Big Con

[wbfc]

I used to buy into you work hard to reap reward ...but I am begining to doubt that mantra at all...i am 53 married great wife and daughter with house paid off ...i have saved wisely got £350k in pensions and investments ..but the way things are going from thinking i would have a decent retirement . i think it is going to be a real struggle financially ...

does anybody else worry for their future? are things going to get better or worse??

[ElectroClaret]

I bet a lot of people reading this would wish they had the chance to struggle on
£350,000 worth of investments with their house paid off.

[Rick_Muller]

In what way are things going that mean you’ll experience poor life compared to anyone else?

[Quickenthetempo]

Next you will tell us you have seen the new Burnley shirts before anyone else.

[ClaretinJapan]

You will own nothing and be happy.

[wbfc]

i was just wondering if guys my age had the same concerns...
with hindsight i think i have been a bit self indulgent .. given the response .

[Tricky Trevor]

Our home is named Ferkham Hall and is to all the folk that said we couldn’t retire at 50.
Our former home was paid off and we had a modest works pension plus super ann in the bank.
Retirement is based on your lifestyle. Neither of us smoke or drink, except socially, we don’t buy technology the day it hits the shelves, small car, shop at Lidl/Aldi. We have managed fine and got holidays in every year. Now with the two OAPensions coming in we are more than comfortable but a long way from rich.
If the OP has said amount behind him he/they should have no worries.

[Hipper]

Do these 'investments' include or exclude your house? If 'no' then you have a tidy sum which, unless the economy collapses, will serve you well.

Have you looked into your finances when you retire then? Got estimates of your pension, both state, private or work and your investments? Worked out your likely costs? If not, why not consult an (independent) financial advisor? If desperate your house can be used for Equity Release.

Private pensions are a bit of a gamble because you never know how much pension (annuity) you can buy until the time comes.

I think you have bigger things to worry about - Climate Change and its consequences for you and particularly your daughter and possible grand children.

[taio]

Why is it a big con? The more you have in your retirement fund, the more income you will have in retirement.

From the limited info you've provided, it seems you're on track to have a moderate standard of living in retirement as defined by PLSA ie £31k a year. Many people consider the PLSA amounts to be on the high side.

As it's not a con, if you want more money in retirement then save more into your retirement fund especially with you being mortgage free.

And see a financial adviser if you're concerned.

Seems like you're in a decent position.

[wbfc]

the house is paid off..i have £350k clear but when i had £220k that seemed a lot more in real terms than the larger amount is now ...

i think i will have £30k per year drawing down 4% including state pension ...my wife is 20 years younger and i am mindful to leave some for her ...this is my main worry

I think this is probably not a lot of money in 15 years time

again i appreciate it will be more than some...

i am good at being happy as one poster says but worry more as i get older

[Barry_Chuckle]

my wife is 20 years younger

Thai bride?

[bfcjg]

I'd worry if that revolting disgusting horrendously incompetent Llz Truss ever got near the nations purse strings again,she decimated one of my pensions which means I cannot fully retire yet and have to do part time for a couple of years.
Re your investments, it is all relative, you've worked hard saved and invested so well done,it annoys me when you read the oh aren't you lucky snide comments, we can all save it depends on the amount you can spare. I plan to cut my cloth accordingly when I retire, one of the cars will go,we won't need as many stress releaving holidays etc, and the state pension isn't that bad.

[beeholeclaret]

Our home is named Ferkham Hall and is to all the folk that said we couldn’t retire at 50.
Our former home was paid off and we had a modest works pension plus super ann in the bank.
Retirement is based on your lifestyle. Neither of us smoke or drink, except socially, we don’t buy technology the day it hits the shelves, small car, shop at Lidl/Aldi. We have managed fine and got holidays in every year. Now with the two OAPensions coming in we are more than comfortable but a long way from rich.
If the OP has said amount behind him he/they should have no worries.

These words could have been describing me in general terms. Don’t waste money on things that are unnecessary and hopefully enough money for holidays and other treats.

[taio]

the house is paid off..i have £350k clear but when i had £220k that seemed a lot more in real terms than the larger amount is now ...

i think i will have £30k per year drawing down 4% including state pension ...my wife is 20 years younger and i am mindful to leave some for her ...this is my main worry

I think this is probably not a lot of money in 15 years time

again i appreciate it will be more than some...

i am good at being happy as one poster says but worry more as i get older

It would be good for your wife to have her own retirement fund if she hasn't already, or to pay more in if her contributions are modest. The tax benefits are very good. At 33, she has plenty of time but important to do as early as possible because of the compounding effects. On the face of it, she could accumulate a retirement fund of a few hundred grand prior to retirement. It's an important subject to raise - far too many people don't sufficiently plan and prepare.

