Be Excellent To Each Other

I was watching Newsnight last night, and it got me thinking.

You need to have saved £400k by the time you retire, to have an annuity of around £15k a year, which is then topped up to £22k with the state pension. That's £22k a year to live on, on current money value, not on the value that £22k will be worth in 30 years time…
To get £50k-ish, including state pension, you need to have over £1m in savings.

I look at those figures and can't see how that is possible for anyone? I'm doing pretty well for myself, I have a company pension and have done for the past 15 years or so, and on average have paid in 10% of my wage for that period. Currently i'm paying in 6% and putting some cash into a share tracker ISA each month, yet there is no way I could get that sort of cash saved by the time i'm 65, even if I cut back on everything and put half my wages away every year, it would still be difficult to reach those sort of figures.

I think there won't be a retirement for our generation, we'll just have to keep working till we die, which is a nice thought.

We're all fucked basically.

Are you prepared? Do you have a pension? Do you pay enough in?

32. No pension (yet).

£1m? Shit. Best get used to the taste of gruel.

I've been paying into a private pension for a while now.

And buying lottery tickets.

It's because we are, on average, living far, far longer than before.

I've been paying in to various work scheme pensions for years, but have no idea how much I have in any of them, or even if they have any of my details.

I should probably get around to sorting that out.

I think that's basically what I'll be doing. When I get to the stage when I'm not fit to work or have much of any kind of quality of life, I'll probably top myself. You occasionally read about elderly folk committing suicide so as not to be a burden and that's the way I look at it.

Cheery thought for the day.

I did have a pension in my last job and when I left there, I wrote to the pension company to ask how I go about paying into it privately and I never heard anything back from them, so I forgot all about it. Where I work now, we're being automatically enrolled into a pension scheme, but I doubt that'll be enough in itself.

Pretty sure it's future Craster's problem. That approach has never failed me so far. Though it has on occasion led me to the conclusion that past Craster is a dick.

Yup, I have 5 or 6 pensions scattered around the place. I got a letter a year ago from one of them who had tracked me down, and it told me I had £25k in the fund. Woohoo!

That £25k will buy me £120 a month...

I suppose I should apply for an allotment now.

That way I can be a subsistence farmer.

Sorted.

It's an approach I've favoured too. In fact I generally always live on the wage that future Trooper will earn in a few years, that guy better buck his ideas up, is all I can say.

I don't think you need quite as much money once you're really old do you? The mortgage should be gone, you can get around on buses for free, you can wear mental, weird old clothes and nobody cares.

That depends on when the housing market starts being a dick. To even consider buying anywhere I want to live I'd have to be 100k. Stupid London.

I've got 3 out of 4 already.

Sure, you don't need quite as much money, but I really don't fancy sitting in a bedsit all day every day, with only beans on toast and the TV for company. I want to still have some sort of life

If I look at my current outgoings, and how many of them won't change because I am older, it's scary.

Can't you take it all in a lump sum when you retire? Or at least quite a lot of it? I have that work thing where work matches the amount I put in, which seems pointless now that I'm never going to retire

I'm fairly confident of this as family history indicates historically early deaths before "retirement age". That, or I'll bes tabbed by a jealous ex-lover or something.

But to be serious, I have no pension at all - absolutely none.
I'll be fecked if I'm gonna be told that some banker-twat has lost the lot when I retire (as has happened to loads of people already including my parents; will happen to almost everyone else IMO, including and especially public sector final salary schemes, and has already happened to my wife's bank pension of some 21 years standing.... it's worth £20/year). I'd rather enjoy it now, thanks.

It's not as though everyone won't be in the same boat anyway.

You can take it as a lump sum, but that lump sum will still need to last you another 25 years. If you take is a lump sum, you are basically betting that you won't last 25 years, as an annuity that you buy will keep paying out until you die. (it's the same bet the annuity companies are taking though)

No, you can't take it all as a lump sum, can you?

I think you can take some of it, at the expense of a severely reduced annuity.

This was kinda my thought. I take the 6% company pension that my place offer, because free money, but for the rest I put my own money into an ISA that I control and can move it around as and when I need to. I really don't want all my cash for the future tied up in a pension fund that I have no control of and can't access until it might be too late.

Yeah, you've only to look at the Euro and Bank crises to realise that the vast sums of money they're talking about being pumped into propping up that failed currency and profligate, failed states (just as per profligate, failed, fraudulent banks and doomed-to-fail political union) - is people's pension funds. And cash savings also, come to that. There's gonna be a whole bunch of very pissed off Germans in another 10 years or so, possibly less.

No thanks, I'll stick to bricks and mortar; 'real' assets and 'real' things, that I can control (and defend, up to a point). Sorry if that sounds melodramatic, but there we are.

I think if things collapsed to that sort of extent then you'd be better off investing in tins of beans and assault rifles.

You're correct, I didn't know that. Seems you can only take it all as a lump sum if it worth less than £18000, which is fuck all!

