To think the old style pensions should be capped.

[Blindering]

ok, I am in Ireland so unaware of how UK pensions function but my neighbour who worked as a college lecturer but retired in 2008 in his 70s gets 600 euro a week in pension, equivalent to 513 stg.
This is on top of a 150k pay off he got when he left the job which I believe all civil servants here were getting.

But aibu to think a bachelor living in a house with the mortgage long paid off has no need for over 500stg a week? Like what would one need the money for at that stage in life?

@Blindering

''Seriously loads have mortgages in their 70s. How naive,''

I can't think of 1 person.

Well there you have it! OP doesn't know one person! That's definitely the most reliable sample size ever for research! Grow up OP.!!

OP, it seems you are wilfully still not understanding the facts of how pensions work, or how there is no link between occupational pensions, state pensions and the housing market.

You are clearly madly jealous of this “neighbour” and his financial situation and are cross you haven’t got a slice of his (pecuniary) action.

As you’ve suggested that you have a connection to him, why don’t you just go and ask him if he will give you some of his ‘spare’ money, as he will be dead soon and you don’t think he deserves it all? I can’t see what else will satisfy you at this stage.

[quote mushroompickers]@saltinesandcoffeecups what happens to compound interest when interest rates are lower than inflation? In practice, you lose money, right?

In the long term, we are sitting on a timebomb because those who have bough expensive houses with low interest rates will loose out either way. Either interest rates go up and their mortgage goes up to a massive degree or interest rates stay low and their pension remains low as the y struggle to repay their huge mortgage debt.

In this regard, this generation is different from the last.[/quote]
No it’s really not. Over the span of decades the money will still grow through the combination of reinvestment and economic growth.

The point of retirement savings is to use compound interest and to protect against the relative short term fluctuations of the markets with time.

The scenario you describe has always been the case, every generation has faced it.

In this regard, this generation is different from the last

It certainly is. We paid high interest on our mortgages and had no savings to offset that. Now we have a bit of money saved, there’s no return on it. Every generation has its challenges.

And future retirement income isn't generally invested at bank rates but in assets generating a real return. If your retirement pot is consistently earning less than inflation something is wrong!

I don't think you can arbitrarily cut pensions of people you don't think need them.

I agree that there's a huge problem with intergenerational equity on both sides of the Irish Sea. It's been exacerbated by the response to covid and (in the UK) by brexit, both of which place large burdens on younger people to please their elders.

But if you want to resolve this and rebalance resources towards the young the fairest way to do it is through the tax system.

When we married I moved into my husbands flat. He had bought it a couple of years before, cleaned out all his saving and had the max mortgage he could get. No furniture, slept in a sleeping bag on the floor until he could afford basic bits and pieces. When I moved in we had a bit more jointly so got some reasonable (still cheap) furniture. We looked back on what my father had bought years before and how cheap it seemed. How easy the previous generation had it. Truth is he also scrimped and saved to have somewhere to live initially.

So looking at how easy the older folk have it now remember they didn't necessarily have it easy when they were younger and probably had the same generation envy that current young people have.

Although since every generation screws over the next

What are you doing OP in making sure the way you are living is not going to impact the future generations? It won't be just about money, housing etc for them. What about how you impact the environment on a day to day basis. Are you limiting resource consumption and reducing your footprint or are you thinking to hell with it, you can't make a difference alone so you'll leave it to them to figure out?

@StatisticallyChallenged

And future retirement income isn't generally invested at bank rates but in assets generating a real return. If your retirement pot is consistently earning less than inflation something is wrong!

Amen… here is a decent article talking about the rate of return for the S&P500 index fund. It answers the previous question about inflation and the affects.

www.investopedia.com/ask/answers/042415/what-average-annual-return-sp-500.asp

The short answer, the ROR on the index was 10%, adjusted for inflation was 7%. Bank savings rates in the US have been sub 1% for years and anticipated to stay that way for the next 10.

The really short answer is this. You can spend all your savings dollars on a house that hope appreciates in value over the years and is timed at a high point when you sell, spend your savings dollars by putting them in a savings account (the equivalent of stuffing it your mattress) and not keep up with inflation, or spending those dollars and buying funds over time that is proven to provide growth and returns.

I got a late start with my private retirement funds and in simple numbers now have 5x more than if I had saved the equivalent in a savings account, so I’m now earning interest on 5x what I would have if I was in a simple savings account. That is compound interest at it’s core!

@NashvilleQueen

It's absolutely none of your business.

This,

YAB completely unreasonable.