[Anonymous Claret]

You will own nothing and be happy.

'You will eat ze bugs'

[Swizzlestick]

It’s increasingly difficult to know when somebody is taking the mick on here these days.

[Colburn_Claret]

Having just retired, woop doo, I can't see you having any problem surviving on that.
I would recommend to anyone who has a large pot. Take your 25% tax free. Place as much as you can in tax free isa with high interest rate, and the rest in high interest short term bonds. The interest is a big boost to your pensions.

If your partner has worked and has a pension of their own, don't reduce your own pension by leaving them anything after your death. They don't need it, and they'll make much more inheriting the savings accounts.

[CaptJohn]

I think that you are asking a reasonable question that too few people ask themselves. Perhaps the title of your message was misleading though. For some reason pensions and funding their lifestyle post retirement are taboo subjects for a lot of people. I genuinely feel that it is a subject that should be taught at secondary school so that people are equipped with the knowledge to ensure that they don't run short of cash in later life. There will always be the disadvantaged few and the lazy sods who will rely on others to provide for them and then moan about not having enough but for most sensible people, with a little knowledge, they should be able to accumulate sufficient savings for a comfortable lifestyle in retirement.

[NewClaret]

...my wife is 20 years younger and i am

Bloody hell, I was starting to feel sorry for you for a minute

[CaptainKirk]

Look at me!
The OP has dug a hole and needs to stop digging methinks.

[ClaretAndJew]

Nearly a half a million pension and a wife 20 years younger.

Woe is me.

[Woonderbah]

...my wife is 20 years younger

Back of the net !

[bfccrazy]

It's what you make of it... I never really thiught about retirement til a few years ago (I'm 34) and just had the youthful "it'll be reyt" attitude.

I put a grand a month away into my pension now which SHOULD help me "catch up" and be alright by retirement time as well as having a full state pension when that time comes. It's something I never thought I'd concentrate on a few years ago but now I look back and wish I'd started putting money away much earlier in hindsight.

350k sounds like a decent enough retirement amount to me especially with no mortgage etc.... ;

[Corky]

I worked for 40 years at, what by the time I had retired had become Royal Mail. I got a final salary pension, lucky me!! Whilst £350k seems like a lot, each year our Pensions people would send out details telling us how well our pension was doing and I seem to recall just prior to retiring that it advised me that if I wanted the type of pension pot I was due to get at 60 then I would need to invest £750,000. My pension was based on a lump sum of 3/80th of my final salary and an annual pension of 1/80th both multiplied by the number of years service I had done. So £350k doesn’t sound that good!!!

[wbfc]

just a small doubt ....i am lucky i guess but my first wife died when she was 35 and became paralaysed for the last 3 years of her life ...we had no financial assistance ...i had to pay mortgage and rent an appartment she could access

i kept going but i am sure i had either denial or PTSD for several years ...

i am very confident and make my own decisions but i just wondered how other people were coping..

these are challenging times and if it gets worse i am for the people who do not worry but i have started to

[Jakubclaret]

What will be will be. Save the worrying for when it happens if it happens. Live for today & tomorrow will take care of itself

[ClaretAndJew]

Here's a question:

Should state pension be given to people with high private pensions?

Sounds like a whacky thought, but... doesn't get discussed. Wonder how much we could save as a nation if we didn't give state pension on top of high private ones.

We wouldn't give Universal Credit to someone with £20k in savings, so why a state pension to people with private ones?

[ClaretPete001]

Here's a question:

Should state pension be given to people with high private pensions?

Sounds like a whacky thought, but... doesn't get discussed. Wonder how much we could save as a nation if we didn't give state pension on top of high private ones.

We wouldn't give Universal Credit to someone with £20k in savings, so why a state pension to people with private ones?

Do you include Final salary pension for Teachers and Public Servant Pensions in that, which for the most part are worth much more than £350,000?

[CleggHall]

Received my state pension this morning, £896 every 4 weeks, not to be sniffed at but freezing of personal tax allowances is hitting us all.

