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

Why is everyone banging on about student finance? In the grand scheme one person (or even a hundred people) not paying pension contributions for three years doesn't matter a damn and won't make the slightest difference to this pension black hole that's opening up at our economy.

Although actually I guess the underlying reason why the PP couldn't afford both (support her child and save) is relevant to the pension problem which is that wages have been absolutely fucking terrible for seventeen years, while living costs have increased massively since brexit. The lowest three deciles of earners are in a right old pinch with this now, and they are the ones who need to be making more contributions, not less, on these shitty workplace plans. But of course they can't afford to.

This! This and other similar public sector roles and their pensions, they will cripple this country, 100%

Because in a lot of cases the employer is contributing 20-30% a month which is an INSANE amount for any DC pension holder, and the employee is only putting in a measly 5-10% for a defined benefit for the rest of their lives, and then they’re griping that it’s not a great pension. Read the room guys! Have you any idea how poor DC schemes can be.

Some employer pensions like (I believe) the NHS pension are unfunded. This means that the money paid in by employees is not saved in a pot but used for general spending by the government. Then when today’s employees retire those pensions will have to be funded by the taxes of the workers of tomorrow, before the taxes can be used for public services for the workers of tomorrow. The population crisis will kick in here too. Only by limiting these ludicrous pension promises can we help the workers of tomorrow have any form of public services.

Agree 100%

Public sector pensions are wildly generous!
for example, the teachers pension: the employer (aka the tax payer) contributes 30% of gross salary. In the private sector the statutory minimum employer contribution is 3%. So teachers are getting 10x that. Plus the pension is underwritten by the taxpayer so if the fund isn’t big enough, retired teachers will still get their full pension, linked to their earnings and inflation proofed. Private sector pensions are almost universally defined contribution now too which means there’s no guarantee on future income at all.

A lot of people don’t understand how generous public sector pensions still are relative to private sector. There has been a move from final salary to average salary, but with its index linking and taxpayer guarantee it is a massive benefit.

All jobs should be advertised at “full cost” (salary plus benefits plus employer pension contributions) so that there could be a true comparison between different sectors.

Actually what's going to cripple the country are all the other (ie private sector) employers who only have to put in 3%. Because when they put their 67 year old employees out to pasture, they won't have pension enough to live on. And that becomes everyone's problem.

Agree, got my 35 years NI contributions this year, but no SP for another 13 years. £1m in my pension pot, (down £57k following Trump and his tariffs announcements a few weeks ago) to drawdown on from next year.

"only" 3% is a lot of money to us small employers.

and people choose when they retire....as evidenced by half of this generation retiring in their early 50s due to stress and because they profited buying housing cheap decades ago, apparently.

Your number looks wrong

https://www.hl.co.uk/retirement/annuities/best-buy-rates

500k gets you c.25k going up with with RPI from age 65

In practice you need less as by that age you should have enough NI to get the full state pension, say 250k

Still, hardly trivial for somebody on median earnings

I agree with your broader points

Yes, me too. One of my class mates did Friday and Saturday evenings at McDonalds, but gave it up after about a term.

Public service pensions compensate for lower wages than in the private sector. But if it bothers you that much what's stopping you joining the public sector?

Because people are saying they don't have pensions as they are spending all their money supporting their adult children through university.

Adult children can work even if in education. Even non-adult children can work from at least 16. The parents can keep their money for their retirement.

They were in the middle of nowhere. Nearest town was 12 miles away by train. Most of them were 16 so they couldn't get a job. You were sitting on your arse in lectures. They were dancing all day, 8.30 to 5.30 and until midday on a Saturday. You have no idea, no fucking idea at all

You are talking rubbish!

Glad you find it amusing @toffeeappleturnip

12 miles by train is a 10 minute journey.

16 year olds can get jobs.

But of course, I'm sure there are more excuses.

I did not 'sit on my arse' all day. I already told you I cycled 8 miles a day and played hockey for 12 hours per week.

If they are dancing around all day perhaps they could do a sitting on their arse job all evening - like at a supermarket till.

But if you'd rather spend all your money on keeping them dependent on you - you do you.

Yep most people I know have never paid into a pension.

A big part of any pensions disaster is from people not realising how important it is to join a scheme if you can.

Or because e.g. teachers feel they can't afford 11.4% contribution. (They don't have the option to pay half for half the accrual rate).

Comparing pension situations needs more sophisticated discussion than is sometimes the case.

I'd love to know, for example, why Local Govt pensions have a fund and are more generous, for lower employee and employer contributions, than teachers' pensions (which do not have fund).

I'm fairly sure that a teacher contributing 11.4% with employer contribution of 28% or so would get a higher pension were they to allowed to put these sums into a fund.

And you dont have to buy an annuity these days. At 67 you could draw down 4 or 5% of your fund and get a much better income.

only" 3% is a lot of money to us small employers.

Maybe your business isn't viable. No shame in doing something else if it enables you to pay what you should.

Actually the trains take 24 minutes. Its the middle of nowhere and very few trains but obviously they're all not perfect like you and should have absolutely caught the train but I doubt you would be satisfied with that, you'd like them to walk 12 miles along roads with no pavements.

Fuck me @toffeeappleturnip this is sheer monomania now.

Ok so students can work and parents don't have to support them. Great, that's three years taken care of. Now solve the rest of it, please.

24 minutes is still 10 minutes less time than it took me to get to my evening job at uni.

I cycled, didn't have time to walk places.

Look, if you don't want your children to work and you're happy that they depend on you financially that's fine. I don't know why you're getting so stroppy about it.

Most colleges and universities are situated in largish towns and cities, most students can work around their courses. If they chose a course that makes them totally dependent on their parents then I guess you made that decision before they applied/accepted.

My parents would have been broke if they needed to pay for me. I wanted to go so much that I decided to pay for myself and I found a course, a university, part time jobs and accommodation that enabled me to do that.
It's that simple really.

I liked being independent from a young age.

I'll leave the rest of it to you guys now that parts sorted 😄

A big part of any pensions disaster is from people not realising how important it is to join a scheme if you can

I'm always wary of writing off a broad trend issue by pointing at individual choices. We are all part of the same society and the decisions we make are intrinsically bound up with national fiscal and political situations. If lots and lots of people experience the same difficulties, is that down to each one of those lots and lots of people? Or, can some responsibility rest on politicians who spent thirty years with their heads in the sand, watching as company after company declared itself bust/merged with all the attendant boardroom handshakes, pensions liability flying to the wind? Who knew that only around 30% of private sector employees were able to join a scheme at all? Who, when finally roused to action required only that employers contribute 3% to the least profitable pension vehicles ever created?

So you know disabled pensioners living only on benefits? I don’t think it’s the future most of us desire.