Do you have a pension?

CelticRambler · 07-08-2015 12:52PM

kazamo wrote: »

Got my pension statements today in the post which thankfully only shows the value of the fund and not statement of reasonable projection when I retire and what it will buy.
That comes in February each year and is a thoroughly depressing document.

Same here. I set up and contributed to a private pension fund when I had stable employment in my 20s, and being in the UK with no intention of staying there, "contracted out" of the state pension to ensure the biggest private pot.

Initially the projected figures looked great; then the future growth assumptions were revised downwards; then I changed to self-employment and had a different perspective on life. A few years later, I'd abandonned my contributions to the pension scheme and invested my disposable income in a way that will provide the things I really need, not the money to pay for them - shelter, food, heat.

I still get my yearly statements and although depressing in themselves, they remind me that I was right to look for a different kind of security (which, as it happens, also yields a dividend every year while I'm thinking about retirement.

ytpe2r5bxkn0c1 · 07-08-2015 12:59PM

Streetwalker wrote: »

No thanks couldn't afford one. Every cent I have goes towards keeping the roof over my families head. I'll worry about pensions in my 50's

Starting to build a pension fund in your 50s is, quite frankly, almost pointless.

old_aussie · 07-08-2015 01:07PM

biko wrote: »

Live fast and die young-ish. That's how all the cool kids go.

Damn, I missed out on that one.

Francie Barrett · 07-08-2015 01:10PM

The whole problem with pensions is that they can just arbitrarily change the rules and leave you high and dry. I had a plan to retire at about 60, live off savings until 66 and then retire on a combination my state and private pension. When the economy went bang in 2007, my pension took a massive hit, then the government dipped their hands into my private pension and now I find the bar has been raised to 68 (I was born only shortly after the cut off point of 1961). I am just waiting for the next levy or raising of the retirement bar, not a thing I can do about it but just keep working. My original plan is in tatters anyway.

rogue_spender · 07-08-2015 01:51PM

VinLieger wrote: »

The people relying on the state one simply don't understand how the system works.

They are under the misguided impression that the money they are paying in now will be what funds their pensions when they retire while in reality the money paying in now is funding the person who retires tomorrow and when the people in their 30's and 40's retire there will be twice as many pensioners and the system simply won't be able to afford to pay them all at the current rate.

Basically private pensions are the only solution and if your too stupid or lazy to set it up then don't go crying when you go to retire in 20 years and the state pension isn't enough to live off

huge amount of ignorance when it comes to the state pension

makes me laugh when I hear people say those currently receiving the state pension , more than deserve what they get

only one in four current recipient made enough contributions to cover what they are drawing down , its those of us in our thirties etc who are paying for todays pensioners

animaal · 07-08-2015 02:05PM

Yeah, the picture's not pretty. Ultimately, future workers won't numerous enough to support future pensioners. This being a civilised state, nobody will be left destitute, but somebody has to pay. I think the governments between now and then will do what's easiest for themselves:

1. Mandatory contributions from everybody. I agree with this one actually.

2. Now that there's no escape, there's no need to incentivise. reduce/remove tax relief for contributions.

3. There still won't be enough to fund future pensions, so abolish the state contributory pension. Leave the non-contributory pension in place. Basically, if you have very little, you'll be brought up to the level of a state pension. If you've saved enough to provide that for yourself, you're one of the "wealthy" who don't need it. Bit of a bummer, considering it takes a pot of over €300k to replace the state pension for a single person.

4. Keep increasing state pension age.

Basically, look forward to many people retiring later in life, and being on pretty much the same (less generous than today) pension, regardless of how much they're saved/contributed over their lives.

ancapailldorcha · 07-08-2015 02:07PM

I don't know if I'll be in the UK this time in 6 months as I've chosen a very insecure career path. I pay into one for work but I don't know if they add to it. I'd hate to have to track down a dozen different pensions in 50 years in different countries.

rogue_spender · 07-08-2015 02:13PM

animaal wrote: »

Yeah, the picture's not pretty. Ultimately, future workers won't numerous enough to support future pensioners. This being a civilised state, nobody will be left destitute, but somebody has to pay. I think the governments between now and then will do what's easiest for themselves:

1. Mandatory contributions from everybody. I agree with this one actually.

2. Now that there's no escape, there's no need to incentivise. reduce/remove tax relief for contributions.

3. There still won't be enough to fund future pensions, so abolish the state contributory pension. Leave the non-contributory pension in place. Basically, if you have very little, you'll be brought up to the level of a state pension. If you've saved enough to provide that for yourself, you're one of the "wealthy" who don't need it. Bit of a bummer, considering it takes a pot of over €300k to replace the state pension for a single person.

