About aging - savings & pensions

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About aging - savings & pensions
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Treacodactyl
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Joined: 28 Oct 2004
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Posted: Fri Sep 30, 05 9:41 pm Post subject:

RoryD wrote:

Nope I think I'm with you Nanny. Bizarrely, my generation (35) is is old enough to have afforded a house deposit (mostly) but will probably get stuffed in the pensions thing too.

If people put the same amount they spend on shopping for non-essentials into a pension plan, and ensure they look at what they are investing in, then many wouldn't be. It's either that, the government forcing people to invest regardless of what some may have already done, or put the retirement age upto a few years before you die.

jema
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Posted: Fri Sep 30, 05 9:54 pm Post subject:

Treacodactyl wrote:

RoryD wrote:

Nope I think I'm with you Nanny. Bizarrely, my generation (35) is is old enough to have afforded a house deposit (mostly) but will probably get stuffed in the pensions thing too.

The vast majority of people do not have the sort of real disposable income you need in order to be able to make real financial decisions. In fact given the way benefits work, they would be total fools to put money into pension schemes.

Treacodactyl
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Posted: Sat Oct 01, 05 6:28 am Post subject:

jema wrote:

I think that shows a large part of the problem. Saving for your retirement is essential and should not be left as an afterthought when you have disposable income.

There are certainly cases where people are best not investing in a pension as this will reduce their benefits, but you don't have to save only in a pension. Relying on benefits & state pensions is extremely risky, retirement ages are being pushed back and someone in their 30's will probably not get a state pension until they are in their 70s they way things are going.

jema
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Posted: Sat Oct 01, 05 6:51 am Post subject:

I'd say that for most people a pension investment is a disasterous way to save, and if they have disposable income, then property or frankly hiding money under a mattress makes far more sense.

Paying money into a pension only works if you can pay enough in so that the money the state would not pay you in benefits is not that significant.

But for most people this will not be the case.

You can alway point to people with a new car and taking expensive foreign holidays as examples of people who should have different priorities.

But most people are not like this. They have income to live on and pay for a few luxeries, but do not have an income that is disposable in the sense that they really decide how to "dispose" of it.

Treacodactyl
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Posted: Sat Oct 01, 05 7:39 am Post subject:

Saving in a pension is only one way of saving for your retirement. Although I get strange looks when I say this I'd suggest buying a small piece of local woodland if you can as one method.

Many people do save for their retirement, people who are worse off than other who don't save. It's a choice but one that should be taken into account when deciding state benefits IMHO.

At the moment there is a reasonable chance that the choice of how you save for your retirement will be taken out our hands and everyone will be compelled to save in a pension. Unfortunately this may have a harmful effect on those who are saving but that's life.

jema
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Posted: Sat Oct 01, 05 7:47 am Post subject:

The scandles with pension schemes also are not encouraging for people.

When I was employed, I put vast amounts of disposable income into Ethical Life in the belief fostered by a lot of propaganda that this was the proper thing to do and a safe way to get a pension.

I'm now pretty shafted in that regard

and have switched to trying to pay off the mortgage instead. Maybe I'd still be better off trying to make the best of things and paying into a pension. But once bitten twice shy and all that.

But I like you are in that minority of people who do have enough income to really make choices!

Treacodactyl
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Posted: Sat Oct 01, 05 8:04 am Post subject:
So, if the population stays about the same or decreases who pays for all the retired people?

ele

Joined: 05 Sep 2005
Posts: 814
Location: Derby

Posted: Sat Oct 01, 05 8:11 am Post subject:

jema wrote:

I'm now pretty shafted in that regard

I've been umming and arrring over the pro's and con's of getting a stakeholder pension and although I know a bit about financial planning it's still quite confusing... The Motley Fool site https://www.fool.co.uk/pensions/pensions.htm (scroll down to the more information section below the ads) about pensions is the only one that makes any real sense to me.

For example the bit about the real difference between ISAs and Pensions and how they're taxed and how it may not mean much tax difference to plump for ISAs instead if you're not a big tax earner / or needing to save more than the ISA allowance (though there are a couple of possible disadvantages). Personally I find share based ISAs far less scary than pensions, because I do not trust financial companies. It is far more easy to spread your money around buying ISAs from different providers than with pensions, and so if one becomes useless / corrupt etc then you won't lose so much. Also of course you can get your money out if you need it (both maybe a good and a bad thing) and you're not forced into buying an annuity.

There is then the separate question of, do I really want to have money in shares, cos even the most ethical of funds is a rather pale and murky shade of green.

Cash ISAs at least are a no-brainer, if you've got a little bit of savings they're the best place to put it

Last edited by ele on Sat Oct 01, 05 8:28 am; edited 2 times in total

Treacodactyl
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Posted: Sat Oct 01, 05 8:30 am Post subject:

ele wrote:

For example the bit about the real difference between ISAs and Pensions and how they're taxed and how it may not mean any tax difference if you're not a big tax earner / or needing to save more than the ISA allowance. I find share based ISAs far less scary than pensions, because I do not trust financial companies. It is far more easy to spread your money around buying ISAs from different providers than with pensions, and so if one becomes useless / corrupt etc then you won't lose so much. Also of course you can get your money out if you need it (both maybe a good and a bad thing) and you're not forced into buying an annuity.

There is then the separate question of, do I really want to have money in shares, cos even the most ethical of funds is a rather pale and murky shade of green.

Cash ISAs at least are a no-brainer, if you've got a little bit of savings they're the bast place to put it

You seem to know what you are doing. Retirement saving is not just about putting money into a pension. ISAs are more flexible and pensions make a lot of sense for some, 40% tax payers, people running their own companies and especially if you have access to an employers scheme and they contribute extra money for you.

