To think we are heading into a pensions disaster

[She11y]

I asked ChatGPT what the median pension savings were for someone in their mid 40s and I got the below reply:

Ages 35 to 44: The median pension pot is approximately £30,600.
• Ages 45 to 54: The median pension pot increases to about £81,200.

This website has a similarly sobering statistic - average pension pot for 50-59 is £96k.

https://www.nutsaboutmoney.com/pensions/average-pension-pot-uk

These are averages and the number will be brought down by some people who have zero pension savings but it's still a very low amount.

How are people going to survive retirement. There aren't many jobs for people the wrong side of 50z

Yup.

Tax to the hilt those who have organised their own pensions and paid into them. Take all their money away to pay for those who haven't - for whatever reason.

What do you think people will do then? Do you think that future generations might just think 'Sod this, why squirrel away my pension if they are just going to take it away from me?'

@TonTonMacoute perfectly said. We have thought about and planned our pensions, and any suggestion that they will be raided is likely to have us heading for the hills.

This is the exact reason why workplace pensions were introduced with several companies setting up master trusts which people are automatically enrolled into. People still have the right to opt out and I suspect some do, but the idea is to encourage people to save for their retirement. I work in the pensions industry and I’m lucky to have a pretty good one that I’m paying into myself. I would recommend to anyone to start paying into a pension as soon as possible because there’s no guarantee they’ll even be a state pension by the time my generation retires.

Oh come on, surely you know the answer to that. Uni fees, accommodation costs, books etc are in the here and now. Pensions are always "tomorrow's problem".
And also people are scared of debt. They shouldn't be, but they are. And student loans have a seriously scary interest!

I have standards 🤣

Completely agree, no chance of getting enough work to help. My son’s student property is £8k a year. His books and resources come to £500. The student loan doesn’t cover anywhere near enough. We pay his rent and he still struggles

I doubt anyone would think the country could function without public sector workers but neither could it without private. The private sector makes the money to fund the public sector.
Both are equally worthy of equality in retirement .

That’s not reflective of the average person.
There aren’t many jobs that get £300/hr

Overall if you look at all public sector jobs and reduced the employer contribution % their would be a saving.

As someone facing medical retirement my 'gold plated' public sector pension is worth around £4000 a year. Four thousand.

But how much did you pay in?

I have worked all my life in the private sector, sometimes as contractor rather than salaried. And so I have made contributions into private pension plans.
My husband worked 12 years for the Civil Service. His contributions are perhaps 10% of what I have paid into my pension plans over the years - but his pension entitlement is about the same as mine.
There is NOTHING as valuable as a final salary pension!

I've never been able to afford to save into a pension. We have a business we hope to eventually sell and use to live off of but if that doesn't go to plan then we are screwed.

I've been too busy prioritising my mortgage and home
And that's another financial error people make. It's more important to build your pension than pay off your mortgage

Because they are idiots?
Or they have a political axe to grind?
I'm not a financial advisor, so if you're not sure take advice from a professional. But in general it's a good idea to make up NICS gaps

@FixTheBone How can public service pensions ever be in credit. The liability is massive. Are you saying the tax you pay covers the government pension contributions for you? So your tax goes to nothing else? Or are you ignoring the taxpayer contribution completely? Your contributions don’t pay for your pension. Everyone else chips in.

I’d just like to point out that most public sector pensions are no longer final salary. Haven’t been for years!

The NHS pension scheme is an unfunded defined benefit one, so I suspect when @FixTheBone says it’s projected to be in surplus they are simply referring to the fact that at some point the contributions paid (staff and employer) in a given year equal or exceed the pensions paid in the same year.

But that’s to completely misunderstand the meaning of surplus (or deficit) in a defined benefit pension scheme. A defined benefit pension is a commitment to pay a benefit in the future, and us such the liability for the NHS scheme is the sum of those commitments based on mortality rates, salary and years of service, allowing also for increases. For the NHS scheme the liability for commitments made is around one trillion pounds. That’s £1,000,000,000,000. There are no assets because it’s an unfunded scheme so it’s not possible for it to be in surplus in the way that funded defined benefit schemes (used in the private sector and some local authority schemes) can be.

Yes you're right, I do know that.

I worked for a local authority in the NE recently (as a contractor) and they paid a massive 13% pension contribution to employees.
The most I have ever come across in the private sector is 6% (which you had to match).

They are still defined benefit pensions based on salary and vastly more generous and much more secure than the defined contribution schemes used in the private sector. They also typically benefit from much higher employer contributions. The fact that they are very slightly less generous than 30 years ago does not alter that.

I’m grateful my employers have paid into my pension for me, and they do matching contributions if we put more in so my pot is OK. I will still work until I’m at least 70 though.

I agree-for a variety of reasons there is a huge wave of pension shortfall and retirement poverty coming down the pipeline.
The irony is-so many Gen X, Millennials, Gen Z folk are banging on about how money should be taken away from pensioners, without making the connection that THEY will lose out when benefits are removed. State benefits taken away are very rarely re-instated. My message to Gen X, Millenials, Gen Z is be VERY careful what you wish for...especially if you think YOU'LL need a State funded retirement.

I’m really worried about a lot of mums who are giving up work due to children with disabilities, both single parents and those in relationships. Not only is SEN on the rise, I believe there is a subtle change in rhetoric on a lot of the online forums about home ed being best, the ‘trauma’ of school and of course EBSA being a very real thing.
These women are being forced to leave their jobs due to insufficient school support, delays to EHCPs, inflexible employers and it leaves them really vulnerable.
There are statistics about relationship breakdown being more likely for parents of SEN children and so if a mum leaves her job, then gets divorced, it’s going to be something like 12 years before she can get back into work. By then it’s so much harder.
I see so many posts from women living on UC, DLA, carers element and child maintenance who are terrified of what will happen when their children turn eighteen and their finances drop so much. As we know these children are often not ready to go out and earn, move away for uni but they are not compelled to share their PIP if they qualify.
So the mums are left with a significant amount of time out of work, no money, no savings, still could be in a mortgaged house or renting and not enough N.I contributions.
I don’t know what the answer is apart from more support to keep them in work and changing the bloody message that sending kids into school who don’t want to go is somehow akin to child abuse.

Just to clarify I do mean EBSA is a real thing. I have lots of lived experience!

@Wildflowers99
Lectures for some courses are not just 4/5 hours a day. They might be if you’re studying English or History for example.
However if you are doing Nursing you spend about half you degree time working shifts in the NHS, plus studying time.
One of my DC did pharmacy masters and it was lectures all day, plus several hours of study in the evenings/weekends.
Other healthcare degrees require at least 1000 hours spent on placement, working a 37.5 hours pw. It can be hard fitting in a part time job around this.

@Helen483 The NHS contribution can be nearly 24%. It’s obviously too generous. The doctors get to the max pension tax limit and then go part time to avoid tax. It’s a retirement issue too. They don’t need to work, so they don’t. They go freelance for a few hours and don’t add to their pensions - so we cannot get appointments because we don’t have enough hours being worked. It’s going to get worse with the 22% pay rise.

”The doctors” do not. A few aging doctors do.