4. Keep increasing state pension age.

Basically, look forward to many people retiring later in life, and being on pretty much the same (less generous than today) pension, regardless of how much they're saved/contributed over their lives.

in forty years time , the state pension will ( relatively speaking ) be a fraction of what it is today , todays pensioners are spoiled beyond belief

Menas · 07-08-2015 02:17PM

rogue_spender wrote: »

in forty years time , the state pension will ( relatively speaking ) be a fraction of what it is today , todays pensioners are spoiled beyond belief

I wonder though.
Just thinking out loud....could the state pension ever be lower than the dole?

Sleepy · 07-08-2015 02:17PM

I haven't got one because I was an idiot in my early twenties and I can't afford to start one now. The current priorities are to get out of debt and save a deposit for a house.

Like most in their 30's I reckon I'll be working til 70 anyway. Previous generations have screwed us.

CelticRambler · 07-08-2015 02:18PM

animaal wrote: »

I think the governments between now and then will do what's easiest for themselves:

1. Mandatory contributions from everybody. I agree with this one actually.

2. Now that there's no escape, there's no need to incentivise. reduce/remove tax relief for contributions.

3. There still won't be enough to fund future pensions, so abolish the state contributory pension. Leave the non-contributory pension in place. Basically, if you have very little, you'll be brought up to the level of a state pension. If you've saved enough to provide that for yourself, you're one of the "wealthy" who don't need it. Bit of a bummer, considering it takes a pot of over €300k to replace the state pension for a single person.

4. Keep increasing state pension age.

Basically, look forward to many people retiring later in life, and being on pretty much the same (less generous than today) pension, regardless of how much they're saved/contributed over their lives.

You don't have to look to the future for an example of that - that's how it is (and has been for a couple of decades) in France.

And whadyaknow, it doesn't work. The mixture of public and privately-managed compulsory pension schemes are forecast to be completely dried up by 2018-2023. :eek: That's only two and a bit years away, and that's with them paying a monthly basic pension of only a third of what ye get in Ireland.

Back in the 90s, I chose to opt out of the public pension because I didn't trust politicians to manage the system; in the 00s I thought of returning to Ireland, figured out that I'd be in the exact situation foreseen by suicide_circus, still chipping into the communal pot at 75 without being able to draw anything out.

So I took very early retirement and started growing trees instead. :cool:

kazamo · 07-08-2015 02:21PM

CelticRambler wrote: »

So I took very early retirement and started growing trees instead. :cool:

Money Trees ?

draiochtanois · 07-08-2015 02:22PM

This post has been deleted.

GreeBo · 07-08-2015 02:22PM

kazamo wrote: »

Ah, you don't know what the future holds anymore than the rest of us.

Perhaps by the time you retire the old age contributory pension will have become a means tested payment and then the private pension may help reduce\eliminate the amount you get for the old age pension.
And if you need a nursing home, your pension will come into the reckoning again.

I agree that pensions are a good idea in principle, just don't see them as the holy grail as they are very expensive compared to the annuity you get.

The main thing going for pensions is tax relief.

Which is why you should not rely on the state pension!
Also I think tax free investment if a pretty good only thing to have going. Your private fund has to do pretty Falk well to even catch up with the tax free portion of your pension investment.

nelly17 wrote: »

My big fear is that by the time reitirement comes we will have hit rock bottom again and the government will have introduced legislation that says if you have a private pension you are not entitled to the state pension, a lifetime of work and taxes down the drain

Which still means it's better to have a private pension, which do you think will be worth more to you?

Francie Barrett wrote: »

The whole problem with pensions is that they can just arbitrarily change the rules and leave you high and dry. I had a plan to retire at about 60, live off savings until 66 and then retire on a combination my state and private pension. When the economy went bang in 2007, my pension took a massive hit, then the government dipped their hands into my private pension and now I find the bar has been raised to 68 (I was born only shortly after the cut off point of 1961). I am just waiting for the next levy or raising of the retirement bar, not a thing I can do about it but just keep working. My original plan is in tatters anyway.

That's just the state pension, your private one is yours for when you choose to retire.

Relying on solely the state to look after you if madness imo.