[Woodleyclaret]

Personal tax allowance needs raising to £25,000
This will allow pensioners (like me) to get our actual pension without the parasites at the IRS taking some in tax .In my case £200/ month.I spent 45 yrs teaching and paid into our obligatory scheme and foolishly assumed I would get to keep all my pension.

[CrosspoolClarets]

No doubts a retirement crisis is coming in the next few decades. People don’t save enough and basic costs like food and energy are higher than ever.

The state pension is equivalent to a fairly sizeable SIPP, it is well into 6 figures, so everyone needs to make sure their entitlement is fully paid up. But on its own it is insufficient to retire on. We cannot means test it, firstly because everyone has already paid in, secondly because it has been promised, and thirdly because people have unknown circumstances and may have desperate need of it (e.g. if an investment in a SIPP collapses).

The final salary pension is overgenerous and no doubt will give a great retirement to those lucky enough to have it. Personally, I would limit it to retirement at, say, 63. I don’t see why people can be entitled to retire in their 50s with decades of being paid out by the taxpayer (for public sector ones). We simply cannot afford that and it is too generous and more than was promised (due to life expectancy).

SIPPs are important for many. Personally, we have less than the OP and it is a concern given how sluggish SIPP growth can be. There needs to be a target income in retirement and £50,000 for a couple feels important for “comfortable” retirement, incl. new gadgets, cars and holidays. That is thus £30k plus the state pension each. The SIPP pot needs to be somewhere in the £750k area for that to be the income resulting.

So I don’t suggest anyone takes retirement lightly or assumes it is too far in the future to be concerned about.

[AGENT_CLARET]

I used to buy into you work hard to reap reward ...but I am begining to doubt that mantra at all...i am 53 married great wife and daughter with house paid off ...i have saved wisely got £350k in pensions and investments ..but the way things are going from thinking i would have a decent retirement . i think it is going to be a real struggle financially ...

does anybody else worry for their future? are things going to get better or worse??

Shall we set up a crowd funding page for you

[ClaretAndJew]

Do you include Final salary pension for Teachers and Public Servant Pensions in that, which for the most part are worth much more than £350,000?

I don't know much about it, but I guess anyone with the ability to sustain their lifestyle after they retire without the need of state pension.

[Claretforever]

Here's a question:

Should state pension be given to people with high private pensions?

Sounds like a whacky thought, but... doesn't get discussed. Wonder how much we could save as a nation if we didn't give state pension on top of high private ones.

We wouldn't give Universal Credit to someone with £20k in savings, so why a state pension to people with private ones?

What do you class as a high private pension, and who gets to define that?

And why should people who have sacrificed a chunk of their salary to top up a small state pension, that they’ve paid into via taxes all their life whilst also paying towards the benefits and pension stamps of the sick, lame and lazy, be punished for that?

[ClaretAndJew]

What do you class as a high private pension, and who gets to define that?

And why should people who have sacrificed a chunk of their salary to top up a small state pension, that they’ve paid into via taxes all their life whilst also paying towards the benefits and pension stamps of the sick, lame and lazy, be punished for that?

I'm not saying they should. It's just a thought.

In terms of what is classed as high, I guess anything above the normal standard of what a state pension would give you if that is all you relied on.

And, I guess, people pay into taxes and N.I their whole lives and don't always get things back from it, NHS for example.

Someone who has worked for 45 years who needs Universal Credit because they can no longer work who has 16k+ in savings isn't eligible for it, but they have paid into the pot all their lives. Why should it kick in after they retire but not before? Despite savings.

It's just interesting.

[Stockbrokerbelt]

Come & move to Spain where people come first, a country of people who smile & where they hold their politicians to account, 5% growth again this year & they invest in their own infrastructure. Choose wisely but the south of Spain is gorgeous & has it all.

[ClaretAndJew]

Come & move to Spain where people come first, a country of people who smile & where they hold their politicians to account, 5% growth again this year & they invest in their own infrastructure. Choose wisely but the south of Spain is gorgeous & has it all.

With people complaining about immigration into the UK, it wouldn't really add up to move to another country.

[daveisaclaret]

No mention of a £4k watch? This place is losing its touch

[pompeyclaret]

£350k seems a decent pension at early 50's.

I feel lucky to think by 60 I'd be mortgage free and with circa £250k in my pension, and earn a decent wedge. Guess I'd have more if not for the 1st wife, but that's another story.

