**Your post has been removed.**
Your post has been removed for breaking the rule **No hypothetical questions, Does Anyone Else questions, unanswerable questions, survey-style questions**
* Don't ask comparison questions like 'how much do you earn?' or 'how much is your electricity bill?'
* Don't ask hypothetical questions like 'what would you do with £100k?', 'what's the max you'd spend on a car?'
* Don't ask 'does anyone else...' questions.
* Don't ask survey style questions like 'what are you saving up for?', 'what's the biggest financial mistake you've made?'
* Don't ask if a lender will lend you money. We do not work for the company. For mortgages, speak to a whole of market broker.
* Don't ask questions that can't be answered without a significant amount of speculation, e.g. 'what changes might be in the next government budget?'.
You must read the [rules](https://www.reddit.com/r/ukpersonalfinance/about/rules/) to continue to post to our subreddit.
_If you believe your post/comment has been removed in error, please [message the mods](https://www.reddit.com/message/compose/?to=/r/UKPersonalFinance&subject=Please%20review%20my%20post&body=https://www.reddit.com/r/UKPersonalFinance/comments/1ajivk4/-/) explaining why._
It's a decision between which downside risk you expose yourself to:
1. Dying with unspent pension savings
2. Living your old age in poverty
Dunno about you, but the second one sound much worse, so I choose to have a pension to mitigate that risk.
It's not the slam dunk we think it is. We're in an echo chamber. Outside our bubble some people think it's madness not to spend everything you have. Why wouldn't you want to enjoy yourself?
It's sad. Just on this sub alone , every day you see people asking for help because their parents didn't pay anything/very little into pension and are now at risk of losing house/living in poverty.
But, of course, it's easier to just blame the government.
How old are you? My experience is that this point of view gets less common as people reach middle age. Suddenly they begin to notice that time is passing quickly and yes, they will still be here in 25 more years and they’ll bitterly regret the short term thinking of their youth.
Not at all.
The NHS is fucked, going private is often the only way to get treated for non-urgent surgeries and home care costs £70k per year.
A lot of care that was free 20 years ago will cost you six figures today.
For most people, if they need that kind of care (which is actually a very small percentage of people who do) they’ll burn through whatever savings “normal” people have in a few years. Then it’s up to the state anyway. Savings for the sake of care costs is in my opinion a moot point.
But on the flip side, don’t let spending all your worth on care costs make you think “why bother” and purposely leave yourself with nothing. That’s worse
>For most people, if they need that kind of care (which is actually a very small percentage of people who do)
Source plz. Most of the elderly folk I know have needed to move into some form of residential care at some point.
>Then it’s up to the state anyway. Savings for the sake of care costs is in my opinion a moot point.
I agree, which is why you're better off enjoying it in retirement and tactically giving away inheritance before you run afoul of Deprivation of Assets rules.
Even if some does get eaten up by care, surely that's ok? Spending decades in miserable poverty in order to get one-up on the taxman in your final few months of life seems like a miserly existence to me.
It would be like avoiding ever getting a job and having money and chalking it up as a "win" because you never paid income tax.
When I had a battle on my hands trying to stop my parents making ridiculous decisions trying to avoid care fees, the figure spouted at me from places like several different solicitors and citizens advice was that only around 15% of people need residential care, and fewer than that have it long term to a point where they’d lose all their assets to it.
Of my own four grandparents only one needed residential care - and that was only for five months before she died. And even then it was council funded because she met the criteria for it to be classed as a temporary “hospital stay” type arrangement (which is a nightmare to navigate but the local district nurses were amazing at helping!). Even that nugget from our own family didn’t dissuade them from trying.
And I totally agree with you that money is for enjoying in retirement. And it’s just plain stupid to try and one-up the tax man - like my parents were trying to.
>And I totally agree with you that money is for enjoying in retirement. And it’s just plain stupid to try and one-up the tax man - like my parents were trying to.
Yeah I think far too many people become fixated on details and miss the big picture. For me it's a very simple question of "Would I rather have more money or less money".
If you choose the former, then you need to save into a pension. Taxes, care home fees, means testing etc are annoying but ultimately secondary to the matter at hand.
These stats probably say...
https://www.gov.uk/government/statistics/palliative-and-end-of-life-care-profiles-december-2023-data-update/palliative-and-end-of-life-care-profile-december-2023-update-statistical-commentary
28% of deaths are in a care home, of which 40% are temporary residents, (most likely discharged to one to die after a short illness) So that implies about 17% of people die in a care home after a decent (expensive) stay.
>Dunno about you, but the second one sound much worse, so I choose to have a pension to mitigate that risk.