That's just how it see it going? It is ALREADY going like that, very much so. People haven't woken up to it yet, but they sure will.

I'm wasn't disputing that you might be right. Just saying that I think things would be really bad.

Give me £18,000.

I don't need that much money, so if things go according to plan, I'm going to retire at around 40, and find a successor to run SavyGamer. Hopefully by that time (I've got ~15 years to go) it's earning enough for me to draw a decent salary and pay someone else a fair salary to run the site.

Edit: Or I *might* sell out if the price is right.

To live on for 25 years+

It would be a cracking first month though.

Ah wait! Bricks and mortar! That's my pension as it stands. We have two houses. The mortgages on both should will be long gone before retirement and the rental income will help keep me in e's and wizz.

The problem with Pension fund it seems is that they are the hardest thing ever to work out how much money is in them, at how much risk and how much the pension adviser/company is skimming off the top. I seem to have a good idea of 2 of them but not the third.

*Starts making drugs to sell to DavPaz*

Pension plan: Sorted.

To be fair mate, that's a pretty sorted plan IMO.
(Apart from the Es and 'Billy', obv. )

I'll only charge him mates rates.

For the first week.

"'Rails' for pensioners"... sounds almost respectable!

Investments often work on a 20%/2% thingymdoodah.
In private equity, where pension firms commonly invest, this works on a 20%-2% basis. Fund management fees will be normally 2% of invested capital, and the fund takes teh first 20% of any profit. Or: Poor people give well off people money who take a cut who give it to rich people who take a cut who give it to lots of posisbly soon to be rich people who then give it back and more to teh rich people who take a cut who give it to the well off people who take a cut and trhen the poor people get it back after ten eyars and everyone goes away happy.

Oooh, get you, Billy Two Houses

I still have the house up north, but that is by circumstance rather than design, the rent doesn't cover the mortgage, but I'm in negative equity so can't sell it.

Half of me just wants rid at the first opportunity, yet the other half keeps telling me to wait it out and keep it for the future. Keeping it does mean moving out of our flat will be tricky in the medium term though, certainly until the house prices and rents go up. But when that happens we won't be able to afford the house we want anyway

Why do you have savings and a mortgage?

Unless you've found a savings account with higher interest than your mortgage, in which case, clue me in.

I got annoyed at work when they changed our pension provider, we went from a 0.25% management fee to a 0.75% management fee, but it was ok as the new provider had a better website and would send us a dude we could talk to every 6 months if we wanted.
I tried to point out that dude coming round would cost each of us about £30-40k in total in increased fees over the lifetime of the pension. Did they listen, did they fuck. Bloody HR shouldn't be given responsibility for anything that matters.

"You're investing £6 million, you don't get to discuss terms".



Oh, jesus, yes.

Liquidity. If I put the ISA cash into the mortgage (which isn't a lot, I only started doing it a year or so ago), then I can't get it back if I need it, and with the wedding coming up, I suspect I will

It is terrifying - really terrifying - the number of people in my generation who just think "oh, my house is my pension". All the eggs in one basket, there. And mostly it's because they've either lived beyond their means or effectively (in that they haven't saved) done so in their younger years. Invest early and you don't need to invest anywhere near so much. And can still live the life.

I agree it's going to be bad. I also think we'll see a lot of the people who think they believe in free market opportunities suddenly changing their tune when they realise that the free market allowed them to take out masses of credit, have an entire generation's GDP 'growth' built on said credit and yet didn't at any point explain to them that 'leveraging' your whole salary against the amount of credit you can afford to pay back is actually just mortgaging your whole future.

That said, there's a lot of head in the sand nonsense, too. A quick example - the idea of having (or at least building up to) 3 months salary in the bank in some form as a rainy day fund is standard advice. So standard I must read it four times every year. How many people do that?

I have about 8 months salary in the bank but I know that I'm in the minority there... Also, I still think that I have no money. It's the Scrooge McDuck in me.

<raises hand>

But only in the last 3-4 years, couldn't afford to before then.

Holy FUCK.

Little does Zardoz know that I only get paid £32.50 a month..

Hang on, did I type that out loud? Bugger...

I think that would depend on age. I think it would take about 5 years to build up to that level saving £100 a month against an average salary and the numbers I made up in my head for rent and bills and things.

I like this numbers in head, and think it a good approach.

But still, even that's fair enough - some sort of acknowledgement that building up a savings cushion is a good idea, and some action towards it. Rather, for instance, than thinking "ooh, £100 left, free!"

Also, as much as I hate to say it, lviing with someone helps, greatly. Even if you do have to spend money on going to see their friends.

You're all* going to be automatically enrolled** into a pension scheme in the next few years depending on the size of your employer. One benefit of that is your employer has to stick a percentage in as well.

Starts at a whopping 1% employer contribution so we're all definitely going to live in gold houses with gold hover cars in the future.

* depending on age and earnings yadda yadda
** you can opt out once you're in and get yer cash back