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?

NewAccount270219 I do see what you're saying but realistically you'd be talking about saving huge sums of money to have that choice. Let's say the persons rent is £1000 a month (obviously it varies greatly what that would get you around the country!) for them to cover their own rent for 20 years would come to 240k!! My wage is pretty ok but I certainly couldn't save that in the next few years. I did say in the bit you quoted "unless they can save a substantial amount". Because then yes you do have that choice. But I doubt a huge amount of private renters are earning that sort of money or they'd have bought a place.

My 97 year old dad has a private pension and modest savings which are being paid toa care home provider to keep him going with Alzheimer's and dementia.
He was good with money but is now being penalised as are many others with dementia. He didn't own a home and always paid full rent.
Do the right things in life and still get screwed over! He believed in pensions and being frugal.

DH and I are 35 and have never lived beyond our means, relied on loans/credit as described in the OP although I suspect some of our friends do. The only debt we have is our mortgage which we're on track to have paid off by the time we're 50 so I appreciate that we are luckier than most but I do still worry about the future. Mostly because I know from experience in my family how costly care (even if it's in your own home rather than residential) can be and I don't want our DC to have to worry about that.
DH's (private sector) workplace pension is fairly generous but mine (public sector) is less so, despite all the stuff you read about 'gold plated public sector pensions. Two maternity leaves plus working term time only (not a teacher, but no option to work 52 weeks a year in my role) will also have an impact on my pension and we don't have much in the way of savings as we've spent the last few years renovating our home. I'm starting a new job in September that comes with a payrise so I'm planning on putting the difference aside each month. I was planning on putting it in an ISA but this thread has me wondering if it would be better to take out a private pension instead?

Haven't RTFT. Has anyone mentioned the research showing life expectancy has stagnated? I actually expect it to start to fall over the next 20 or 30 years.

I'm genuinely seeing something like dignitas as my best option for the future (I'm in my early 40s and already in poor health), and I suspect increasing numbers of people will do this. It's currently around £10,000, still a lot, too much for many, but much more achievable than a reasonable pension.

I think the increased life expectancy we've seen the past 50 years or so is not only down to medical advances. A reasonable living standard, security of housing, ability to retire and rest an ageing body, all this contributes to living longer. The younger generations won't have this.

Some people are fit and well in their 80s and beyond but many more start to need to at least slow down a little, perhaps go part-time, perhaps be unable to work at all. So I expect an increase in disability claimants with the rising pension age.

Again, sorry if this has already been mentioned as I haven't RTFT, but how do younger people get jobs? If older people aren't able to retire? I guess the think tank's reasoning is unemployment benefit is cheaper than a pension?

That housing benefit bill and care bill is going to be fucking massive once generation rent are too old to work.

If you put it in a private pension you get tax relief in the year you contribute. What you can draw down tax free, when you retire, will be limited: the rest will be taxable income.

If you put money into an ISA, you contribute from money that has already been taxed but when you want to get money out - either by drawing out cash, if it is a cash ISA, or taking dividends/selling shares if it is a stocks & shares ISA, you can do it without paying any tax.

In your position, I’d choose the pension, particularly if you’re a higher rate taxpayer.

This thread moves fast! Answer to Ministerforcheekyfuckery

I am bemused by all the ‘I’ll just pop off when I’m 70’ and ‘I haven’t got a pension yet so I’m going to try Dignitas’ answers.

It is reminiscent of Violet Elizabeth Bott. As other posters have noted, those who CAN save, should. Then the people who genuinely cannot - those who are ill, or disabled, or are carers - get help. I don’t think that sulking or threatening to kill yourself is going to change that basic principle.

I worry what generation Y and Z will do as well since so many rent and will not be able to buy a home. How will they pay rent on minuscule pensions? Most pensions these days aren't great and who knows if the state pension will still exist by the time we get there. It's not just because of ppl being daft and buying stuff they don't need on credit, it's because housing is so expensive and wages are so low for many IMO (not to mention the whole 'gig economy' thing with lack of stable jobs).

People mentioning Dignitas; I think they have quite strict rules about who qualifies unless I am mistaken? So you can't just decide you've had enough or you've run out of money, it's not that simple.

I'm not sure it's Violet Elizabeth Bott but I do think it's a lot of big talk. It's easy to say it when it's still distant. While there have been some tragic recent cases very few people actually kill themselves because they're poor or in ill health (thankfully) - for most people the urge to live is much stronger than that.

Iamthewombat, thank you. I hadn't thought about the tax implications

I'm not a higher rate taxpayer but DH is. Does that make a difference if the ISA/private pension is in my name?

Most people won’t be able to afford to retire. But finding someone willing to employ a 70+ year old will be extremely difficult.

There are also a lot of people who think they will be ok because they will inherit from their parents. What they haven’t considered is that their parents savings will be spent on old age care which is increasingly expensive and not funded by government.

We’re all screwed.

I actually think that choosing when to end your life is an option that should be available. A friend of mine cared for her elderly DF. I can’t remember exactly what all his health issues were but he was bed bound, unable to speak or feed himself. He lasted several years in that state. What kind of life is that? I don’t care so much when I go but `I do care “how” I go. My grandmother got breast cancer at 83 and just declined treatment. I was heartbroken to lose her but 100% respect her decision. She lived in her own home until she died. No dementia or any other illnesses. I certainly haven’t ruled out taking my life at some point in the future. I’ve even discussed it with my DC and they understand. There are ways to do it pain free without needing to go to Dignitas. Maybe I’ll change my mind later, maybe I won’t. But I don’t see that as “sulking” or “threats”. It’s just an option.

