Silly to Save?

Movedalot

You said ''I think older people tend to be more frugal than younger ones, probably why we have some money to think about''.

In our family we try to build on what the previous generation has done.

My great great grandparents lived in rented accommodation and my great grandparents finished life in a 3 bedroom semi which they owned
My grandparents finished life in a small dethatched house and my father finished life in a large detached house which I have now inherited.
Both of my daughters got a substantial part of the proceeds of the house which I owned in London and my mother in laws estate along with money bought in to the marriage by their husbands and now own detached houses with no mortgage.

I am hoping that the money from my house will go to my granddaughters and they will build on what the previous generations have done.

I do not intend to get married again and cause that build up to break.

Frank

Agree Alie never seen the logic behind changing something just for the sake of it or for appearance sake. Just bought a new car to replace one that was 12/13 years old and this one will probably last even longer as our mileage has reduced. I think older people tend to be more frugal than younger ones, probably why we have some money to think about.

But then I grew up just after the war....

About household equipment, I reckon if it ain't broke, don't replace it!

Unless you absolutely hate it of course....

* grannygear*, it is not the emergencies you expect, but the ones you don't. 18 months ago our daughter was seriously injured in a road accident. She was 10 days in hospital then needed full time care for two months after discharge. We live 60 miles away and spent two months commuting between our home and hers to look after her. We couldn't bring back to our house because of her regular visits to the local hospital for continued treatment. My husband had to decline several short term work opportunities.

A compensation claim is now being negotiated and we had to calculate how much we spent supporting her. Between petrol, hospital car park fees and meals on the go the bill comes to nearly £2,000 and that does not include a loan to help her buy a replacement car as hers was written off or DH's lost earnings.

No pockets in a shroud, but do you want to live your last few years, when they arrive, in minor, or even major discomfort because you have run out of cash earlier than you thought and leave your children to pay for your funeral?

Well Hunter they may not be as good as yours but they are way better than private ones!

Movedalot

I am not so sure public sector or bank pensions are so good now.
My bank pension was paid ok but my wife passed away in service and half of her pension came payable to me from when she would have been 60.
On the letter I received after her death it said that the pension trustees would be in contact 6 months before the pension became payable.
I contacted them 5 months before to be told that the bank had changed its policy and was paying the pension from the 60th birthday of the surviving spouse.
My wife had also paid in AVC'S and done bonus sacrifices for additional pension and she had taken the option to have half of these paid as a widows pension in return for a lower pension from these had she survived.
I was told that this had changed and they were now only paying AVC and bonus sacrifice pension if the employee was still alive.
I did take the matter to a solicitor and after some argument the bank honoured its commitment.
In respect of my council pension I had paid a lot of AVC's during the 5 years I worked for it.
I was made redundant and an immediate pension became payable.
The pension department sent me a letter saying the standard pension was payable but it did not mention the AVC pension.
The pension scheme then sent me a letter saying they were unable to trace my AVC payments and I then scanned copies of my salary slips and statements to them.
It took 4 months for this to be sorted out and I was paid no pension during that time.
Only when I threatened to bring a solicitor in the AVC's were conveniently found and I was paid the arrears.

Frank

GrannyGear

I see what you are saying.
Some people said when I inherited my parents house I should have thrown out all the furniture etc and bought new.
I did not think that made sense as most of the furniture is very good quality and may be in use in 100 years time.
The bath room and kitchen was renewed in 2009.
The central heating was mainly replaced in 2010 and the house was fully decorated the same year.
Since Dad has passed away I have had a new 3 piece suite and all of the down stairs and hall and landing carpets replaced.
If at any point somebody else came to live in the house I may replace 2 of the beds but the other 2 are very good so I am not replacing any at the moment.
Another thing I will do is have electric garage doors if the present ones become a problem but I don't see a need to replace perfectly good up and over doors at this stage.
I have had automatic cars since my 20's on the advice of a doctor who operated on my ankle.
Clutches were a lot heavier to push in those days.
If the operation had been done today I am nut sure if the doctor would have given the same advice but I can not go back to him as I know for a fact that he is now deceased.

