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1 in 8 plan to retire in 2018 with no pension

(33 Posts)
LaraGransnet (GNHQ) Wed 28-Mar-18 09:46:59

We noticed this news story out today and wondered what gransnetters think? When did you start saving into your pension? Was it too late or about right? Do you think younger people these days are more or less aware of how much they need to save towards a pension?

Teetime Wed 28-Mar-18 09:54:49

As a young nurse I didn't want to pay into the pension but there was no option. At the time I could have doe with the money as the wages were very low and in my case all went in childcare. I am so glad I did pay now though. It was the same for DH in local government. Although people may think we had a cosy deal it was a huge chunk out of very low pay for both of us but we are enjoying the benefits now.

Lyndylou Wed 28-Mar-18 09:59:32

I read the article and it states that these 1 in 8 are actually retiring to take their State pension or living off savings. I understand that the State pension is not enough to do everything we want to do but it is still an income, so the headline to this is incorrect. It should read 1 in 8 plan to retire in 2018 with no private or company pension.

Its bad enough, in my view, that the State Pension is now reclassified as a benefit, without it being downgraded to being no pension at all.

Lyndylou Wed 28-Mar-18 10:07:53

I actually didn't start a company pension until my 40s, mainly due to moving around temporary jobs with my RAF husband. I'm really glad I did as it means two equal payments a month with my State pension, and my partner never paid into any pension scheme at all so he only has the State pension. (He does seem determined to work till he drops though!) However despite me having all the relevant NI years paid, he still gets nearly twice as much State Pension as me!

Charleygirl Wed 28-Mar-18 10:14:04

I cannot persuade one of my nephews to start saving for his pension- he thinks of today and not the distant tomorrow.

I had no choice and I was so glad when I was 60 that I could retire with my work pension followed 6 months later with my state pension.

I know for certain that I could not run a house and a car having a state pension only.

jusnoneed Wed 28-Mar-18 10:35:46

I never saved in a pension, only ever worked part time after starting the family. It was not something that was ever talked about when I was younger and I never earned enough to put funds away until much later. So it will be the state one and my savings plus what I will inherit from sale of property at some point.
My son (in 20's) saves in a pension started when the government introduced the works pension scheme about 4/5 years ago.

paddyann Wed 28-Mar-18 10:56:04

started our pension when we were in our mid twenties .It promised a decent income and a good lump sum.....ha ha ha .The reality is we took out what there was as soon as we could and bought properties to give us an income when we retire .The government messing with the pension made it less than worthwhile

Luckygirl Wed 28-Mar-18 11:03:56

I didn't either. And for a while I opted out of LA pension scheme as we were so poor. I opted back in eventually but earned little pension from it.

We downsized and invested the balance, then ditto when parents died. We get by.

GracesGranMK2 Wed 28-Mar-18 11:48:16

The title is totally incorrect, and I would say it is both belittling and scaremongering for the Independent to say that nearly one in eight people retiring this year have made NO provision for their retirement.

They do then go on to write a more truthful report when they say that 12% have no private or company pension. I would really like to know why anyone assumed that everyone would be able to have these.

This sounds like an advert for the pension companies as it is so biased. It does go on to say that of that 12%, 2% have some form of private savings upon which they will rely. It could be millions and although probably not, all they are actually saying is that they have not saved into an additional private or company pension and helped make the pension companies rich.

Why would anyone, anyone, be surprised that 10% over the last, say 40, years could not afford a private or company pension. Not everyone was offered a company pension. On the wage rates we know have existed and the conditions for all but particularly women, added to by the culture when these women started work, not everyone could afford a private pension.

It looks like the new state pension will be £164.35 pw. If, as the article says, it is £1,450 a year lower than the minimum income standard for a single pensioner established by the Joseph Rowntree Foundation then perhaps the answer is to raise it to around £192.23 so that those who only have the new pension will have enough. For those on the old pension and those who do not get all the basic of the new one the Pension Credit should be raised to the same amount. We have one of the lowest pensions in Europe and this would also help get some people off other benefits. That is surely better than attempting to shame people who can now make no difference to their position.

maryeliza54 Wed 28-Mar-18 11:48:23

I am so grateful that I had to join the pension scheme when I started work after uni. Sometimes we don’t know what’s best for us and I certainly didn’t at 22.

gillybob Wed 28-Mar-18 12:20:19

DH and I have been effectively self employed ( not in a legal sense as we are on PAYE) since 1992 and whilst we did have a small pension pot this has long gone ( along with our house and other assets ) and “ invested “ in our business to keep it afloat .
Neither of us even get regular wages ( as in a set amount every month) and often live on credit cards so no way we could affordto pay into a pension ( DH is 66 now anyway ) DH’s SERP’s from a previous employment have disappeared without trace .

Neither of us have ever / will ever inherit anything and we gave an almost 11 year age gap meaning we can’t even retire on a state pension . All in all we’re in a bit of a mess .

As for this enforced workplace pension it’s a joke that will come back to haunt people in years to come . Companies and employees ( my own included) paying into rapidly formed and inexperienced companies set up to take advantage . Will anyone ever get anything back worth having or will the pension companies use the spoils to fund their own lifestyles and fancy buildings? The jury is out .

Lyndylou Wed 28-Mar-18 12:30:53

Absolutely Gracesgran, especially the piece about the old State Pension being less than the new. That is wrong, all State Pensions should be enough to live on.

