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

Even your average stem degree biomedical science I have firsthand experience so you could not have worked even part-time alongside it. You’re in the lab eight hours a day.

I work for the NHS three days a week. I also work for myself two days a month. I take home much more working for myself twice a month than working for the NHS three days a week.

The NHS pension I’ve been paying into for 30 years is small consolation for being vastly underpaid for my skills and experience.

If it wasn’t for the pension, and the fact I believe in publicly-funded healthcare, I’d have left years ago.

Go for lives on the pension. Fill your boots. Staff will no longer have any incentive whatsoever to work for an organisation that underpays them to such a woeful extent. You’ll have fixed the pension issue and fucked the NHS. it’s not as easy as you think.

Yep, similar thinking here.

I'm an Xennial reflects my life more than saying I'm a Millennial 😅 .

We have only ever had one car (either car share or one of us will use public transport) and have literally just got a new (4-year-old) one after getting rid of our 11-year old one that we'd had for six years as it was costing too much in repairs.

We could have bought a bigger, more expensive house, but we're currently prioritising saving to pay off our mortgage which we're hoping to do within next 10 years and hopefully 7-8.

Together we have a mixture of higher education/LGPS/civil service pensions, which I admit that we haven't yet looked into closely, but have both been paying into since early-mid 20s. We have the option of paying AVCs, which we should probably look into in more detail once the mortgage is nearer the end.

Not sure you meant to reply to me here. I suspect it was meant for the eejit I was replying to?
Those were just the full time degree courses off the top of my head. I am well aware of how hard it is for students now compared to when I did one of the degrees I mentioned. And it wasn't easy then!

@Lifestooshort71 yes I have the option to withdraw the 25% (at the moment, there have been rumours that might change), but then I would only have c.£375k to buy an annuity to receive an income for life. £375k would buy an annuity of c.£12.5k a year for life, (depending on whether I want it inflation linked/an income for DH if I die first). The £125k drawdown might last 10 years say, at £12.5k a year, plus £12.5k from the annuity. When the drawdown runs out, my pension would be c.£12.5k a year. It’s obviously doable with state pension on top - especially with no mortgage. But it’s a lot of saving for not much income at the end of it!

The other uncertainty, is given ‘pots’ are heavily invested in the stock market, if another financial crisis/Covid/currently unknown crisis, hits in the year or two before I retire and the stock market crashes, my current £500k could be wiped out. It’s not guaranteed that pension pots will grow, given how they are invested.

DB schemes don’t have that investment risk, you have a guaranteed income for life according to the terms, regardless of what’s happening with the stock market.

I plan on a combination of working until I keel over and keeling over.

I agree and I do have a small public sector pension from time working there. It’s not just hugely costly to provide these db schemes but it’s also very risky for the taxpayer. We should move all future pension provisions to defined contribution.

I agree.
Public sector pensions are simply not affordable.

Then he shouldn't be doing it.
A degree is 35 hours work a week. He has time for an evening/weekend job to bring in more money.
If he hasn't got the energy now to do that then he's not got the right work ethic or the required level of intellect for his chosen degree.

Aren't good public sector pensions one of the reasons why public sector workers like teachers, nurses and other ahp's accept shit wages for the job thst they do? Because there are other perks to the job?

We have two state pensions, an annuity income from my private pension and DH’s modest public sector pension. It was no sacrifice to acquire these and we now be live very well in retirement, and have lots of fun. This is possible because once you have retired your mortgage is paid off, you don’t have children to support and motoring expenses are less.

This is simply untrue. Public sector pension schemes are currently in surplus to the tune of about £160bn (source www.pinsentmasons.com/out-law/news/uk-defined-benefit-surplus-reforms-schemes-employers#:~:text=According%20to%20the%20government%2C%20approximately%2075%%20of,are%20currently%20in%20surplus%2C%20worth%20£160%20billion.&text=By%20unlocking%20surplus%20funds%20and%20investing%20them,prosperous%20retirement%20for%20millions%20of%20working%20people)

It would help if there were more opportunities for part time work for 15/16/17 year olds. It gives young people a good work ethic and there is no reason why they can't be earning a little while at college and uni. I certainly did. It would stop the parents having to bubblewrap them until they were 21 (fully grown adults!!).

It's harder for employers to give jobs to 16 year olds now due to the insurance and paperwork. It needs to change so that young people enjoy earning money again. I bloody loved earning £50 a week when I was 15 doing the tea round in a nursing home on a Sunday / plus 3 hours in a corner shop on a Friday night.

In my day we all had jobs from age 14: cafe's, ice cream vans, washing up, babysitting, cornershops, greengrocers, bakeries - nearly all the kids I went to school with had a weekend job.

If anything, moving to defined contribution pensions will make the pay between public and private sector more transparent. Pension in the public sector is usually equal to an extra 25% or more of salary. If all pensions were dc then wages between public and private sectors could be fairly compared. Evidence shows on average that public sector workers are better paid once pension is taken into account but obviously depends on the role:

DD took dance degree. They had classes on a Saturday until mid-day. They were shattered after classes all day. When do you suggest they worked?

Agree.
Most of my savings are invested in fixed rate bonds, ISAs etc
Recently I’ve put some in 7% fixed rate 5yr bonds
So £500k ( as your example ) would give £35k / yr. ( before tax )
When I retire I will live off some of the proceeds of the interest of investments as I have unsecure private pensions. Of course atm savings like this are doing really well but interest rates go up and down.
Savers and pensioners with private investments are always at risk and it isn’t right that those who have public pensions are secure because the tax payer has to pick up the shortfall if things go pear shaped. When the rest of us lose everything, but that’s why I have never just trusted pensions.

If you can take some money out of your pension i would invest it.

As I said...

Something admirable about 'not having the intellect' but putting in 100% effort and coming out with a good degree though. Not sure we limit degrees to those who find it a breeze.

Its more complicated than the pensions though. Many now rent and will never own a house so will have to continue paying rent and will have no equity to use if required. Rents and col is very high so people can’t save but if they’re working and paying NI giving them the state pension. Currently those with state pension get no other help unlike those who saved nothing who get pension credit and other benefits including wfa.
Those on benefits, many of whom will never work much, will continue to need to be supported for their whole lives. We’ve seen nothing yet with the size of the benefits bill.

Currently we have quite a few wealthy pensioners who were lucky to live through the good years, esp around wages and house prices. We are heading for a massive crisis and the ones who are going to suffer the most are those who work, pay full NI and get the state pension as they won’t get any other help. People will wonder even more if it’s worth working.

You haven’t read the link you posted. The £160bn surplus is for private sector db scheme’s only. These are almost all closed to new employees because they are totally unaffordable

How did you arrive at this figure. I mean the first step is to decide the age at which you want to start drawing your pension.
Then you decide if and when you are taking your lump sum. Lastly - do you want to leave any money in your pot after your death.

Use this calculator to calculate your figure, I bet it will be much lower than 800k if you are planning to draw 25k post tax from.the age of 57 (or 55 as it currently stands).

www.guiide.co.uk/

The big mortgage for a big house will help them because they will be able to downsize in later life and free up a capital.

You do know it’s not that simple to just get a job @L0bstersLass .
There are thousands of students cramming for the same jobs.

No, we chose to support him so that he could do his absolute best, that's a choice we've been lucky enough to be able to make

£800k
25% lump sum £200k
£600k pot - 4% drawdown of £24k

this is to try and allow a bit for inflation.

id like to retire in 20 years at 60.