ISAs are provided by financial companies though, many provide pensions and ISAs, it's really the fund you invest in that matters. Not putting all your eggs in one basket is very wise IMHO. Yes, if you put all your pension savings in one company now you may save the odd 0.5% annual fee but if one was to go under. I have 4 different pensions, ISAs, PEP, house, premium bonds etc. Not necessarily much in each but a good spread.

As for money in shares being ethical. I was mulling that one over last night as most who invested in endowments in the 80s and 90s were happily funding the Tory privatisation! Having looked at some ethical funds the way they decide what to invest in can be rather dodgy IMHO. I tend to think the only one you would be harming would be yourself as so many financial things are interconnected. For example, the value of an ethical company will rise and fall just because oil stocks are doing so.

ele

Joined: 05 Sep 2005
Posts: 814
Location: Derby

Posted: Sat Oct 01, 05 8:42 am Post subject:

Treacodactyl wrote:

As for money in shares being ethical. I was mulling that one over last night as most who invested in endowments in the 80s and 90s were happily funding the Tory privatisation! Having looked at some ethical funds the way they decide what to invest in can be rather dodgy IMHO. I tend to think the only one you would be harming would be yourself as so many financial things are interconnected. For example, the value of an ethical company will rise and fall just because oil stocks are doing so.

So you decided against "ethical" funds?

It is all very murky, and it's a little while since I read about what's going on, I don't think that I could invest in a normal fund because I really wouldn't want shares in companies like Rio Tinto or armaments. I like the fact that some ethical funds do both positive and negative screening and this seems a small step in the right direction. Corporate sustainability reports are at least becoming more common place, mostly just PR of course, but they are a step and I think the ethical funds may drive this a little. It's a small sticking plaster on a great big scar, but it's something.

jema
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Posted: Sat Oct 01, 05 8:44 am Post subject:

Treacodactyl wrote:

So, if the population stays about the same or decreases who pays for all the retired people?

I think there are two points there. This is actually a very rich Country. We have enough money for war in Iraq for example. There should really be no problem whatsoever in supporting a retired population. With the wonders of mass production and the cheap food we all love and adore on this site, it is quite bizzare that supporting an elderly generation should be seen as a problem at all.

The other question is, that given the need for pensions why are people being thrown at the mercy of the market, and schemes that will only pay them enough to let the government off the hook on benefits. People are I hope more and more seeing that this is a con they are better off avoiding.

Treacodactyl
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Posted: Sat Oct 01, 05 9:11 am Post subject:

jema wrote:

Treacodactyl wrote:

So, if the population stays about the same or decreases who pays for all the retired people?

I think all economists on all side of the political spectrum say there will not be enough money to fund the retired population. The basic retirement age is already being raised from 50 to 55. Something I would agree on is that people could manage on far less that the figures I see as a 'minimum' annuity people should aim for.

jema wrote:

The other question is, that given the need for pensions why are people being thrown at the mercy of the market, and schemes that will only pay them enough to let the government off the hook on benefits. People are I hope more and more seeing that this is a con they are better off avoiding.

That's something I agree on. If you are compelled to save then there has to be some government guarantee. I think this is one of the main problems that has prevented compulsion. However, with a little thought people can make reasonable choices, if it sounds too good to be true it probably is. With profits funds have always seem too good to be true even when they were rising 20% a year for several years on the trot. It may take several weekends to look at savings details, but this is a decision that will hopefully effect many years of your retired life.

Perhaps financial planning is something that should be taught in schools?

Treacodactyl
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Posted: Sat Oct 01, 05 9:13 am Post subject:

ele wrote:

So you decided against "ethical" funds?

A little. I can try and dig something up if you wish.

I may also break this thread into two parts if no one objects?

ele

Joined: 05 Sep 2005
Posts: 814
Location: Derby

Posted: Sat Oct 01, 05 9:21 am Post subject:
Oh no that's okay, I was just curious about your decision. Thread does need breaking !

Nanny

Joined: 17 Feb 2005
Posts: 4520
Location: carms in wales

Posted: Sat Oct 01, 05 4:34 pm Post subject: about aging

it's nice to hear i am not the only one who feels aggrieved about the pensions thing

i will admit i do not understand all the in's and out's of all the investment opportunities

any spare monies we have now go into premium bonds as at least we won't lose any of it like some who have invested elsewhere

our public service local gov't pensions have apparently been mostly affected by the bosses "taking a holiday" as regards our payments in the 80's, consequently there ain't now gonna be enough dosh to go round and we have to keep paying in more money for longer

to a certain extent, i suppose it hurts more because in my job we see the police officers of the same age group now all retiring at 50 or 55 with their nice pensions (thank you very much) and we all feel we've been had.

police officers have now been told they must work another 5 years for the full penison rights, however that is for newly recruited police officers. for us it's a blanket "tough luck, don'tmatter how long if you have gone past the cut off point you won't get the money till later," irrespective of the fact that some of us will have worked there over 40 years before we get the dosh. certainly one person i know went there straight from school at 16 . she has already done 20 years and is now faced with a lot more before she can retire with the money.

if i can go more back to the subject of the thread, when you work in our sort of place, the work and the speed of change can be so rapid that you do lose the ability to retain new IT and policies and procedures. what i can see in the future for our operations room is more people going out on medicals when they get to or close to 60. i can only think of maybe 3 people who have ever got a far as 65, one snuffed it 6 weeks later. he was desperate to get to 65 and a fat lot of good it did him in the end.

don't want that for myself, however it suits the pension people if yo snuff it just before or just after your retirement at 65 i suppose.

god this is getting depressing..............

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