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?

DH and I both pay what feels like an awful lot in pension per month, but to theoretically quite good schemes (we're a teacher and an academic). It only recently dawned on us that this is why we have so much less spare cash than almost all our friends, who earn similar salaries but take home £500ish a month that we don't because - it emerged in a recent conversation - almost all of them have no pension (we're 32, btw). I hope DH and I are making the right long term choice but I am a bit worried that the schemes will collapse or just be totally devalued in the meantime and we'd wish we'd just spent the money now.

I have no pension.

This isn't new, you have to provide for your retirement. My generation probably won't even get a state pension and yours had the advantage of much cheaper property to invest in. We're in our thirties and we have no debt aside from our mortgage, which will be paid in full before we retire. We both worked two jobs for several years to get on the housing ladder, and waited until we had a property before having children. My parents (your generation working class, no higher education), have no debt at all, good pensions and own a property. All from working hard and bring sensible. Your generation has had financial advantages ours hasn't, so excuse me if I don't get my violin out.

What would happen, Missconduct, if no one wanted to buy shares in things which kill/wreck the plant? Many large organisation/banks/churches abstain from making money by investments in things which are morally abhorrent. Are you saying that what they are doing is pointless?

It's pretty pointless in terms of actually hurting the companies.

www.marketwatch.com/story/the-big-snag-in-ethical-investing-2017-09-14

The key point, however, is to acknowledge that it shouldn’t be taken for granted that socially responsible strategies are “doing good.” In reality, some strategies may have little or no impact, and each should be evaluated on its own merits. And because socially responsible strategies generally come with a higher cost to consumers, investors should carefully consider both the true costs and benefits of any given strategy, as well as the ways in which a strategy fits within their broader moral perspective, before deciding to become a socially responsible investor.

@EmeraldShamrock Thanks for your comment, makes me feel a little better. I did things the wrong way round and had a child before getting myself a good job. Worked a couple of crappy minimum wage jobs but I now have a good and stable position where I'm training to progress.

I pay £55 a month into my work based pension at the moment, though obviously that will go up as I move up the pay scale

We're facing the same set of problems in the US if it makes anyone feel better.

www.cnbc.com/2019/04/01/theres-a-retirement-crisis-in-america-where-most-will-be-unable-to-afford-a-solid-life.html

All that will happen OP is you will be poor. It is simply not true once we moved beyond basic subsistence, that most people worked until they dropped. Most people worked until they could not, and then were very poor. Employers will simply not employ people who are not capable of delivering what other staff are.

Anyone know what a nest pension is?
I pay into that via work and employer pays too.
I have some savings and plan to keep that up.
Work full time and I'm 33 so still lots of time.
Also, for the 'state pention' (what I've payed NI into) do you still get that if you've got savings or does money get deducted from that depending on pension funds/savings?

@NewAccount270219

It only recently dawned on us that this is why we have so much less spare cash than almost all our friends, who earn similar salaries but take home £500ish a month that we don't because - it emerged in a recent conversation - almost all of them have no pension (we're 32, btw). I hope DH and I are making the right long term choice but I am a bit worried that the schemes will collapse or just be totally devalued in the meantime and we'd wish we'd just spent the money now.

DH and I are much older - late 50's for me, early 60's for him, and we have done the same our whole working lives. It's really added up over the years, to the point where we're not particularly worried about having enough to retire. As we've gotten older we've moved more of the money into more conservative investments. I don't know much about pensions in the UK but I assume that whoever is managing the funds is managing the risks as well as they can.

You're doing the right thing and you will really be grateful you mode the sacrifice when you did.

I'm 37 and I'm screwed pension wise. I've been a carer for my disabled dc since I was 20. Dp works part time minimum wage to help with dcs care needs. We do OK with top ups and my sons pip but certainly can't put anything away.

The one thing we do have is our house, we will next week when we pay it off using a small inheritance we had. We only have that because my mum nagged and cajoled us to buy back in 2001 when I was 19 and dp was 24. I'm so glad we went for it as she was right about the house prices spiralling out of control. Which they did a year later.

I feel so sorry for young people now, no chance of owning a home until they're in their 30s and no chance to save. At least we have a little security.

Really important thread. I’ve only read the first 2 pages but this struck me “it does worry me that those of us that have been sensible with money may be penalised in some way (eg by not being given state pension as have private one) as there’s going to be so many people needing assistance.”

No. No. If people were penalised after saving all their lives to pay for their own retirement while the ostriches splurged then there would be fucking RIOTS. What is more likely is that taxes will go up massively for the generations below. PLUS automatic pension enrolment will become even more tightly controlled, with percentages increased.

I think that women will give birth to their first children later in life (mid-late 30s), and that we will return to 3 generation households, with grandparents doing childcare when they are retired but still fit enough to do it. Then as the grandparents become more infirm they will be looked after via a combination of late teens kids (who of course will no longer be able to afford to go away to uni so will stay at home) and their parents. Social care would only generally be available for those that hadn’t had kids and so didn’t have family. Unless you could prove estrangement.

Then, the teenaged/early 20s kids will move out with (maybe unsuitable) partners earlier than they would have done, just to escape the pressure of the multi generation family home, and lo life has gone full circle and back to the 1950s.......

