Pensions

[hampshireblue]

I suspect most private pensions will have peaked for the forseeable future. I'm happy with my 14% rise over the last year and even happier that I was a chicken and put 3 years' worth of drawdown into my SIPP cash fund so protecting against just what is occuring now (albeit 18 months ago). It may have cost a few £000 in lower portfolio growth but definitely worth it for the peace of mind I have right now. Time will tell. Good luck all, it may be a bit of a bumpy ride for a while.

 

[jrb]

£15K down since Trump started his war against Iran.

It will come back over time, especially if Trump ends his war with Iran, but I’m sick of Trump’s Snakes and Ladders.Trump has setback my plans on various life changing plans and purchases. Give me some economic and stock market stability you perma-tanned ****! It’s OK for you, you’re a billionaire!

Not that I'm accusing Trump of manipulating the stock markets by his daily announcements and subsequent u-turns.

As the President of the USA, he can do anything he wants to do, right?

 

[carlosthejackal]

Anyone ever got pension redress for transferring from one provider to another? Got a letter today offering me financial compensation, just wondering how the pension provider arrives at the figure ?

 

[Ho Chi Man City]

Anyone ever got pension redress for transferring from one provider to another? Got a letter today offering me financial compensation, just wondering how the pension provider arrives at the figure ?

My mate cashed in two pensions in his mid 50’s after advice from a Financial Adviser. Took action later against mis-sold advice and got two payouts of 85k each. I don’t know the full story as it’s obviously a private matter but that’s the nuts and bolts of it.

 

[Citizen of Legoland]

Three quarters of workers not on track for 'moderate' pension income, report suggests

A newly-published report suggests a moderate lifestyle in retirement costs £32,700 for one person and £45,400 for two.

www.bbc.co.uk

 

[denislawsbackheel]

Even more shocking, according to Wiki,

Around 45% of working-age adults in the UK (approximately 18 million people) are making no pension provision at all, meaning they are heading into retirement with no private or workplace savings. The self-employed, low earners, and certain minority ethnic groups face the lowest participation rates.
While automatic enrolment has successfully encouraged saving among eligible employees, gaps remain. Key figures outlining pension saving trends include:

• Non-Savers: 45% of working-age adults save nothing into a pension, despite nearly half of these non-savers being in active employment.
• The Self-Employed: Just 4% of wholly self-employed workers are actively saving for retirement.
• Opt-outs & Undersaving: Roughly 38% of UK adults aged 40 to 75 have no pension or personal savings at all, putting many at risk of not meeting even minimum living standards in retirement.

 

[Blue Since 76]

Three quarters of workers not on track for 'moderate' pension income, report suggests

A newly-published report suggests a moderate lifestyle in retirement costs £32,700 for one person and £45,400 for two.

www.bbc.co.uk

I'm shocked they think your need £45k for a moderate lifestyle. If you're renting it'll be different, but otherwise you can assume that mortgage is paid off and you're no longer supporting kids.

If I take out pension and ISA contributions, plus support for the lad at uni, we spend nowhere near that amount per year. Yes, we're working so time poor, but surely I can't spend that much at the National Trust cafe!

 

[Citizen of Legoland]

I'm shocked they think your need £45k for a moderate lifestyle. If you're renting it'll be different, but otherwise you can assume that mortgage is paid off and you're no longer supporting kids.

If I take out pension and ISA contributions, plus support for the lad at uni, we spend nowhere near that amount per year. Yes, we're working so time poor, but surely I can't spend that much at the National Trust cafe!

It’s difficult to know how much one will need. I have made an estimate of what I need per month on a few occasions but when I am between assignments, and have no wage, I find my savings go down a lot faster than I expect so I am definitely underestimating. I keep pushing my retirement back as some of these articles throw confusion into the mix. As far as I can tell Pensions UK represent the pension funds so maybe that’s why they are pushing for people to invest more, a cynical view perhaps. A more holistic view is that generally lots of people are avoiding making enough provision for their own retirement and they are just bringing it to the attention of the masses.

