah. I’m fucked. We rent, there’s no way I can save enough in retirement to pay rent

I will be ok. I am teacher but left 4 years early at 56. I have 2 more years then will get £20k lump sum and 7k each year. At 67 I will also get £8k per annum. I have an additional pension I have paid and can draw down £50k. I also own 3 btl I bought partly with inheritance. Two of these will be completely paid off by time I am 67. My own mortgage only has less than £40 to repay and we are overpaying whilst rates are so low. I own 3 more btl with dh. Dh also on final salary pension. We have both gone without lavish holidays and things to ensure when we retire we can afford to enjoy life. I would be surprised if state pension age did not increase from 67 to 69 or even 70. People are living longer and staying healthy. I worry about my children and if they will ever be able to retire. The thing is to start early and keep adding when you can and stay out of debt. I have always preferred to go without if I could not afford it.

The financial services industry has a lot of questions to answer. Number one, in my mind, is why do you not actively recruit female sales people, and train them to explain the investment business to women? I rarely encounter senior female finserv executives, and I manage two (tiny) pension funds. TBH, I don't think there's any attempt to recruit outside their (largely male) comfort zone but women's financial planning needs tend to be too complex to be profitable.

I think going to be tough for some. We’re both high earners and have good pensions but are not taking them early so that we can maximise our lump sums and invest. Mine is a last three years average pension, so ideally one more promotion before retirement. My husband luckily is at the point where he is ill advised to pay more into pension pot, so has been investing in lieu of pension contributions for a few years.

We’ve also got property investments so will be OK.

I don’t want to reduce my standard of living. I don't want limit what I do or worry about bills. I want a nice car and to fly business. I’d rather work longer to allow for that.

The annual statements are, as a pp suggested, always less than ive paid in already.

Sorry to hear this, it must be very frustrating as it means your contributions went in at a time when the stock market was high, though there is some variation between pension provider performance so it could be worth checking average returns and switching schemes if yours isn't good (depending on costs to switch). If you can in future, it's useful to increase contributions specifically in years when the FTSE100 Index is low, so your contributions buy more and increase proportionally.

It's also very important to check your pension lets you choose the year you cash in or take the annuity to reduce the impact of bad stock market years at retirement age; my pension covers this by gradually shifting funds into safer assets over a period of time, but friends of my dad really got screwed over in a bad year so it's worth everyone bearing in mind when you look at your pension's specifics.

If you claim carers allowance you automatically get a free pension credit.

I’m of the millennial generation and I never stop worrying about my future and the future of my (hopefully) children. I have posted before, but I do pay into my pension and despite what my gen are being constantly accused of I don’t and never have taken out loans or finance for clothes/holidays/home renovations/avocados.

I actually find that it’s my parents generation who feel more entitled to ‘luxuries’ than I do. Me and DH said that we weren’t going to go abroad on holiday next year, because we had our honeymoon this year and we want to start overpaying the mortgage more. Both sets of our parents were kinda horrified by this and despite remortgaging for home renovations this year my mum is insisting she ‘needs’ a holiday to the Maldives. (They’ve been abroad 4 times this year). My dad simultaneously claims that my generation are spoiled and expect the world handed to us, yet also think I should be travelling the world and living the high life rather than settling down. My parents think I’m boring! But I know lots of my friends parents think the same. I don’t actually know anyone whose parents have encouraged them to overpay the mortgage or pay more into their pension, but I do know heaps whose parents (and see them post on here) think they shouldn’t tie themselves down too early, should travel etc etc etc.

Its hard when the world constantly wants you to buy new cars and new clothes and new furniture to resist. I can see why lots struggle and prioritise the now over the future because nice things are so in your face all the time and there are so many competing expectations.

Anyway that’s just the ramblings of a millennial

I think @Pineapple1 has got this very wrong, unless their salaries are effing huge!!

This is a terrifying situation for young people. I read that for the majority their pensions will equate to half their salary. But if they have been renting all their lives..... their pension will only cover the rent.....so they starve? There's no way any government could pay for this huge housing benefit cost. So I suppose, work until you drop dead. Not a lot of fun if you ain't rich - but that's the way it's been for centuries. We need a new world order to overcome this nonsense. Life should be wonderful, not slavery.

I just rechecked it. My values were wrong yes.

It actually shows £69k per annum if I stick as a normal pay scale teacher at current pay rates. Or £80+ if I move into senior leadership.
A basic headteacher wage for 20years will return over £100k per annum.

I agree, I'm a millennial who only has a student loan and a mortgage. Wouldn't ever buy anything on credit or take out any other loans for luxuries. Won't even go into my overdraft if can avoid it. In my case its how my DF brought me up so I don't know if this is typical for my age.

Nobody will have £100k a year. The maximum pension pot allowed is £1 million, which yields £45k.

How much are you saving each month @Pineapple1? I really can't see how you'd get an annual pension of £69,000!

I think I might go into teaching if that the case! I've still got more than 25 years plus to work

@SnuggyBuggy you sound very alike myself, if you don't need debt don't bother. Other than our mortgage we don't take loans.

@Pineapple1 your figures are making no sense, are you even making £69k a year now? I assume not if not senior, your pension isn't going to be higher than what you're earning now.

I'm just using the teachers pension website.

The contributions are not small...

I am a WASP. I was expecting a state pension at 60 but now have to wait till I am 67! I feel robbed as the changes were made without enough time for me to plan an alternative.

For those that will be mortgage free how much monthly income do you think you would like/need when you retire?

Those in a couple do you think it is true that two can live as cheaply as one?

I think 2.5k per month so 30K per year would be ok for a couple. I would also like to have a lump sum put away for emergencies.

Don't you get annual statements @Pineapple1? Look at those. Not the website!

@Belindabelle I think if we've got the mortgage paid off and our own private pensions we'll be ok. Under £25k definitely (maybe even under £20k). If state pensions still exist then we'll be even more ok, but we won't be holidaying all the time! We'll probably have to manage without a car. Home maintenance will need to be saved for.

We'll be ok together. We'd be in a rubbish situation if we split up.

2.5K sounds a decent income. We also hope to downsize in our 60s as we've both seen relatives make the mistake of staying in homes that aren't suited to their needs as elderly people.

@pineapple
I think you are misreading the figures my Dad was a headteacher for 20 + years. He does not have a £100,000 a year by a long way and he was under the more generous Final Salary calculation.
I believe the formula is salary x years of service divided by 80.