For those who don’t want to fall into this arrangement, we will have Dignitas UK. I am only half joking about all of this.

The myth that you will end up in the same care home as the person who saved nothing is heard frequently - we seem to forget the 20 odd years before we get to that point.

A very good point, Worried.

Im a civil servant so have good pension pots trough work and pay in every month as does my employer. Dh is in the private sector but also with good pension funds.
We have set up 2 private pension pots for our dds so they have a good nest when starting to work themselves. We put in 10pounds per month...

The myth that you will end up in the same care home as the person who saved nothing is heard frequently

That may be a myth in your area Worried but it certainly happens in mine (South East City) I know for a fact as BIL owns a Nursing Home and they definitely have clients who pay privately and clients who are paid for by SS. It's an absolutely lovely place.

No. No. If people were penalised after saving all their lives to pay for their own retirement while the ostriches splurged then there would be fucking RIOTS.

I don't see how this would be the case. We already have people forced to sell their homes to pay for care whereas people who have no homes still get their care paid for, from what I understand.

I assume that people who save for a pension will be more comfortable than others who did not but the others will still have benefits to fall back on. I think it's the other way actually, if the safety net was shredded and people didn't save for retirement then there would be chaos because those people (the poor) would have nothing left to lose. The middle class always has something to lose so they toe the line and get squeezed.

No, I think the lucky ones are the older generation who have benefited from the final salary pension schemes. I know many people in their 70s/80s who have a very comfortable retirement due to these schemes

Not 'lucky' at all. They just happened to work when unions held a lot of sway and had the clout to fight for good working conditions.

Since they were pretty much destroyed by tory rule, working conditions have deteriorated year on year. Where it used to be the norm to have a secure job with a final salary pension, they are now seen to be as rare as gold dust.

It's a race to the bottom.

Where it should be something we aspire to and fight for, people seem resentful towards those who 'had it good'

It's a shame.

It’s too late for me to sort a decent pension now, numerous reasons why I hadn’t done so earlier. But I live in SH so housing benefit will cover my rent. I won’t have any household repairs..... I have to look after myself.

Oh, the irony, Asta.

Also, for the 'state pention' (what I've payed NI into) do you still get that if you've got savings or does money get deducted from that depending on pension funds/savings?

You get your state pension based on having paid NI, irrespective of what other pensions or savings you may have. So you won’t have it taken away if you save elsewhere.... at least not under the current rules.

It’s also worth being aware that you are not actually ‘paying in’ to the state pension in the same way as you are to a private or workplace pension. There is no state pension ‘pot’ from which benefits are paid, it is all paid out of current taxation.

It is possible - some say likely - that future generations will not receive the state pension. While I think that’s possible in the very long term, it surely would have to be a change which is phased in rather than introduced in one go. Otherwise you’ll have millions of pensioners who have paid NI all their working lives on the expectation of receiving a state pension, only to find they don’t. Riots on the streets, surely?

They could however phase it in, freeze the level or something like that.

We started a pension fund for our DS when he was born . We've always been frugal & would rather invest the money for him than spend it on expensive clothes, toys, gadgets, meals out etc etc that so many people seem to think are 'essential' for children. And we made a conscious decision to just have one child.

place marking.

I haven't had time to read all replies but another concern must be people unlocking their pensions early, throwing caution to the wind and fritering it all away then needing benefits to survive as an oap. That will only add further stress to the system.
I would be surprised if the pension system is still in existence in a generation or two. I certainly don't want to be reliant on the state in my dotage.

Thank you puzzled

So, say if they were to scrap state pensions, where would all the money go that has been taken out if my wage each month?
Surely they can't just take it off you?
I did think NI was for pensions actually, like a pension pot, and that's why it was different to tax?
God I'm clueless 🙄

@N0N1ceIcecream thanks for that link, really useful. I've got a question if you - or anyone else who knows about NI can help? I checked my balance, and for the three years from when I was 15/(just)16 (I had my birthday about a month before the financial year to 17/18 I have three full years of NI credit.

I looked on the website to see where these came from, but none of the categories seemed to apply - I wasn't claiming any benefits or on JSA, etc. I wondered if it was because I was in full time education, but that isn't listed on there, besides which it seems strange to give me a full year of credit when for most of it I was only 15?

Does everyone get three years between 15-17 automatically?

YANBU. People who aren’t actively growing a cash generating asset pool will be in huge trouble. It’s not fair or sustainable to expect the tax payer to pay out pensions, aged care etc. But most people are too lazy to find a way to support themselves in old age and treat their children too badly to expect help from them. Those people will be screwed if the pensions system collapses. The government needs to introduce immediate reforms but refuse to because they know it will be unpopular.

I'm 40. I started looking into pensions when I started my first job at 21. I bought my first house at age 26. I didn't go on holidays, didn't take driving lessons till I was 38 because a car was too expensive, didn't wear expensive clothes, bought my furniture from the second hand shop et cetera. I also spent my twenties wondering how other people could pay for all these luxuries. I thought I was doing something wrong. It tookuntil my thirties to realise that those same people were now crawling out of debt. Of course some people have it genuinely difficult financially, but too many people simply spend too much. You don't need new clothes to go to a wedding, you don't need a vacation every year, you don't need to spend hundreds at christmas, you don't need an expensive wedding, you don't need a good looking car.