You don't know how much he contributed towards his pension, how many VACs he paid for. How well or poorly he was paid and whether this was offset by the promise of a good pension in later years. How many years he worked. The legal contract that entitles him to that money.

And whether he is a bachelor or not is none of your business & thoroughly discriminatory.

What a very unpleasant post !

@BigFatLiar

When we married I moved into my husbands flat. He had bought it a couple of years before, cleaned out all his saving and had the max mortgage he could get. No furniture, slept in a sleeping bag on the floor until he could afford basic bits and pieces. When I moved in we had a bit more jointly so got some reasonable (still cheap) furniture. We looked back on what my father had bought years before and how cheap it seemed. How easy the previous generation had it. Truth is he also scrimped and saved to have somewhere to live initially.

So looking at how easy the older folk have it now remember they didn't necessarily have it easy when they were younger and probably had the same generation envy that current young people have.

It wasn't easy for the older generations, but earning a couple of hundred pound a week with a small mortgage (that was likely a 100% mortgage so no deposit needing saved), and earning only slightly more money per week and yet having to pay, in some cases over a grand per month on rent or a mortgage is a tad different. If you are lucky enough to get money scraped together to get a house, you still pay a lot, for the house to not actually gain much in value. Some people on here bought houses for a couple of thousand pounds that are now worth over 200,000, if not more. I will never seen a increase like that on any house I own. They can downsize to a smaller house and still have money left over to buy a holiday home. It's not a lifestyle the rest of us who are a lot younger will ever have, even if you are fortunate enough to buy a house. And it's not as if us younger lot walk into a fully furnished house full of expensive items. Most of us save up over time too for furniture or buy second hand.

The fact that your husband could buy by himself says a lot too. Not many can do that these days, even with a flat. In my area, which is not even an extravagant area in fact we have very little in the way of shops and services, but to live here you need upwards of £150,000 for something even half decent, so you need a wage of at least £33,000, which is also rare in this area.

UPDATE: I was chatting to my pensioner pal, he said it wasn't a private pension. It was mandatory payment for all those who keep saying it was 'private', that and yes it was a government paid university job.

That still sounds like a workplace/occupational pension scheme. It's not the same as a state pension, and it's still been accrued through working, it's still a deferred part of his salary

Note he claims himself that the pensions were ott and too much and that he and his colleagues knew it would end in tears for the generations after him.

''That still sounds like a workplace/occupational pension scheme. It's not the same as a state pension, and it's still been accrued through working, it's still a deferred part of his salary''

it is still too much though no matter what way you look at it. The fact he said that he and his colleagues knew it was a gravy train the future generations would not catch.

@Blindering

Note he claims himself that the pensions were ott and too much and that he and his colleagues knew it would end in tears for the generations after him.

Course he does.

''Course he does.''

what way do you mean that? His words were ''I got out in 2008 at 59 early with my pension and I knew there was a shit storm coming and it did that same year. I'm just glad they couldn't touch us''.

@StatisticallyChallenged

That still sounds like a workplace/occupational pension scheme. It's not the same as a state pension, and it's still been accrued through working, it's still a deferred part of his salary

This!

Part of the attraction of these types of jobs is the pension! Ask any public sector employee.

He will have paid into this pension throughout his career and his employer will have contributed too.

@Blindering

''Course he does.''

what way do you mean that? His words were ''I got out in 2008 at 59 early with my pension and I knew there was a shit storm coming and it did that same year. I'm just glad they couldn't touch us''.

He made a sensible move.

''This!

Part of the attraction of these types of jobs is the pension! Ask any public sector employee. ''

The 'is' there needs to change to 'was'.

Half the reason I'm in my current job is because it has a pension like this. No big payoff but each year I work earns me 1/48th of my salary for retirement. No need to worry about judging how long I might live for.

The fact he said that he and his colleagues knew it was a gravy train the future generations would not catch

Not aimed at OP who is a GF who is having a whale of a time on this thread

But for the benefit of those being wound up by OPs comments - I’ve worked with members of defined benefit pension schemes for 32 years and never once has anyone suggested anything remotely close to the sentiment attributed above

It’s goady BS nothing more

''He made a sensible move.''

it's not about him personally though, it's the excess amount like him in that generation who have plenty when the next generations are fucked. But I'm a sinner for raising this.

@Blindering

''This!

Part of the attraction of these types of jobs is the pension! Ask any public sector employee. ''

The 'is' there needs to change to 'was'.

Nope. I'm a university academic and my pension is still pretty good. It might not be as amazing as it was but both me and my husband should have a pretty comfortable retirement.