 

[East Level 2]

I'm shocked they think your need £45k for a moderate lifestyle. If you're renting it'll be different, but otherwise you can assume that mortgage is paid off and you're no longer supporting kids.

If I take out pension and ISA contributions, plus support for the lad at uni, we spend nowhere near that amount per year. Yes, we're working so time poor, but surely I can't spend that much at the National Trust cafe!

Average UK wage is around £39k according to a couple of sources and many retirement advice sites suggest you should aim for a pension of 2/3 of your salary at retirement, so that's £26k. If you retire at state pension age then you need a pension of £14k to reach the £26k target.
This will rise if you want to spend your retirement on expensive holidays or if you have expensive tastes in general.
Most pension value advice seems to be based on having paid off the mortgage and to not be supporting kids or grandkids.
I get by taking £1,200 per month from my draw-down pension in addition to my state pension. It also covers a couple of moderate holidays and trips to CL finals and Wembley (again ole, ole).

 

[Blue Since 76]

It’s difficult to know how much one will need. I have made an estimate of what I need per month on a few occasions but when I am between assignments, and have no wage, I find my savings go down a lot faster than I expect so I am definitely underestimating. I keep pushing my retirement back as some of these articles throw confusion into the mix. As far as I can tell Pensions UK represent the pension funds so maybe that’s why they are pushing for people to invest more, a cynical view perhaps. A more holistic view is that generally lots of people are avoiding making enough provision for their own retirement and they are just bringing it to the attention of the masses.

I agree that most people are planning badly for their pensions, not helped by regulations meaning companies always have to say you could lose money and then providers like Nest putting people in their 20s into low growth funds.

I've been tracking our spending monthly for about three years - basically how much goes in versus how much is spent, minus things we wouldn't need to pay for in retirement - personal pension contributions, ISA savings etc. It can vary a bit month to month - up at Christmas, down over summer if we're away for a couple of weeks etc, but you get a pretty good average of what we currently spend. Always a guess what you'll spend in the future - more free time may mean more days and lunches out, but I won't need to buy suits or pay for trams into the office.

I need to dig into the actual detail of the data to try and understand where they get their values for minimal and moderate from. My concern is I know how much we currently spend, but I'm not sure whether or not that would be expected to go up or down in retirement

 

[Blue Since 76]

Average UK wage is around £39k according to a couple of sources and many retirement advice sites suggest you should aim for a pension of 2/3 of your salary at retirement, so that's £26k. If you retire at state pension age then you need a pension of £14k to reach the £26k target.
This will rise if you want to spend your retirement on expensive holidays or if you have expensive tastes in general.
Most pension value advice seems to be based on having paid off the mortgage and to not be supporting kids or grandkids.
I get by taking £1,200 per month from my draw-down pension in addition to my state pension. It also covers a couple of moderate holidays and trips to CL finals and Wembley (again ole, ole).

The problem with those estimates of the 2/3, as with any other way of estimating it, is that it's based on a complete average, which, by definition, won't fit most people. Even if you take your current salary, whatever that is, it's assuming you basically spend every penny of it every month and don't save. If you do save, and it's probably the only way you're going to get enough to be able to retire anyway, then it throws that calculation completely out.

 

[East Level 2]

The problem with those estimates of the 2/3, as with any other way of estimating it, is that it's based on a complete average, which, by definition, won't fit most people. Even if you take your current salary, whatever that is, it's assuming you basically spend every penny of it every month and don't save. If you do save, and it's probably the only way you're going to get enough to be able to retire anyway, then it throws that calculation completely out.

All very true, which is why pension planning has to be based on individual needs. The 2/3 figure worked well for me but can only be used as a general starting point for many people.

 

[Blue Since 76]

All very true, which is why pension planning has to be based on individual needs. The 2/3 figure worked well for me but can only be used as a general starting point for many people.

Will definitely feel like a leap of faith when we get to that point, but the alternative is over saving and underspending, which the kids might like but feels like a waste!

 

[hampshireblue]

I agree that most people are planning badly for their pensions, not helped by regulations meaning companies always have to say you could lose money and then providers like Nest putting people in their 20s into low growth funds.

