To think workplace/private pensions will be used like this in future?

[themaskedcat]

Many agree the state pension as it currently works is not sustainable. When it was set up it was linked to life expectancy and there were many workers for every pensioner, but these days it's the biggest cost from the welfare budget and there aren't enough workers for every SP recipient.

The age is going up to 67 soon, and will be 68 for anyone born after 1978. I'm in my 30s and expect the age to be into the 70s for my generation.

But while people are living longer, that doesn't mean people are going to necessarily be healthier and able to work into their 70s. I believe that for many, they will have to use their private pension to 'bridge the gap' from the time they can no longer work until they get the state pension (whatever age that will be). So private pensions will need to be used 'before' rather than 'alongside' the state pension. And that's I think that's why there's such an emphasis on them these days, so people in their 60s will have something to fall back on.

Not true, in the NHS you don’t have to pay 8% unless you earn over 26k

Sooner than that. I’m 52 and have been paying into a private pension since my first job. Technically I could retire in 6 years time with a private pension.

Same here - I’m permanently exhausted!

My mortgage has 5 years left which will have a massive effect on my disposable income. We could also sell our house and downsize (we have a 4 bed house for 2 of us) and free up cash for retirement.

No way am I working until I’m 67! I’d like to try and retire at 60 with my private pension/ money from the house.

Depending on how you set it up, possibly sooner. I am the same age as you and originally I set mine up to retire at 50, which was the earliest at that time. Now, it has shifted to 55, with a further shift in 2028 to 57. So, mine automatically moved to 55. My husband had to decide 55 or 57 because he falls in the bracket where it moves. He has selected 57 because we still have a school age child to fund. I want to retire at 55, but will probably wait a year or two longer until our mortgage is cleared.

Look at SIPPs. You can contribute in addition to your employers pension. It works just like a stocks and shares ISA but you get tax breaks.

I am late 50’s and now maxing my contributions so next time job is on the line I will just retire. No way I am begging bowl for a new job in my 60’s.

This is how pensions work now really. It is also the reason that one of the first things I did when I had my son was open a pension for him. In the hope that small bits invested now will help him retire when I am long dead.

Definitely, which is I mean when I say means testing is a risky route to go down. We don't want to be encouraging this.

I will be using my private pensions before state pension kicks in, and i dont think that is unusual. Ill health means there is no other option, but i intend to take my lump sums and use them future proof my house (maintenance, solar panels, insulation and new render as well as windows, doors and hest solutions), and then hope to live frugally there after.

People aren't living longer these days. Check the ONS stats. The gap in the pension age entitlement is purely to allow governments to pilfer more tax payers money to allow the super rich to carry on avoiding paying a fair rate of tax.

But continuing to work doesn’t have to be in their original career - many young retirees use it as a springboard to try something else ( which may be low paid but more satisfying to do ) whilst they have some level of income from a pension

If you save 8% for 40 years, you'd have 320% of your salary even if you assume very low risk funds increasing with inflation - so enough to last 3-4 years at your current spend rate

This would not be likely in any 40 year period - that your investment would just keep up with inflation and no more. And even if it did aren't you missing the compounding effect? This maths is off.

I don't think it is so much about "bridging the gap" as that would imply they were relying on JUST the SP in older age.
In my experience, most people use the SP as a top-up and have other pensions to provide the bulk of their income in retirement (whether that be early or not).

There are no easy answers to this. I didn't start paying into a pension until I was 27 because up before that I worked really part time for three years and before that I was ill and claiming IB.

So 20 years of working between 22 and 34 hours (currently 32), initially at 6% contribution, going up to 8%. It's worth fuck all in the grand scheme of things, the forecast amount wouldn't cover our current council tax bill.

And I'm being made redundant later this year, hopefully I'll find another job and there won't be a gap, but who knows - I need to work but I also need a job that works around DS who's autistic. I'm not planning on retiring as long as I'm physically capable of working. My grandmother continued to work into her 70's (though she didn't actually need to).

I'm expecting to be cold and poor in retirement.

I got SP and Occ pension at 60, neither were great so I did several different part time jobs for a few years. Public sector admin two or three days a week, a friend set up a business, I helped her, and I also did some quality checks on public transport. DH also worked p/t min wage work, he only has a SP. Don’t forget, my age group (pre 2016 retirees) is on a basic SP of around £50 a week less than younger pensioners.

Once the mortgage was cleared we were immediately better off. It is much harder for renters.

I work for the NHs, one of the UKs biggest employers.
My pension is aligned with state retirement age.

It's a simplified illustration of the worst case scenario.

That's what I'm doing. I should have retired by now but have another 6 years to go now. DH is older than me and I need not to work if he does all the travelling he wants to do before he gets too old.

I'm lucky in that I have a good final salary pension but the way pensions are going there's going to be a real problem in about 20 year's time

It's not - worst case scenario is less than you put in (done to zero theoretically). Your post seemed to present your version as reasonable or even quite lucky (the "even if you assume very low risk"). There's no reason at all to assume a 1:1 inflationary growth with no compounding. Wildly unlikely and a very weird way to work out returns (simply multiplying the percentage by the number of years). I don't understand what it's meant to illustrate really.