Do think state pension should be removed for some - now how you calculate I don't know, but if you said assets of £500k and annual earnings of £50k, I think that's a low enough bar to not feel like those were being punished unfairly. I pay lots of tax, and know I don't get it all back, nor does it go into a separate pot for pensions/ health..

[Neil]

No mention of a £4k watch? This place is losing its touch

Just what I was thinking. Seen posters destroyed for less

[boatshed bill]

I looked at this thread thinking it might be about some legendary Scotsman.
I'm very disappointed.

[Claretforever]

I'm not saying they should. It's just a thought.

In terms of what is classed as high, I guess anything above the normal standard of what a state pension would give you if that is all you relied on.

And, I guess, people pay into taxes and N.I their whole lives and don't always get things back from it, NHS for example.

Someone who has worked for 45 years who needs Universal Credit because they can no longer work who has 16k+ in savings isn't eligible for it, but they have paid into the pot all their lives. Why should it kick in after they retire but not before? Despite savings.

It's just interesting.

Wouldn’t that encourage people to say sod it, I’ll spend my money on holidays, fancy cars, perhaps put chunks of money into my children’s accounts, hide it even, so that I’m not penalised for saving/investing it?

When you first commented I was hoping you meant those with pension pots of, say, greater than a one million or something.

Using the OP as an example, if my maths are correct, or close, then a £350K pension pot might only provide around £1,400 per month after tax, or £1,100 per month should they sensibly take the 25% tax free amount out. I’m happy for someone else to provide more accuracy on that. I think the average UK salary is now close to £2,000 net per month for comparison.

£350K sounds a lot if you’re (not you personally) in your 20’s or 30’s, or maybe don’t have a private pension, and it’s good but it’s not huge, especially if you don’t want to work until you’re almost 70. Did I see 75 being mentioned as a possible age for retirement? Maybe I’ve made that bit up?

[IanMcL]

I'd worry if that revolting disgusting horrendously incompetent Llz Truss ever got near the nations purse strings again,she decimated one of my pensions which means I cannot fully retire yet and have to do part time for a couple of years.
Re your investments, it is all relative, you've worked hard saved and invested so well done,it annoys me when you read the oh aren't you lucky snide comments, we can all save it depends on the amount you can spare. I plan to cut my cloth accordingly when I retire, one of the cars will go,we won't need as many stress releaving holidays etc, and the state pension isn't that bad.

Not to mention George Osborne releasing pensions for people to spend. That is the essence of a reasonable life when you are unable to work.

[Bosscat]

Received my state pension this morning, £896 every 4 weeks, not to be sniffed at but freezing of personal tax allowances is hitting us all.

Mine starts end of this month. Will bump me back into paying tax on my pvt pension ... bummer.

[Foshiznik]

No doubts a retirement crisis is coming in the next few decades. People don’t save enough and basic costs like food and energy are higher than ever.

The state pension is equivalent to a fairly sizeable SIPP, it is well into 6 figures, so everyone needs to make sure their entitlement is fully paid up. But on its own it is insufficient to retire on. We cannot means test it, firstly because everyone has already paid in, secondly because it has been promised, and thirdly because people have unknown circumstances and may have desperate need of it (e.g. if an investment in a SIPP collapses).

The final salary pension is overgenerous and no doubt will give a great retirement to those lucky enough to have it. Personally, I would limit it to retirement at, say, 63. I don’t see why people can be entitled to retire in their 50s with decades of being paid out by the taxpayer (for public sector ones). We simply cannot afford that and it is too generous and more than was promised (due to life expectancy).

SIPPs are important for many. Personally, we have less than the OP and it is a concern given how sluggish SIPP growth can be. There needs to be a target income in retirement and £50,000 for a couple feels important for “comfortable” retirement, incl. new gadgets, cars and holidays. That is thus £30k plus the state pension each. The SIPP pot needs to be somewhere in the £750k area for that to be the income resulting.

So I don’t suggest anyone takes retirement lightly or assumes it is too far in the future to be concerned about.

Public sector workers already had the pay froze in 2010-2014 then 0.6% rises 2014-2020 and 2% 2021-present and had their pensions changed from final salary to career average in mid-late 2010s so I think it would be unfair to specifically target those folks again to save money especially as skill retention within the sector is already hard enough with these aforementioned “benefits” compared to higher paying private sector equivalents. It’s usually the first aspect to be cut by the government though so suspect will be blamed again rather than looking elsewhere to pull in the public purse strings.

