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?

@CurlyhairedAssassin

I work in Singapore a few times a year. There's not really any such thing as 'Singapore Noodles'. Well, not as we'd think of it anyway.

I know what you mean with the quaint notion, though. I was really looking forward to the noodles when I first headed over there.

I noticed a poster upthread complaining that her 97 year old father’s pension was going towards paying for his round the clock dementia care, and his ‘modest’ savings were also funding that care.

What else would he be doing with the money? If he is ill enough to need that level of (very expensive) care, why shouldn’t his pension fund it? Do you think it should be saved for you?

This is the mental block that people need to get over. We need to fund our own care. We can’t ring fence our assets and decide that they are sacrosanct and must be passed to our children. We can’t ask young working people to bear the cost of our care. It’s unreasonable.

This all seems to be assuming full employment plus the new retired. The normal workforce up to age sixty extended by another ten to fifteen years. Going to uni and paying for it reduces the start age for work and they leave with a mass of debt.

It used to be say work 50 years from 15 to 65. The 50 years would now be 25 to 75 years. That gives a retirement age of 75 and say 45 years for a full pension.

The young pay for this shunting process by borrowing at the start of their lives for higher education.

I would prefer it if the truth was spelled out to us from the outset instead of this drip drip drip.

I know we won't have much. But we don't spend on holidays or get loans for new kitchens, but we do have a loan for our car (second hand) because DH needs one for work, and savings get spent on things, for example we needed a new washing machine a few years back, then we had to replace a window and had a leak in the roof and all that together was the best part of £1,000. We desperately need a new bathroom and a new boiler but can't afford it.

I buy second hand clothes and walk or cycle when I can to save money. I don't upgrade my phone every two years, my tablet is seven years old and literally falling apart so I'm not spending on tech.

I will admit to liking avocados, but I never post photos on Instagram

On the plus side, with the increasing retirement age the mortgage should be paid off...

Completely agree @Iamthewombat, What else is your money for at the end of your life?

There you go, Lights. If only you would knock off the avocados, you’d be loaded!

You and Darkclouds raise an important issue about young people (do you mind if I use the term ‘millennials’? I’m generation X and I used to hate that label).

My generation didn’t have to deal with a massive student loan burden. Today, tuition fees are >£9k a year, plus interest, before you even consider living costs. That’s a ton of money.

It makes it harder for young people to plan pensions. Harder, but not impossible. It’s seeing this that makes me annoyed when people of my age talk about crackpot schemes to avoid their elderly parents’ house and savings being used to fund care. How bloody selfish. The millennial generation already have it tougher, financially, than we did. Now some of today’s 40 and 50-somethings want to make it even harder?

I hear that competition for teaching assistant jobs is fierce, because well-qualified women are applying for them.

One reason for this might be that once you've been out of the workplace it's almost impossible to get back in at the same level you left, even with the qualifications. And you certainly can't do part-time, which is all some of us can manage.

On another note, it makes me when people on here go on about looking after your kids (which I found hard, hard work BTW - I'd sooner have had a paid job but there were none around in my field at the time) as if you were backpacking to Malaysia for a year or living on benefits while writing the Great British Novel. I didn't plan on being a SAHM. Circumstances, recession, a less than versatile set of specialisms and the inability to be in two places at once conspired against me. Excuse me for failing to earn money while feeding, shopping, cleaning up repeated times an hour, chasing the bloody primary school admin, going back and forth between home and school.

Excuse Mrs Smith down the road for failing to save enough of her totally non-existent earnings because her mother (who should be in a home but isn't because there aren't enough good ones to go round) has dementia and she needs cleaning up, washing, dressing and feeding several times a day and you can't rely on the carers to be there when they need to be.

Excuse Mrs Jones for not working outside the home because her two sons are disabled and she'd never find childcare for them anyway. But how foolish she is, not saving for her retirement, eh? Maybe she should just have taken a supermarket job and left them to fend for themselves? Or maybe there's a secret supply of time turners in the DWP to enable this impossibility?

I think we've been sitting on a time bomb for a long time and all governments have been facing the fact that interventions are likely to be sufficiently unpopular to render them unelectable.

I really don't want to live past 70 or 75 depending on illnesses. I'm serious and so I always work out that I will need a certain sum for 15 years max from 60, with state pension to kick in at 67.

I will downsize as I have no pension and no plans to get one. State pension is more than out of work benefits and you don't have to pay council tax.

With children out if the way, I don't think it's as bad as people make out.

There is no point me starting a pension even when I'm back in work. As the years I have been part time or as a sahm or carer means I will never amass enough over my lifetime for it to be worth it after fees etc.

I have looked at this a few times and in most calculations, I get less than I put in or the same. Hence, I may as well save when I have the money but it's not more efficient for me to pay into a pension. I have looked into lots of sipp and for the amount I can afford to pay in, even with the 20% from government via tax breaks, after fees, the sums show the potential payout to be far less than I have paid in.

Also they assume 25 years from 67, which does not fit with what I will do.

My money is better off in a stocks and shares Isa.

I would need to work full time now I'm nearly 40 for it to be worthwhile and this will not happen as I'm a carer.

Chopin, I wholeheartedly agree with your post.
So many people do not realise how hard it is and assume every person can work outside the home. For many its simply not possible.
They work hard enough inside the home!
With an ageing population this will only get worse too.

Even if I wanted to work into my 60s and beyond (I don’t) there would not be a job for me in my profession (teacher.)

Everyone over 50 was managed out of my school during a reorganisation several years ago and not a single person has managed to get another permanent teaching post.

I paid my mortgage off in my 30s even though I've never earned more than 16k, I live a simple life. I don't have a pension, I don't trust them, I have invested in other ways.