07-08-2015 02:24PM

Saying the state pension isn't small if you've bought and paid off a house - still tight. And if you haven't and are renting then yeah, it is very small

OU812 · 07-08-2015 02:24PM

I'm really surprised that the government hasn't introduced a scheme whereby you can contribute to your state pension - i.e. there'll be a minimum available, but you can add to it & track it & thereby benefitting everyone (more money going in = more to invest)

GreeBo · 07-08-2015 02:28PM

daheff wrote: »

i think the reasons a lot of people dont have a pension are:

1-dont have the money (disposable income) to do so

Its all well and good to want to have a pension, but with a lot of people just barely getting by these days, a pension is seen as a luxury rather than a necessity. the crash has made a lot of people have to stop contributing to pension and prevented a lot of people starting one.

?

If you can't afford a pension now when you are working, hour do you expect to afford to live when you retire?

ancapailldorcha wrote: »

I don't know if I'll be in the UK this time in 6 months as I've chosen a very insecure career path. I pay into one for work but I don't know if they add to it. I'd hate to have to track down a dozen different pensions in 50 years in different countries.

You can just merge them, I've merged 2 previous into my current one. Ring them up and give them the details of where you want it transferred to.

Sleepy wrote: »

I haven't got one because I was an idiot in my early twenties and I can't afford to start one now. The current priorities are to get out of debt and save a deposit for a house.

Like most in their 30's I reckon I'll be working til 70 anyway. Previous generations have screwed us.

And when you retire at 70, then what do you over off?
Bring an idiot when young doesn't mean you can't start being sensible now.

I'm in my 30s and certainly won't be working in my 70s, I may have to wait until then for my state pension but I'll be living off my private one long before then!

CelticRambler · 07-08-2015 02:31PM

OU812 wrote: »

I'm really surprised that the government hasn't introduced a scheme whereby you can contribute to your state pension - i.e. there'll be a minimum available, but you can add to it & track it & thereby benefitting everyone (more money going in = more to invest)

... and more for them to pillage when the circumstances dictate. I think I'd rather trust a fat-cat investment banker! :pac:

kazamo wrote: »

Money Trees ?

In a way, yes. Based on their current value, they'll be worth about four times what I put into my pension, with an annual payout of around thirty times the pension (give or take). Other similar, tax-friendly, investments help hedge against any natural disasters that'd mess up the plan.

ancapailldorcha · 07-08-2015 04:45PM

GreeBo wrote: »

You can just merge them, I've merged 2 previous into my current one. Ring them up and give them the details of where you want it transferred to.

I'll leave this 'til I leave but thanks for the advice. It turns out it's a pretty decent plan (from what little I know).

Sleepy · 07-08-2015 04:53PM

GreeBo wrote: »

And when you retire at 70, then what do you over off?
Bring an idiot when young doesn't mean you can't start being sensible now.

I'm in my 30s and certainly won't be working in my 70s, I may have to wait until then for my state pension but I'll be living off my private one long before then!

By the time I retire, it'll be extremely unlikely that my parents will still be around. Basically, my inheritance is likely to be my pension.

valoren · 07-08-2015 05:08PM

We badly need an equivalent of the UK's ISA's in this country particularly the Stocks and Shares ones. Self directed, tax efficient private pensions. As much or as little as you want with flexible withdrawal options.

I think a lot of people fear the stock market for all the wrong reasons. It's like when Eircom floated and people intially made some money then didn't have the plan in place for a slide in value. Many got burned badly and thus the consensus was that the Stock Market is a dangerous thing. BS.

You can see the same thing happening again now. Markets are currently in a Bullmarket and many funds are reporting impressive returns. They are advertising strongly and will draw in the retail investors. The one's who are wary of stocks. They will be lured in by the returns and will fully expect the same again. They however have gotten in at the tail end of the bull and when a market get's overvalued it will correct itself naturally. The market value will fall. The late adopters get burned in the correction and swear that it's all a swindle and vow to never to invest in Stock and Shares again. The media will deem it a market crash! Bloodshed! Black Friday! etc etc

The savvy however will see it as a stock market sale and will BUY BUY BUY. You never see the headlines saying "Markets drop 15% in one day! Stocks on Sale!"

The market however has fallen but ALWAYS recovers. Good companies are still good companies. And when the funds start to advertise aggressively again, Johnny retail goes back in for another go. Wash, rinse, repeat.

ytpe2r5bxkn0c1 · 07-08-2015 05:35PM

Sleepy wrote: »

By the time I retire, it'll be extremely unlikely that my parents will still be around. Basically, my inheritance is likely to be my pension.