Parsleywin Wed 28-Mar-18 13:17:14

How, how can those on the Minimum Wage save - for a pension or anything else?

silverlining48 Wed 28-Mar-18 13:28:57

I started saving as soon as I left school at just 15. And Always saved regularly until retirement. It was believed at that time that everyone should save about 20/25% of income and as I earned £4.10s I saved a pound. it kept me very short after paying housekeeping and my travel, i got the 50p per week as spending money. Not a lot as tights cost almost that. But, It was a good habit and though as time went on. we couldnt always save 25% but did what we coukd. Pennies and pounds etc.
Apart from a mortgage later We had no debt and never bought anything unless we could pay for it. Otherwise we saved for it or went without, it was a tough life, but we were no different to a lot of people at that time.

gillybob Wed 28-Mar-18 13:29:25

The simple answer Parsleywin is that they can’t .

gillybob Wed 28-Mar-18 13:40:57

This has got me really riled and reads as though these people have deliberately chosen not to contribute to a private pension when the reality is probably very different.

GillT57 Wed 28-Mar-18 14:06:40

Heaven only knows what it will be like for the existing 25-45 age group when they retire, at whatever increased age it will be for State Pension. Many will have been renting, possibly relying on HB to pay towards that rent if they live in areas of high housing cost, add this on to child care costs, university expenses for themselves and their children......absolute disaster being ignored by current government of all parties. How do you save for a pension when you work on short term contracts? The workplace has changed and it is not only less skilled employees who are on short term contracts. This generation will not even have the option of downsizing as many of us have, they will likely not own property at all.

Iam64 Wed 28-Mar-18 14:12:26

I always paid so called "full stamp" as advised by older women at work, when I married far too young and could have paid "married woman's stamp"
I divorced having done all manner of part time jobs to fund my then husband's training qualification. My solicitor thought it entertaining that I wanted the financial settlement to reflect the fact he now had 5 years in a pension scheme, supported by myself and I had nothing. When I began my own training qualification in my late 20's I started to pay into a pension scheme. I was very aware that I was at a disadvantage in the longer term, having qualified later in life. I retired with a decent pension as a result. I worked to pay child care in effect for about 5 years but always with the view I'd have a pension when I needed it. Luckily, I did enjoy work though those early years were tough. Good job we had more energy in our 30's than we do now.

VictoriaMeldrew Wed 28-Mar-18 14:18:46

First time posting smile

I would have loved to put money into a private pension. In fact I did. But my husband suggested I take it out as he was much more capable of looking after it than a pension company.

That proved to be true. I divorced and he kept it all. He hardly supported our sons after stopping seeing them and I had to use all my earnings and go into debt to pay the mortgage and bills.

Now I've retired and look at the state pension that I have to live on I have to laugh otherwise I'd cry.

M0nica Wed 28-Mar-18 14:32:42

When I started work, it wasn't a question of choice. I was paying into a pension from 21 because I worked for big companies and you had no choice. I also had no choice when all my contributions were repaid to me when I left these companies because to become a deferred pensioner I had to work for them for 5 years and I hadn't.

Even when I returned to work after my home-based years I couldn't join the pension scheme, because I worked part time and part timers were excluded from the pension scheme

So it wasn't until I was 40 and returned to work full time that I could actually join a pension scheme and I immediately started paying Additional Voluntary Contributions as well as the standard amount. Every time I got a pay rise, I increased the amount I paid in AVCs, until I reached the maximum amount allowed by the government, which was 17.5%.

I had intended to work until 65, even though I could get the state pension at 60, but when I was in my mid 50s, my employer had to make major changes to the way it was run and cut its labour force by 35,000. They set up a very generous redundancy scheme and if you were over 50 it was exceptionally generous so unless you were very sure of your future, you grabbed the chance and left. I decided that although I did not want to go, it was in my best interest to do so. As part of the redundancy package, I could invest most of my redundancy money into the pension fund to buy extra pensionable years, so I did.

When I stopped work, I found it impossible to get another job, but I had a small pension from the day of my redundancy and I continued to make voluntary contributions to my state pension.

When I was 60 I got my state pension, not a full one, but with Graduated Pension and some of my SERPS, it is above the basic level and my occupational pension went up as well as I started to receive the extra pension my AVCs earned so I receive about half the pension I would have got if I had worked for my employer for 40 years. I actually worked 11.

I have been fortunate to have a career with a high enough salary to be able to afford to contribute voluntary as well as compulsory payments to an occupational pension.

But before the late 1980s, many women and some men were unable to save into works based pensions because of all the rules about minimum contribution records and the exclusion of part timers from pension schemes.

gillybob Wed 28-Mar-18 14:41:53

I always paid the full stamp too and have worked since 16 with only a couple of months off to have my children. Women of my age (56) have been cheated big style and will have paid over 50 years of full stamp before getting the state pension (that's unless the goal posts get moved again). DH has always said we will leave work in our coffins and I think he's probably right.

janeainsworth Wed 28-Mar-18 14:44:20

Prudential’s research, which appears annually, found that the numbers retiring without a pension is lower this year than the 14 per cent in 2017 and nearly half the 23 per cent recorded in 2008, but Stan Russell, retirement income expert at the financial services company, said that the figure is still “worrying”.

So, why wasn’t the headline ‘more people than ever before retiring with a private pension to boost their state pension’??

On second thoughts, don’t answer that!

gillybob Wed 28-Mar-18 15:30:34

Because maybe that would give only a present day figure (based on some fortunate 60 somethings of today) and not the 60 somethings of "tomorrow" (the future) many of whom will be working until 70 plus.

Also does £25 per year pension count?

GracesGranMK2 Wed 28-Mar-18 16:02:42

I won't answer janeainsworthgrin but it a very good point.

gillybob Wed 28-Mar-18 16:15:06

I would like to know what actually counts as a pension?

As I said above £25 per year? month?