Frank

My original posting was talking about "disposable income" ie what you have left over - if you are lucky - after you have paid regular outgoings, food, heating, rent, council tax etc.
Mention was made of various household items, eg new furniture, cookers etc. These are exactly the sort of things I suggest you should buy now if your circumstances allow it. Better to spend on something like replacement central heating or a new bed which will at least make your present situation more comfortable than put aside cash for some possible future contingency that might never arise. As one of our friends is fond of quoting "there are no pockets in shrouds".

Most of my non pension money is in 5 year accounts and I have about 20% maturing each year.
I don't think I will ever qualify for benefits because of the level of my occupational pension.
If you have no offspring you may not want to invest in accounts of more than about a 2 year term once you get to about 75.
Also if you can afford it some of your savings could be used for the benefit of your offspring.

Frank

When you look at a sum of money, whether in a building society or your purse, yes it will be worth less in ten years time but the money in the building society will be accruing interest at compound interest, that is each year not only will the lump sum earn interest, so will the interest already earned and over a ten year period that can be quite substantial.

At the moment interests rates are at a historic low level, but no interest rate is set in stone and in time they will rise again. We can probably all remember when interest rates were around 10% and mortgage rates around 15%. Times, and interest rates, do change. Building Societies also pay higher rates if you can leave the money in for longer terms or you invest them in bonds.

As well, as Frank points out, there are always going to be the emergencies, replacing household goods, cars, large repairs and a whole lot of foreseeable, and unforeseeable emergencies that might arise when having a saved cash cushion is essential.

Long term saving also has its advanatages, more money to fund your retirement - and the new fixed rate pension will take away a lot of the disadvantages of savings when your pension income is low. There is a lot to be said, even then, for keeping your savings close to the maximum allowed before benefits income is affected.

What savings can give you is peace of mind Two years ago our car broke down on a long journey north to celebrate a family occasion. We handed our car to AA Relay, they gave us a lift to a car hire company and within an hour we were on our way again. Car hire does not come cheap, but we could do it without worry because we knew we had a building society account with money in it to pay for just such emergencies.

Grannyknot the high street banks are not always the best place to save anyway. I hope you enjoyed walking out without their 'offer'!

Hunter you are one of the few lucky ones, mos0 tof us don't have index linked pensions even though we may well have contributed much more than you into our company pensions. We are at the mercy of the annuity providers which leaves us with a great dissadvantage compared to those in, primarily, the public sector.

A helpful suggestion for anyone looking for a good home for their saving is to go a lot further through the search engine than the comparison sites. I am just setting up a regular saver at 4% which will, hopefully, keep pace with inflation. I will simply transfer some each month from a less good account. They are there but you have to look long and hard and live near, or be able to travel to, one of their branches.

I agree as to 'what's the point?' I was in the bank the other day for some other reason (not a savings review) when the young woman looking at my accounts said "Ooh but with your savings you should be looking at A, B and C; you should be doing X, Y and Z with this amount of money, because you could get a bonus". I said "So why haven't I been contacted and told about it by my bank?" She actually replied "Oh, the bank won't contact you, it's just when you ask for a savings review". Then she did some calculations and I leaned forward eagerly and awaited the sum of the potential "bonus" over one year for my not insignificant amount of savings - £16.00. LOL. Coffee and cake for one on the high street.

Movedalot

I agree the government wants us to spend.
I think it does want us to save for if we need care or not have any owned house tied up in such a way that it can not be sold by the council to pay care home fees.
In my fathers case he spent most of his money when I inherited half of my parental home and went and lived there.
Dad never went in to care but we knew the council would have had to have paid if he had because I was an owner occupier.

