Pension/Investment Contributions

[marzman]

Hi guys,

 

Very off topic, i know, but i'm interested to know how much people are saving for their pensions / investments for later in life, e.g. how much are you putting away each month, or what final pension pot size are you aiming for...?

 

I genuinely haven't got a clue on how much is 'normal' to be putting away, although i guess that's irrelevant as everybody's circumstances will be different.  I'm aiming for early retirement (57 at the latest) but I've neglected my pension until recently, only contributing minimally.  I'm now 37 - so i'm aware I'll need to 'kick the arse out of it' from now on... but I'd still like to understand what normal is!

 

For reference, i've found the below quote on The Telegraph website.  

 

According to the Pensions and Lifetime Savings Association, a single pensioner would need a pension income of £10,200 to live a “minimum level” lifestyle in retirement, which is already slightly more than the current maximum new State Pension of just over £9,100 a year.

 

Profile Pensions estimates that a single pensioner could live comfortably on £17,818 a year, which would require a pension pot of £237,000 at retirement. If you’re in a couple or don’t own your own home, you will need to aim for a higher income and pension pot.

 

The average UK pension pot after a lifetime of saving stands at £61,897. With current annuity rates, this would buy you an income of only around £3,000 extra per year from 67, which added to the maximum State Pension, makes just over £12,000 a year, just enough for a basic retirement lifestyle.

 

Cheers.

 

 

[Stutopia]

I too am late to this party. My plan is I’m gonna buy a cool ICE car and then sell it to a hipster post 2030 for 10 times its value when electric cars have made everyone fall asleep. It’s basically fool proof. Plan B is to get a second place on the go and clear two mortgages by retirement age and then move to somewhere hot with a weak currency.

[marzman]

14 minutes ago, Stutopia said:

I too am late to this party. My plan is I’m gonna buy a cool ICE car and then sell it to a hipster post 2030 for 10 times its value when electric cars have made everyone fall asleep. It’s basically fool proof. Plan B is to get a second place on the go and clear two mortgages by retirement age and then move to somewhere hot with a weak currency.

 

Good plan... until the government whack a £5k a year road tax on ICE cars, forcing the market to implode. 

 

My mate's got a Ferrari F430 which he refers to as his pension. 

[Stutopia]

As soon as HMRC figure out they’re going to miss out on the £40 billion a year they currently enjoy from dinosaur juice motorists, I’m sure a “charging” tax or other such scheme (including the magical unicorn cars) will be along shortly to fill the hole.

[The G Man]

Once this Covid mess is under control, from a medical point of view, standby for an unmitigated and persistent assault on any and all pension pots from the westminster government.  Just like they did after the financial crash, only two, three, umpteen times worse.

 

Best hide yer dosh under the mattress..............

[marzman]

19 hours ago, The G Man said:

Once this Covid mess is under control, from a medical point of view, standby for an unmitigated and persistent assault on any and all pension pots from the westminster government.  Just like they did after the financial crash, only two, three, umpteen times worse.

 

Best hide yer dosh under the mattress..............

 

What sort of stuff could they do, or did they do previously?  I assume removing the tax relief on contributions to some degree, but can they do anything to actually invested cash?

 

I hate the concept of a pension anyway and would rather invest in the markets so that i'm not locked in till i'm 57... especially if there are other pitfalls im not aware of.  

[The G Man]

Well, the financial crash, which cost @ 1/4 of what Covid so far has cost.  For the little misadventure of a global financial crisis, women of a certain age lost 7 years of state pension and their male counterparts lost a minimum 2 years, in today’s terms that was @ £72,000 pounds in saved (which were paid for) state pension income for a couple who had full NI contributions.

 

That was before they started dismantling the final salary pension schemes that were once a fantastic work benefit, through tax changes, national insurance changes and a multiple of stealth tax on investments on a level pertinent to probably people like most on here.

 

Pension pots are already being raided with tax cuts to lifetime pot accumulation.  There’ll be more legislation, on a quite aggressive scale, to further claim from the big pension funds.

 

Im no expert but at 37, if I were you, I would be heavily investing in a pension if you’ve not done so yet.  There is a lot of good organisations out there that will help.

 

Even my cast iron final salary pension has moved position in the last few years due to government raids (I’m talking two years ago) to push what I was due at 60, to 62.  All this in the last 10 years, the next 4 years will see a massive influx of legislation not for an imminent pensioners benefit.

 

All this and we’re only 6weeks into brexshit, in another 6 weeks we’ll be under new pressure from that jobby sandwich.

 

i think the markets, if you know how to work in/with them, is the way to go now.

[marzman]

Cheers, thats good insight.  I didnt really consider them moving the age brackets as raiding pensions, but i guess it is exactly that.

[HEADPHONES]

I'm no expert.

I was in an NHS final salary pension.

Over the past few years I saw my monthly contribution increased FOUR fold and the retirement age increased a few years.

With another 15 years before they want me to retire I eventually opted out as they keep moving the goal posts I don't trust them anymore.