On retirement I could move to a cheaper part of the country, sell my house and release about 80k. I can live happily on 6k a year, so it should keep me going a while. Plus I have savings and investments. Plus I could rent out a room or two. Plus I have a lot of skills, so a small part-time business could top that up.

Either that or I'll sell everything and live a nomadic life in cheaper countries. I'm not the type to sit around in slippers.

Ageism is an ' ism' that hasn't been addressed in many occupations. Fine for a few actors to still get the parts in their 70s or 80s but once you hit 50 plus in more normal jobs your seen as ' past it' or too expensive or over qualified to recruit.
If they want people working till they are 67 or whatever this needs to be addressed.

I don’t think anyone is assuming everyone can work outside the home. In my pp I acknowledged this... some people are too sick or disabled.

The point I was making (and which Iamthewombat elaborated on) is that in a lot of cases there is a degree of choice about decisions.

When I look around me at work (school) at over half of the teaching assistants are graduates, in some cases actually qualified teachers. Some of them my generation with adult kids. They don’t have caring responsibilities; they’ve made an active choice to do an easier but low paid job because they want to finish work at 3:15 and not have to think about it til they arrive next morning.

Likewise I look around at the female teaching staff of my age, and at least half of them only work part time. Again, not because of caring responsibilities but because they want to.

And of course it’s entirely up to them to make these choices, but what doesn’t make sense is to then be surprised that they have really low pensions. It’s basic maths that the more you put in, the more you get out.

Pensions are an important issue which affect women disproportionately. Men are far far more likely to have financially secured themselves for older age.

Its not as simple as a WOH/SAH issue either, though of course that comes into it, and it’s why many of us continued to work through the early years when all our take home pay was swallowed up in childcare fees. I would certainly have had a far easier time in the short term giving up work completely, because it’s tough getting 3 little children out to nursery, doing a full days work and knowing that you have no more money in your purse than if you’d stayed home all day! It’s about making decisions which factor in the long term as well as the short term.

I agree with pp, pensions are a ticking time bomb. I’ve emphasised to all 3 of my (now adult) children to always pay into a pension, even if they’d rather opt out and have the money in their pocket now.

I'm 32 so a different generation from you op but I'm worried about pensions too. I'm trying to consolidate all my itty bitty previous work place pensions, I'm paying more into my current one too although I only work part time.
My DH is self employed and is sorting out a pension now (he has previous workplace pensions too).
We're also over paying our mortgage with a view to having it paid off long before we're 50.
We're bloody lucky to be able to do these things and I still think we might struggle post retirement. (I am likely to get a generous inheritance but I'm not basing any plans around that).

I don’t recall anybody on this thread assuming that everybody should work outside the home. Those who can, in order to be independent and save for their future, should, for their own benefit. Those who clearly cannot, because they are ill, or disabled, or have to look after disabled family members, get the extra help.

That’s why so many people on this thread have noted that women choosing not to work after having children, or to work part time, or to go into a lower-paying, ‘softer’ job, are doing themselves a disservice.

Yes, it might seem a swizz to spend all your salary on childcare if you have two young children in nursery, and you might reasonably wonder ‘why bother?’, but by continuing to work you not only keep your hand in, career-wise (Chopin notes the risk of leaving the workplace and not being able to get back in at the same level), you keep up your pension contributions.

Also, you never know what the future holds, as many posters have noted. Make hay whilst the sun shines, as the saying goes. How many men leave their wives or partners in the lurch? We hear about plenty of them here. When you are financially dependent on somebody else, you give away your power. In the words of the mighty Fay Weldon: all you have to bind him to you are chains of love and duty, and they are pretty flimsy.

Spot on, Celaeno.

Iamawombat....completely agree, also 47 and wish to have comfortable retirement and am trying to stack it away for the but also have some now. It’s like a seesaw. And what is the right amount......

I’m mystified as to why people are prioritising paying a mortgage off over pension contributions. It seems crazy to turn down free money and pay less tax for the sake of being mortgage free, especially with such low interest rates. The money works much harder in a pension.

@Alsohuman the reason we're also over paying our mortgage instead of putting it all into our pensions is due to how young we are. We're ttc a second child. DH is self employed. What if he ends up with no work? At least if we can release money from the house we wouldn't be destitute.
Once the mortgage is paid off, that whole amount will go into pension (well as long as pensions limits allow).

to turn down free money
When you're self-employed, there is no free extra money going into a pension.

pay less tax
Offset against paying interest on the mortgage, over its term even now good repay double what you borrowed. In addition interest rates will not remain this low, so a big mortgage can be a gamble.

There are also other reasons; for example we decided to have a child. Having no mortgage and no expensive habits means our expenses are extremely low, so our savings stretch and we can afford to have a long time off / very part-time with DS. If the money was in a pension we couldn't access it and would need to work more days to pay the mortgage. The initial few years are very precious, while we can add more money to pensions and our other investments later instead.

When you're self-employed, there is no free extra money going into a pension.

Yes, there is with a stakeholder pension scheme. The basic rate tax relief is paid in to your pension scheme by the govt whether you pay tax or not. Pay in £800 and the govt pays in £200. Your pension plan gets £1000 for every £800 you put in.

Another issue to consider is critical illness or other long-term issues preventing work. Insurance will not cover everything and usually covers the main earner rather than caring for others. If you are lucky enough to have a house you can sell as an asset then you can downsize to access the money and live more cheaply; a very early low income retirement. You can't access your pension without the tax penalty and in some cases high fees.

@Kazzyhoward - with the stakeholder pension, not with other pension options that may be higher yield. Appreciate the financial advice, but that isn't the only route.