Those in favour of such targeting usually miss the point that it’s not just public sector workers who suffer from this action but everyone who needs a passports, taxes/pension issues fixing, medical waiting lists, courts, etc. too.

[ALP]

I used to buy into you work hard to reap reward ...but I am begining to doubt that mantra at all...i am 53 married great wife and daughter with house paid off ...i have saved wisely got £350k in pensions and investments ..but the way things are going from thinking i would have a decent retirement . i think it is going to be a real struggle financially ...

does anybody else worry for their future? are things going to get better or worse??

I always worried but when I was coming up to 60 I said to my Wife, I’m retiring; ‘go for it’ was her reply. We don’t have a lavish lifestyle, but three years in it’s the best decision in my working life. My pension isn’t huge but we do OK, I top it up with some photography, but never in my days did I think I could do it; I did and I love life more than ever. Have zero fear, you’ll always make a go of it.

[GetIntoEm]

I think he's concerns are valid.

Based on estimates and advice we have been given me and my wife should need £1.25m between us to have a decent lifestyle in retirement.

We are early 40s, we currently have about £150k between us plus our home when it's paid off.

It's a concern how we will reach that target number. We put about £900 a month each into our pensions currently.

[clarethomer]

t
i think i will have £30k per year drawing down 4% including state pension ...my wife is 20 years younger and i am mindful to leave some for her ...this is my main worry

Seek financial advice when you get within 5 years of your intended retirement age and at least 12 months before at the latest. You would benefit from getting some cashflow plans done as they will be able to give you some indicative figures for amounts you can spend and likelihood of this lasting you throughout your retirement and whether there would be any money left at the end of it.

The 4% rule is something that has been spouted about for a long time - this isn't right for most people and is a simplistic model that is easy for people to get a starting point like you have but it's not something you should rely on.

You need to consider that you would probably want to spend more in your 60's and 70's than you would in your 80's as an example. You need to think about how you manage your money in different market conditions and thing about sequencing risk (i.e. the impacts that follow something that happens in the market).

This chartered financial planner on youtube has loads of content which is explained well and may help you with some of your concerns/thinking https://www.youtube.com/@JamesShack/featured

[Big Vinny K]

Usual sniping on this thread I see but some sensible posts too.
The OP is in a decent position and whilst some people think that may be a big pension to fall back on it may have to last 30 or 40 years. The over 85 demographic has been the fastest growing part of the population in the UK for the last decade at least. More and more people are ending up in care homes and it would only take a couple of years of paying care costs to wipe out a lot of peoples savings and assets.

Whether you worry or how much you worry is all down to your individual circumstances and what you want to do in later life. Of course it’s all relative - there will always be a lot of people richer and poorer than you but how does that fact help you worry less ? You can only think about your own circumstances and that of the family you are wanting to look after.

What I would agree with is the point someone made above about going to see a financial advisor. 53 is a good age to start trying to plan your retirement or whatever it is you are trying to do. They will discuss with you your priorities and your overall financial picture and put forward various options for you to consider. Not only could it be worth it to start getting your affairs in order it might also help you worry less about the future.

[clarethomer]

I think he's concerns are valid.

Based on estimates and advice we have been given me and my wife should need £1.25m between us to have a decent lifestyle in retirement.

We are early 40s, we currently have about £150k between us plus our home when it's paid off.

It's a concern how we will reach that target number. We put about £900 a month each into our pensions currently.

Sounds like you are probably all over it but food for thought just in case.

£150k with £900 and an average 6% return over 25years with the £900 increasing by 1% each year to represent a pay rise shows you will have £1.53m. This ignore any charges and inflation you may be incurring - so would need that return after both of these if the £1.25m is considered for inflation also. This is using a simple compound returns calc.

Ensure you are maximising employer matching if that is available.

Review your fund in your pension schemes. If they are in the default fund you may find out that these are not optimised for anyone with such a long distance to go before accessing the fund.

Personally, I have put mine in a passive fund that tracks global markets. Its considered high risk (which means it can be more volatile than lower risk funds) but over a 20+ year time horizon this risk will naturally lesson as you benefit from time in the market.

The other benefit of a passive fund is that you are not paying for active management and therefore you can reduce the charges on your pension and it means in tougher market conditions where returns may be less your not also getting stung by higher charges. I'm not aware of any active manager who will beat a passive fund over 20+ years.