Invested in a couple of properties instead.

Then to top it off there's these rumours of a WEALTH TAX where they look at all your assets, house, car, savings and pension pot etc and if it reaches £500k they want 5%

 

 

 

 

[Mikey_S]

This reminds me that I need to look into consolidating all my small pots from various jobs I've worked before. Have a few public sector pension pots, each with a few years contribution and a few private pots but recently as my employer has been quite generous with pay rises recently I've whacked up the % I pay coupled with a salary sacrifice scheme to try and give me the best possible chance at an earlier retirement 

[marzman]

1 hour ago, HEADPHONES said:

I'm no expert.

I was in an NHS final salary pension.

Over the past few years I saw my monthly contribution increased FOUR fold and the retirement age increased a few years.

With another 15 years before they want me to retire I eventually opted out as they keep moving the goal posts I don't trust them anymore.

Invested in a couple of properties instead.

Then to top it off there's these rumours of a WEALTH TAX where they look at all your assets, house, car, savings and pension pot etc and if it reaches £500k they want 5%

 

 

 

 

 

Bastards!!  

 

[Ekona]

Labour die-hards would love nothing better than a good wealth tax, what a lovely way to get some easy money from anyone who’s dared to work hard in their life. Thankfully Starmer seems too sensible to go down that route right now. 
 

Ive got a banging pension with the prison service, 5% from me and 25% from them, can’t complain at that at all. Also got a private one from previous work but that’s just a tiddler really. Tbh I’m expecting to die in service so it’s all irrelevant

[Stutopia]

5 hours ago, Ekona said:

Labour die-hards would love nothing better than a good wealth tax, what a lovely way to get some easy money from anyone who’s dared to work hard in their life. Thankfully Starmer seems too sensible to go down that route right now. 
 

Ive got a banging pension with the prison service, 5% from me and 25% from them, can’t complain at that at all. Also got a private one from previous work but that’s just a tiddler really. Tbh I’m expecting to die in service so it’s all irrelevant

As a Labour die hard, I’d like nothing more than a wealth tax. Not for people who’ve worked hard all their life but for people who’ve done nothing all their life and inherited a fortune, and for organisations that use IP to siphon funds to the tax havens the Tories & HMRC facilitate.

[Ekona]

Half a million is easy to pass though if you’re including property, that’s my issue. Make it £5M+ and I’d consider it vaguely sensible. 
 

That being said, if it’s been earned legitimately (ie not via crime) then tax has been paid at source, so why should it have to be paid again? We already have inheritance tax which is bad enough, this would be an absolute urine-stealer. Let’s say I work hard and make a company that employs thousands, creates huge amounts of wealth for the country, and am able to set my kids up for life, why should I be punished? If people are following the rules on tax and avoiding it legally, then change the rules on tax in the first place. Don’t move the goalposts because the state is too inept to create something that’s not possible to bend. 

[The G Man]

1 hour ago, Ekona said:

Half a million is easy to pass though if you’re including property, that’s my issue. Make it £5M+ and I’d consider it vaguely sensible. 
 

That being said, if it’s been earned legitimately (ie not via crime) then tax has been paid at source, so why should it have to be paid again? We already have inheritance tax which is bad enough, this would be an absolute urine-stealer. Let’s say I work hard and make a company that employs thousands, creates huge amounts of wealth for the country, and am able to set my kids up for life, why should I be punished? If people are following the rules on tax and avoiding it legally, then change the rules on tax in the first place. Don’t move the goalposts because the state is too inept to create something that’s not possible to bend. 

What, like Amazon, Google, Facebook .  

[Ekona]

Someone started those, from absolutely nothing. So yes, it still applies. And yes, if the state doesn’t like them circumventing perfectly legally the tax laws at source then change the tax laws. 

[The G Man]

8 hours ago, Ekona said:

Ive got a banging pension with the prison service, 5% from me and 25% from them, can’t complain at that at all. Also got a private one from previous work but that’s just a tiddler really. Tbh I’m expecting to die in service so it’s all irrelevant

 

You're just in the job, that’ll be worth next to nothing just now.  5% from you? Used to be zero %, non contributory, except widows and orphans fund (2.5%).  2 for 1’s in some cases.

 

Good luck I hope you don’t die IN service or in service, hope you have a long retirement 

[The G Man]

5 minutes ago, Ekona said:

Someone started those, from absolutely nothing. So yes, it still applies. And yes, if the state doesn’t like them circumventing perfectly legally the tax laws at source then change the tax laws. 

 

Exactly!  Change the tax laws, tax the rich and powerful more, thankyou for confirming that point 

[Ekona]

Tax them at the point of use, not at the point many years later. That’s my point. 

[The G Man]

1 minute ago, Ekona said:

Tax them at the point of use, not at the point many years later. That’s my point. 

 

Tax them in ALL the countries they operate in, on the revenue they accumulate in that country, not som tax haven, convenient minimal tax regime.  Tax them now and make it retrospective.