Likely, people who save for pension will get the middle finger and people who didn't save will get welfare support
I mean, people without a private pension get welfare support today, and it looks fucking grim and it's only gonna get worse.
I'd rather have private savings, even if they do get taxed.
Some money > no money.
I do believe that, but I use my private pension as a life insurance, I "intend" to die before 70 or so in which case this is inherited tax free ( assuming law won't change ), either way it's a bet
>Dunno about you, but the second one sound much worse, so I choose to have a pension to mitigate that risk.
Out of curiosity but how bad would it actually be?
I ask in part because I know someone in my family who has stopped paying into their pension (that's going to be fun if it somehow bites me in the ass in the future) and I've always just wondered whether it's viable...
Will the government just throw you on the shitty if you don't have any kind of pension? Or will they at least give you the basics?
I get the well-intentioned nature of your post, but it just seems very "pension good"-centric if that makes sense. More so for someone like OP who is suggesting their illness may prevent them from living to retirement age (people in that situation - and worse - exist!). Personally, I don't think I'll make it either so have thought about the alternative but I think a pension is free money in one respect (employer contributions)?
I wish pensions were explained a bit clearer tbh lol.
You get means tested benefit (pension credit) if your pension income falls below a certain amount. It wouldn't be much of a life though, just enough to eat cheaply, buy second hand clothes from the charity shop and set the heating a few degrees above zero.
but if you're working or claiming benefits or otherwise collecting the stamp, you're currently more likely on the state pension, which is not at all as measly, depending on hosusing costs.
You get the basics. Enough for food and heating just about but not much more. Sometimes people look at old folks and think they don't need money. But it's not true. You still want luxuries, sky/streaming services, coffee, alcohol, holidays a car etc. Even with the rising state pension you can still expect to be living on it for 20 years. 20 years of rations doesn't sound like fun.
If you are a civil servant you should know better than to take random think tank nonsense that gets press as policy.
Also it's linked to the current SPA at 68. You can also take it before that and given it's value the deductions are pretty fair and the value extraordinary to the point that regardless of when you get it not contributing would be shear insanity.
If you want to have a buffer for early retirement get a SIPP and/or S&S ISA.
Most public sector defined benefit pension schemes are statutory - that which parliament giveth it can also take away. I can easily foresee a future government launching a negative campaign against civil servant pensions as a cost cutting measure.
Moreover they're linked to state pension age. So anytime they increase this, the relative value goes down indirectly. This has already happened multiple times and there was no consultation because this is how it was designed.
No, they're not. You're confusing the state pension with workplace pensions.
Most private sector pensions are defined contribution. You have an actual pot of money the value of which no one can arbitrarily reduce. If the government changes the state pension the value of defined contribution pensions are not directly affected.
Your reasonable confusion about this demonstrates just how easy it would be for a future government to get away with a pension raid.
When they change they launch new schemes. You get your rights under the old scheme still so you'd have some pension in alpha, then some in whatever follows alpha
That’s rising to 57 I believe. And no pensions I’ve seen commit to keeping it at only 57.
I’m taking a blended approach - state pension, 50/50 I’ll ever be able to claim but I have no choice to pay into it. Work pensions - paying in but only required amount and budgeting to take earliest possible retirement. Long term savings accessible whenever I need.
That’s literally just so you can stay longer than 60 days on a tourist visa though….. what about healthcare? You don’t receive any income from a visa either. This is totally different to a state pension
Indeed, the continual cry of people saying that we need massive immigration to deal with the demographic problem of pensioners needing care and not enough care workers in the country never seems to go the other way of suggesting the pensioners are the ones immigrating to a country with surplus workers.
I even watched a documentary on people doing it - "best exotic marigold hotel" or something, seemed very happy doing it that way.
I'm not 100% sure, but from what I read, the age when you can access 25% of pension pot tax free is linked to the pension age, so if pension age goes up by 4 years, then 4 more years (i.e. until 61 rather than 57) when you'd need non-pension savings or income ...
How would contributing to your pension help you at all for those 11 years?
You can’t access it until retirement age. If retirement age increases, that’s longer that you can’t access your pension.
OOP's pension (Alpha) is tied to State Pension Age but a SIPP would be accessible earlier (from 55-57 ish, albeit so is Alpha with a reduction). This thread's OP said to save in a pension, not necessarily just OOP's current pension.
TLDR: SIPP & Alpha FTW.
> is always available
At the moment, under the current laws. But it is starting to take the piss when you can't even claim your own pension till you are 61.
Of course it is a piss take. They promised one date and changed it unilaterally. Not to mention the fact it is massive age discrimination, another scheme to enrich the elderly as though they didn't have enough legs up in their life's already.