In answer to a couple of the questions;

@NewAccount270219, the return depends on the type of house and area you rent out. For example our house we live in, which is a nice detached family house in a lovely area would probably only get around a 2% return. Totally not worth it.

@Alsohuman, it really does add up. Yes, you pay tax on rental income, but you pay tax on any income, so the 20% return becomes 16% when you take the tax off, still better than a pension? So you then invest the 16% in either the deposit for the next one, or paying off the mortgage. And you have to bear in mind I get access to that income now, or at any age I chose with no restriction. I will be able to retire at 50. You also doubt the 7% return, but I get it. As I said, it depends on the type of house and the area you buy in. I also agree with you if your employer is contributing as well as you, then absolutely do that, I have in the past, but I am self-employed now and the only person contributing to a pension would be me, so I believe property is better. With regards to capital gains tax, well you only pay when you sell, and if you have large gains from many years yes you will pay, but remember, you only pay tax on money you get, so you only pay large amounts of tax if your gain is large..... Pension income is taxed too.

@rainandshine52, yes inheritance tax is an issue, but I can give some property to my children whilst I am still alive hopefully to avoid it to some extent, but in any case I would rather pass on 60% of my savings (less the 40% tax) than the lesser amount from a pension pot, which is likely to be subject to tax anyway.

@Ali86 with regard to repairs, yes, of course they need them, but I only buy almost new property, which needs minimal maintenance for quite a lot of years.

Iamthewombat I can't speak for anyone else but I'm not sulking or threatening to kill myself. I'm still trying to turn my life around and have hope for the future. But I'm also realistic enough to accept things might never be ok.

I did have savings but became ill whilst in a long DV relationship, which I've stayed in because of nowhere else to go. I'm in my early 40s in poor health so even if I manage to leave my abusive partner I will likely never be able to build up a pension. I'll struggle to pay the rent in the present. That's the point I'm making, disabled, sick, vulnerable people are not able to save for a future - and with the safety net slowly dismantling, I think people will increasingly consider the least unpleasant option. I also suspect many of those in favour of raising the retirement age are full aware of this.

Quality of life matters. It impacts your health physically and mentally, which is likely why life expectancy will fall. There's a big difference between existing and living. I've long planned to opt for euthanasia or assisted suicide if I was terminally ill, I don't want a long, drawn-out, painful death, especially with loss of dignity. Now, I'm facing an old age (if I make it) of grinding poverty and deprivation, I absolutely would prefer something like dignitas.

Thus thread does move fast! I'm not making my point well. I don't mean dignitas simply for being fed up, I mean that desperate unrelenting poverty with ongoing housing insecurity, inability to afford basic essentials well into older age will impact on your health, leading to the life limiting and/or terminal illness that dignitas accepts patients with.

@Asta19, like you I have huge respect for your grandmother’s decision. In her situation I’d do the same thing. A part of me is rather hoping for that as dementia runs in my mother’s family. No amount of financial security can compensate for that.

At the risk of sounding like an old fart I do think more young people could save for a pension if they really wanted to.
I was talking to my oldest daughter who is married and struggling to get their deposit together to get on the property ladder. She was saying how much easier it was in my day to buy a house and yes it was . I cant argue any different. But I pointed out that we lived in poverty for many years to do so. We had 20 quid a week to feed a family of four at one point holidays were few and far between ( and often involved trips to relatives who lived near the seaside ). and I made Christmas and birthday presents for the kids when things were really tight. But they never missed out on any of the essentials and were fed, clothed and given lots of love. In fact they talk about what a great childhood they had and a lot of their best memories are of simple things .
Anyway I asked her to total up what they spend on mobile phones, take aways, trips to the cinema etc etc and said that if they didn't have any of that spending they , probably could have their house deposit by now .

But the principle holds for pensions and savings as well .What is considered essential by a lot of people now ( expensive phones, sky contract , take aways etc ) are actually not necessary at all and if people prioritised their pension and financial security over them then they would be a lot more secure in the long long term

And before I get jumped on I do realise that there are many people who cannot afford any real luxuries on their income and I am nor directing this at them just trying to make the point that people's perception of what is a necessity is often badly skewed.

My grandmother also declined treatment when it turned out she had a brain tumour at 91. It was the right decision (and the one doctors encouraged) but it was very different to going to dignitas at 75 because you didn't save for a pension.

Ok. So had a look at my nest pension. It said that by the time I can take it out i will have £38,000 in there, but thats from when I started paying in until I retire at 55yo, obviously it'll be more like 67 (70!?) when I retire so will have another 12 years (at least) to add to it on top of that. So say I'll get 43grand from that.
I've decided that I'll save 150pm into an isa When dd (4.5 years old atm) leaves home I'll have more free cash to pay into it.
So will have a retirement pot of aprox £110,000 (in 35 years time)
Sounds like a lot but thats only really 11grand a year to live on up to 77 if I retire at 67! 😱
And I rent!
I reckon I'll just work pt till I drop too.

*and when dd leaves home.

For me it’s not about the pension though. Yes that may factor in to some people’s decisions but money alone doesn’t make you want to live as long as possible. Many older people are lonely and in a lot of physical pain. Having a big pension pot won’t fix that. My time to go won’t be when the money runs out, it will be when I no longer enjoy life. Yes, poverty may push people to feel that way sooner. But I doubt many people will end their lives over money alone. It will be a number of factors.

Ethical pensions have been a thing for years!

My first job back in 2002 didn't have a proper pension scheme so I saw a financial advisor and took out a stakeholder pension. The provider offered an ethical scheme which invested largely in things like renewable energy so I went with that and have been contributing pretty much ever since either to that fund or employers schemes (all money purchase).