To think 71 is too old for state pension age?

[winterwonder1]

This isn't just for people who are 21 now - that's for people born after 1970 - so 55 now. I can't imagine being fit enough to do my job at 71.
DWP State Pension age will have to rise to 71 says report | News Shopper

No 55 to 65 year olds off long term sick has always been the largest group of workers on long term sick. Early retirement was much more prevalent 10 to 15 years ago, but you did not this issue then. It used to be far easier to retire early on grounds of ill health. Now all the pension schemes have much tighter criteria.

Oh the Yuppie

Not heard that for Years but Yes, I remember the Yuppie types with their brick phones and ever so important calls on them, their renaming places , ie Battersea = South Chelsea, and most of all their Filofaxes

I still have the Sloane Ranger Handbook

It works in Oz, just saying

And its awful that the older generation couldn't give a shit.
They know they're contributing to worse outcomes for the younger generation, they just don't care. What happened to wanting a better life for your kids???

It's not only state pension...half our council tax ...is pensions!!

You have people who have been activists or still are in the older community, just like you have younger people who are. Some older people do give a shit, a lot do not. Just like many younger parents do not give a shit that what they are doing is going to make climate change worse for their kids. But some do care and campaign on the issue.
It really is not an age dependent issue.
And climate change is going to be the biggest issue facing young people in the future.

It is an age dependant issue in this concept, because we are talking about pensions

But in Oz you and employer are forced to put money into a private pension, no? In the UK people can opt out, which is why it would be an issue - if you saw your savings as penalised (the more I save the less I get in state pension even though I still pay NI) many would feel like they should opt out of private pensions

i personally think we should not be able to opt out, but simply introducing means testing without other changes to private pension incentives and regulations would probably result in some counterproductive behaviour and might make the situation worse.

Not necessarily. I was contracted out but will receive the full new state pension.

It’s easy to check. https://www.gov.uk/check-state-pension

But I have my full years. So I physically can not buy more years. I still get less state pension

So, how much is your forecast?

Me too, I've kept the letter from my financial advisor about pros and cons of contracting out (in case, it could be a mis-selling case in the future). I didn't really expect there would be much of a state pension given when I retire (in 2045) so I contracted out and have a lot more in my private pension pot. I don't know how many extra years I would need to put in to top it up, but I've got 20 years to go and only need another 8 according to the website (though it's not clear if I need to contribute more to make up for contracting out)

831 posts in and nobody has suggested a way to pay for it.

Without that the idea is dead in the water.

Actually, someone suggested increasing taxes on the super rich and I've suggested increasing immigration and being honest that we can't afford our aging population. Some of the benefits will probably have to go like the Winter fuel did.

Compound interest is not really the magic people think it is because inflation also compounds over that time. If you want to work for 30 years and be retired for 30 years you more or less need to be saving however much you think you'll need to live a month each month of those 30 years. If you can't afford that then you need to work for longer so you have longer to save for a shorter time (so 40 years work vs 20 years retired the monthly savings amount halves). Or you need to prioritise pension contributions when you are young and have few responsibilities and/or when you are older and have had promotions and have a much higher income or lower expenditure.

That's all from a personal pensions viewpoint (and are mainly available to those on higher incomes) but the national situation is similar. We all need to either be paying more tax or working longer or expecting people on higher incomes to contribute disproportionately high amounts to make up for those on low incomes. The more sensible thing that the government need to do is get rid of the cliff edges in the tax system that disincentivize people at all incomes from working more (although ironically, the cliff edges at 50K and £100K do mean some people increase their personal pension savings to avoid them, but lots of others choose to go PT).

The more sensible thing that the government need to do is get rid of the cliff edges in the tax system that disincentivize people at all incomes from working more (although ironically, the cliff edges at 50K and £100K do mean some people increase their personal pension savings to avoid them, but lots of others choose to go PT).

I have increased my pension savings rather than go part time. I do intend to retire earlier though, which amounts to the same thing in this context.

That’s really not true unless you are investing somewhere with very low returns. The average annual return on S&P 500 is about 10% vs an average inflation rate of about 3%.

This is a UK site. The annualised return on the FTSE100 was 6.3% over the last 20 years vs inflation of 2.8% and yearly fees for a tracker of 0.1% you're looking at a real return of about 3.4 %. You could take the risk of a managed fund and hope you beat the average returns but your fees are much higher, think the worst I saw was 2.5% so the manager needs to be getting an average return of 8.7% just to match the performance of a tracker.

My mother is still working in a university. She's 71 this year. She got her job at the age of 68. She's got no plans to go anywhere.

I’m UK based - just happen to like the s&p500. No need to tie yourself to the uk, and probability better that you don’t. Most funds have decreased uk equities as a proportion of investment over the past decade. But still looking at ftse it is growing at 2x rate of inflation, so your premise that you need to put a full month of expenses in for every month you plan to be retired is just false.

as for fees, average is less than o.5% for pension schemes and the majority of funds under management will have no further fees. If you are paying 2.5% you should be looking elsewhere.

What bugs me is this kind of advice given on this website:

'Jack is 30. He makes a £50 contribution to his pension pot every month and earns 5% investment growth each year.
When Jack comes to retire at age 60, he’ll have been contributing to his pension for 30 years. That’s a total of £18,000 in contributions. When he comes to take the money out, his pension pot value will have increased to £41,000. More than double!'

Sounds great. But if you check the Bank of England inflation calculator you'll realise than thirty years ago £50 was equivalent in value to £103 now. More than double!

Forgetting about the compound interest on both your investments and inflation is a more useful rule of thumb guide to how much you want to pay into your pension over how long than claiming the power of compound interest but not thinking about the corroding power of inflation.

you are muddling things. That initial £50 would now become £223 in 30 years, or more than 2x its value, even accounting for inflation. The average annual £50 invested in year 30 would be worth half what he was investing 30 years ago and would still be worth £50.

compound interest definitely works, and is why it is so much better to invest early, even if you can only contribute small amounts, than to wait until your 40s and double down.

"Somebody else should pay for me " isn't really a plan. That's just pub talk.

Well let's have your ideas....