Frank

glammanana

What I am saying is when I was at work I put a lot of my spare money in to my pension so I finished my working life with more pension but probably with a lot less savings than most people in my type of job had.
The pension is index linked so I think I did the best thing especially as most of us finished work well before 60 and could be in retirement for 40 years.
On the savings side I did land up with more than expected in my late 50's as I went to live with Dad and sold my house. I owned half of that house through inheritance from my mother so I knew the house could not be taken for care fees if Dad had to go in to care.

Some of the people I worked with are now regretting they never joined the pension scheme and it is now too late as they have retired.

There are others who wished they had saved a bit less and put a bit more in the pension scheme and others think now they should have saved more and not put so much I to their pension.

I have no sympathy for the people who did not save or put anything in to the pension scheme.

It is however difficult to get the balance between savings and pension correct as you are guessing what your circumstances will be in the future.

Frank

I can see what the OP is saying, but disagree that the government wants us to save, I don't think they have been saying that recently and everything they are doing is sending out a message telling people not to save. Their policies are directly responsible for savings interest going down to the level where it no longer keeps up with inflation. Pension annuity rates have fallen dramatically and those who saved in the schemes believing they would have a good retirement are finding out that they have been missled all along. I don't think I would be recommending long term savings at the moment. The competition has been taken out of the industry by regulations which require them to keep us informed when a bonus scheme runs out etc. all of which costs them money. In the past it was up to each one of us to be vigilant which is hardly a chore.

I think the government wants us all to spend as much as we can for the good of the country and if we want something we have it now knowing that our savings are being depleted all the time. We are not extravagent but do not deny ourselves as presumably the time will come when travelling and going out as much as we do will not interest us.

I think the approach to income expenditure and savings needs to be considered in the light that you don't know how long you will live and you can't live comfortably without spending money.

If you are retiring with a pension enough to provide all your needs with a litle over then it's common sense to put money asside to replace future spends e.g washing machine, fridge, furniture, new central heating system, upgrading electrics and maintaining your home at the very least.

Throw into that major spends like a car, new kitchen, bathroom etc

All the above is just managing your home, then you look at spending for holidays, christmas and birthday presents, weddings grand children it goes on and on.

Obviously it's a different matter if you are living on a tight budget with little to spare but even then you would need to budget agressively otherwise you may have some very sleepless nights worrying about how the next bill will be paid.

I lived on a very tight budget in my younger years so I am very good at managing money the one thing you can't do is smoke, drink excessively, gamble or own a car these things will eat your money like nothing else.

I find it difficult to understand why it is "too late for most people on this site" do you think we are all in our dotage ? being in your early 60's is not old at all we could easily have another 30+ years left to enjoy our lives

GrannyGear

I can see what you are saying but certain things have to be saved for.
Cars need to be replaced and things like carpets and as I am 64 I think I will need at least 1 more kitchen and bathroom in my life.
I know it is too late for most people on this site but instead of saving I put extra contributions in to my occupational scheme which pays an index linked pension.
Sadly my wife passed away and I inherited half of my parental home the same year and I got early retirement.
My house was sold and I did get the proceeds from the sale.
My mother in law then passed away and her estate was willed direct to my 2 daughters.
They invested it and then used it to buy their first houses.
Oddly some people did visit my mother in law and as it turned out they were from her side of the family.
When they came in she did not initially recognise them but I recognised 2 of them from their voice.
They wanted her to will her estate to other members of the family saying that if she willed the money to her granddaughters at such a young age it would just get spent on drink and drugs.
My mother in law did not alter her will.
Out of interest a teacher at my 2 daughters school said she saw my daughters being offered drugs but they gave the person a very rude refusal. The teacher said she did not think my daughters realised she was behind them and she said that it was the first time she had heard them being rude but she understood the reasons why.
I have also never known either one to be drunk.
They both drive but they go by public transport if they intend to drink or ask me for a lift.

Ffank