[Ekona]

Retrospective is a very dangerous tool, and it should never be used unless we’re talking war crimes tbh. And they *should* be taxed per country, not in every country else you’re looking at ridiculous levels of tax which simply isn’t fair. Let’s not forget that these megacorps produce huge amounts of revenue in this and every country, tax them so hard they leave and you’re left with nothing. No one wants that. 
 

However, let’s not forget we weren’t talking about Facebook et al, we were talking on a personal level of the individual. £500k is nothing, not when you consider the average house value these days. 

[The G Man]

You missed taxing them in every country appropriately to the revenue they accrue.  Of course it needs to be retrospective, then the tax that should’ve been paid, would still be in the pots of millions of pensioners pensions, not in the Cayman islands or similar.

 

But then we come right back to the myth of brexshit, when the truth is, billionaires don’t like to be taxed fairly, not at any cost and certainly not to help a country or individuals to have a comfortable future.

 

If you’re happy at that, then I suppose you are happy to die ‘in service’, when you may well be 75 patrolling some landing full of criminals and thugs (think about that for a second) with no hope of retiring, despite the ‘5% - 25%’ input to your pension 

[swillo]

On 23/02/2021 at 22:51, marzman said:

Hi guys,

 

Very off topic, i know, but i'm interested to know how much people are saving for their pensions / investments for later in life, e.g. how much are you putting away each month, or what final pension pot size are you aiming for...?

 

I genuinely haven't got a clue on how much is 'normal' to be putting away, although i guess that's irrelevant as everybody's circumstances will be different.  I'm aiming for early retirement (57 at the latest) but I've neglected my pension until recently, only contributing minimally.  I'm now 37 - so i'm aware I'll need to 'kick the arse out of it' from now on... but I'd still like to understand what normal is!

 

For reference, i've found the below quote on The Telegraph website.  

 

According to the Pensions and Lifetime Savings Association, a single pensioner would need a pension income of £10,200 to live a “minimum level” lifestyle in retirement, which is already slightly more than the current maximum new State Pension of just over £9,100 a year.

 

Profile Pensions estimates that a single pensioner could live comfortably on £17,818 a year, which would require a pension pot of £237,000 at retirement. If you’re in a couple or don’t own your own home, you will need to aim for a higher income and pension pot.

 

The average UK pension pot after a lifetime of saving stands at £61,897. With current annuity rates, this would buy you an income of only around £3,000 extra per year from 67, which added to the maximum State Pension, makes just over £12,000 a year, just enough for a basic retirement lifestyle.

 

Cheers.

 

 

I read this on moneysupermarket a while ago which I found quite interesting.

 

'Take the age you start your pension and halve it. Then put this % of your pre-tax salary into your pension each year until you retire.'

 

Half your age you started the pension can seem quite high but once youve included your employers contribution its a bit more manageable. Obviously just a rough guide but gives you some sort of idea

[Stutopia]

1 hour ago, Ekona said:

Retrospective is a very dangerous tool, and it should never be used unless we’re talking war crimes tbh. And they *should* be taxed per country, not in every country else you’re looking at ridiculous levels of tax which simply isn’t fair. Let’s not forget that these megacorps produce huge amounts of revenue in this and every country, tax them so hard they leave and you’re left with nothing. No one wants that. 
 

However, let’s not forget we weren’t talking about Facebook et al, we were talking on a personal level of the individual. £500k is nothing, not when you consider the average house value these days. 

I think this idea that we should be scared that big companies will run off if we tax them hard is fantasy. It sounds reasonable for a person, but, it’s deeply flawed for a business. As we’ve seen from the botched Facebook tantrum in Australia, they might have a strop, but so long as they can still be profitable they’ll never leave - certainly not the wealthiest countries. It’s terrible business to walk away from profit because you’ve got hurt feelings.
 

We allow them access to the market, in return for our benefit, they don’t allow us access to their products for anything other than profit. 
 

I’m certainly not for retrospective penalties but they’re not required, legislation could shut down moving money off shore in a heartbeat, but then that’s not why they pay their “donations”.

[Ponsonby]

Going back to the original post, I decided at age 17 to start paying into a pension. I worked for British Coal where many people were taking early retirement and decided that I wanted to be in a similar position so set a retirement age of 55. I have always aimed to be paying around 10% of salary into a pension scheme, so I always topped up my employer contributions to 10%. 

I also wanted to be mortgage free by the time I retired. I have always bought houses that need a little work that I can add value to and continually upgraded. First house was bought in my late teens, worked double shifts 'at pit' whenever there was a colliery emergency to save up for the deposit. I have never earned a huge wage so the above is achievable for a lot of people if they put their minds to it.

Must admit that the idea of a wealth tax makes me feel sick. Most of what I have has been achieved by sheer hard graft and has been achieved on a modest wage. My pension pot and house alone will be worth close to £1M, money used to buy the house has already been taxed, money in pension will be taxed when I start taking it. At 5% they would want £50K from me, for being sensible and ensuring that I am not a financial burden on society when I am old.