Must be some estate. It will take a fund of approx 100000 for each annual income of 6000 in retirement.

Or about 500000 to draw down 30000pa for 15 years.

An inheritance is not tax efficient and gives no benefit from employer contributions. You pay inheritance tax over 250000 at 30%.

My pension gave me a tax free lump sum of over 150000 and annual payment over 40000 by making manageable contributions since I was 20.

Subcomandante Marcos · 07-08-2015 05:39PM

My pension pot, if I carry on earning as I do, will hopefully be in and about 2million by the time I'm 60 which would allow me 20 years of 100k per living with zero debt.

Only problem is I want to retire at 50 which would mean I'd be down to 66k per year (for 30 years).

Ho hum.

Bubbaclaus · 07-08-2015 06:05PM

One More Toy wrote: »

Was sitting around at work talking about it, I was the only one of my colleagues to have one set up, and contributing the maximum, why is there such disregard in the Irish population towards private pensions? The state one wont provide the greatest of living standards yet people put it off, even into their forties:eek:

I'd prefer to invest my own money for the future, and have access to it if needed, rather than giving it away for a few decades.

Tax relief is a myth too, you're not getting tax relief...you're just postponing when you'll pay tax until later.

ytpe2r5bxkn0c1 · 07-08-2015 06:49PM

Bubbaclaus wrote: »

I'd prefer to invest my own money for the future, and have access to it if needed, rather than giving it away for a few decades.

Tax relief is a myth too, you're not getting tax relief...you're just postponing when you'll pay tax until later.

Not true. Tax relief is real, as a substantial lump sum is available tax free and the usual tax credits apply to the annuity.

hmmm · 07-08-2015 07:00PM

Francie Barrett wrote: »

The whole problem with pensions is that they can just arbitrarily change the rules and leave you high and dry.

Yep, I think the government have tinkered with pension rules in almost every budget - they really haven't a clue. Joan Burton is talking about trying to encourage people to take out pensions, while the Finance Ministers are putting levies on private pensions at the same time, it's clueless stuff.

Most of the problem is that politicians have no clue how a private pension works, and can't understand why their continuous tinkering with the rules puts people off investing in something they can't touch for 30 years. The pension levy was a disaster, and is going to cause us problems for decades to come because people will assume the government could dip into their pensions in the future.

Streetwalker · 07-08-2015 07:51PM

Ronnie Worried Workaholic wrote: »

Starting to build a pension fund in your 50s is, quite frankly, almost pointless.

Nothing I can do im afraid. I'll be depending on the state pension mostly and im happy with that once my kids get a decent education.

diomed · 07-08-2015 08:28PM

Galwayguy35 wrote: »

Jeez I though I was great starting one last year at 39, but it seems the 21 year olds today are smarter today than I was at that age starting their pension early.
Still better late than never.

I really started saving into my pension at 41. I took early retirement at 56. I am 65.
An earlier employment gave me a transfer of 2.3 years contributions for 7.5 years work. I guess the pension admin took about 5 years money as a fee.

From age 41 I was contributing 6%, the employer 9%.
A work colleague told me I should be buying back years i.e. buying extra years, so I signed up to buy 10 years, and that increased my percent to about 12% of salary.
Shortly after that I increased it to 20% of salary (employer still 9%) with additional voluntary contributions. Tax breaks back then made it a cheap saving.
I was lucky. When I retired the pension fund bought an annuity for me. Two years after I retired the company folded and the pensions for those still working were almost totally unfunded.

kazamo · 07-08-2015 09:59PM

diomed wrote: »

I really started saving into my pension at 41. I took early retirement at 56. I am 65.
An earlier employment gave me a transfer of 2.3 years contributions for 7.5 years work. I guess the pension admin took about 5 years money as a fee.

From age 41 I was contributing 6%, the employer 9%.
A work colleague told me I should be buying back years i.e. buying extra years, so I signed up to buy 10 years, and that increased my percent to about 12% of salary.
Shortly after that I increased it to 20% of salary (employer still 9%) with additional voluntary contributions. Tax breaks back then made it a cheap saving.
I was lucky. When I retired the pension fund bought an annuity for me. Two years after I retired the company folded and the pensions for those still working were almost totally unfunded.

DB scheme ?

diomed · 07-08-2015 10:21PM

kazamo wrote: »

DB scheme ?

Yes, defined benefit.

Do you have a pension?

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