I've been tracking our spending monthly for about three years - basically how much goes in versus how much is spent, minus things we wouldn't need to pay for in retirement - personal pension contributions, ISA savings etc. It can vary a bit month to month - up at Christmas, down over summer if we're away for a couple of weeks etc, but you get a pretty good average of what we currently spend. Always a guess what you'll spend in the future - more free time may mean more days and lunches out, but I won't need to buy suits or pay for trams into the office.

I need to dig into the actual detail of the data to try and understand where they get their values for minimal and moderate from. My concern is I know how much we currently spend, but I'm not sure whether or not that would be expected to go up or down in retirement

We've been living off drawdown for the last 9 years with 2 years to go to me getting the state pension. We are living and spending as if I was still working and doing lots of travelling whilst we can. I'm fortunate that my SIPP pot is pretty healthy and still has nearly 20% more than when I started drawdown. I think it all depends how old you are and what you want to do. We could probably cut our food bills by 40% if I could be arsed to drive 10 miles to Aldi rather than a daily 200m walk to Waitrose. My advice would be to expect little change to spending for the first couple of years after retirement then see how it settles down.

 

[Silva Citizen]

I am lucky enough to have a SIPP and a company pension that I contribute to and my employer pays in to.
I am about 2 and a half years away from my planned retirement date. I could take my tax free 25 percent from my SIPP which should last me for that couple of years. That would mean I could pay 100 percent of my wage into my company pension and gain the tax benefits of increasing my wage value by 25 / 40 percent. This would mean I get an inflated 25 percent from the second pension when I retire. Has anyone else used this approach in pension planning ?

 

[blue b4 the moon]

Three quarters of workers not on track for 'moderate' pension income, report suggests

A newly-published report suggests a moderate lifestyle in retirement costs £32,700 for one person and £45,400 for two.

www.bbc.co.uk

Those figures are crazy and unobtainable for many.

Mrs Moon & I aren't near that amount but we live a very pleasant lifestyle including at least a couple of weeks abroad each year, run a car while not brand new isn't exactly old either, go out to eat/have a drink when we want etc.

 

[CWAC blue]

I am lucky enough to have a SIPP and a company pension that I contribute to and my employer pays in to.
I am about 2 and a half years away from my planned retirement date. I could take my tax free 25 percent from my SIPP which should last me for that couple of years. That would mean I could pay 100 percent of my wage into my company pension and gain the tax benefits of increasing my wage value by 25 / 40 percent. This would mean I get an inflated 25 percent from the second pension when I retire. Has anyone else used this approach in pension planning ?

A colleague looked at doing similar but was refused as they wouldn’t allow his take home pay to drop below NMW rate.

 

[CWAC blue]

Those figures are crazy and unobtainable for many.

Mrs Moon & I aren't near that amount but we live a very pleasant lifestyle including at least a couple of weeks abroad each year, run a car while not brand new isn't exactly old either, go out to eat/have a drink when we want etc.

We do everything we want have 2 cars, caravan and a motorcycle on less than that. £2200 a month does us fine, with an additional £1500 taken out at Christmas.

 

[chris85mcfc]

Those figures are crazy and unobtainable for many.

Mrs Moon & I aren't near that amount but we live a very pleasant lifestyle including at least a couple of weeks abroad each year, run a car while not brand new isn't exactly old either, go out to eat/have a drink when we want etc.

Surely its just the same as pre-retirement, where you have to save your tokens up for a holiday, and you cant just go for a lavish meal every single weekend

I'm not sure why people think that in retirement you're all of a sudden going to be out on adventures every single day!

After all my expenses, I can get by on about £50 a week for normal living, allowing me to always have money to go on holiday or out for meals as and when they arise; I cant imagine that changing much when I'm retired!

 

[blue b4 the moon]

We do everything we want have 2 cars, caravan and a motorcycle on less than that. £2200 a month does us fine, with an additional £1500 taken out at Christmas.

Yeah that's near enough what we get, I'm 63 now in a few years I'll be quids in when the OAP hits.