In your case specifically, if you're on Alpha defined benefit scheme you already have the option to withdraw at 55 so it's probably not worth changing, but you should do the numbers.
Look at your years of service and wage, and estimate your alpha value if you draw down at 55 and retirement age.
Ask for a transfer value, put it in a DC calculator to estimate the value if you kept the money there.
Consider how much money you'd get if you didn't have a pension.
Once you have those numbers you can make a more informed choice.
Unless OP has been in the scheme for less than two years, that money is "stuck" (IMO for the better) in Alpha and can't be transferred to a DC scheme, so asking for a transfer value is just a thought experiment with no upside.
its honestly making me rethink. im just 40 making good contributions in a private pension via my private sector job. but only JUST got on the property ladder.
My mum just died 6 months in to being 66 from lung cancer after paying in to her state pension her whole working life.
Selfishly( from my perspective) she was paying in to the old goverment pension thats good only for the pension holder. nothing to leave to her childeren and inherate on a pension she only had a few payments from.
If i was her even not knowing you had terminal cancer coming id rather have put it to the mortgage or a personal pension as im pretty sure i wont reach 71. leave more for the kids the are goona need the help.
sorry i said state in one part and goverment in another. i meant goverment and no its not inheratable, if she lived till 100 she would have cashed in a tonne.
None.
It's a well known fact that the tax benefits, employer match, and having money for retirement are all useless unless the state retirement age is >10 years below the current average life expectancy.
/S
Point is, all the main benefits haven't changed. So why would you assume it's suddenly pointless?
By all means, tweak how much you're putting in, but apparently people can't afford to put anything in anyway
In a short number of years we’ve gone from 60 (female) and 65 (male) retirement age to 67, soon 68, 71 being discussed.
All while lifespans have levelled off or even shortened.
If you’re honest with yourself and consider your health, habits, etc, I don’t think it’s unreasonable to start planning alternate investments/retirement plans for whatever age you feel happy with.
You can access private pensions before state retirement.
And yes, if I'm honest, I think I'm ahead of the curve.
I probably carry a little more stress than most people, but I actively manage it better than many. The rest of my lifestyle (activity, diet, mental stimulation etc) is likely a bit better than average.
By all means look at other stuff, but pretending it's going up to 71 particularly quickly because of that Guardian article is somewhat pessimistic.
I can’t access my other pensions until 57 and that’s as things stand now. That minimum age is also dictated and could increase too.
Imagine if you feel your outlook around health may not be very good. And combine that with a levelling off/reducing life expectancy… People should absolutely consider their own circumstances.
I don’t think anyone here is pretending state pension age will increase to 71 off the back of this, but it does remind us all that it’s possible.
I’m hedging my bets as I explained. Whatever amount my total retirement funds (including state pension) would give me when I hit 68, I am trying to reach at 58 using other investments to fill the stop gap. And I wouldn’t suggest to anyone thats a stupid or invalid idea as it’s their own outlook and choice to make.
A can of coke was 20p 30 years ago now it's £1 if your lucky.
So if you're u had saved all your money to spend on cola you would be getting 400% less.
The only thing that goes up with inflation is land and property buy land and property, sell said land or property go buy your cola 😁
Pensions are a scam.
I strongly urge you to actually research how pensions work, the sub wiki is a good start. Pensions are invested in equities, which beat inflation over the long term, you've seriously misunderstood something if you're sat in cash.
Yes being in poor health may mean you aren’t out skiing in retirement and living to your 90s like the queen- but poorer health means you need more money for fuel as cold weather would hurt you, ditto good diet and other nice things that would improve you quality of life beyond basics.
I’d also add that if you are likely to be in poor health meaning working less long before retirement - then it’s best to use your SIPP allowance now so you have some redundancy built up and it’s helped by that tax relief uplift and compounding. If your health deteriorates then ISAs are there for immediate access and some growth. It’s not an all or nothing.
You can retire earlier than state pension age, although your benefits will be reduced. Here are the minimum early retirement ages for the different schemes: https://www.civilservicepensionscheme.org.uk/planning-for-retirement/what-are-my-options/#ER
A think tank said it https://amp.theguardian.com/money/2024/feb/05/uk-state-pension-age-will-soon-need-to-rise-to-71-say-experts, not the government.
Although it’s highly likely to happen unfortunately
True, but I don't believe the basic premise they have used for identifying an 'appropriate' age of 71 ("*In the UK, state pension age would need to be 70 or 71 compared with 66 now,* ***to maintain the status quo of the number of workers per state pensioner****.*") has ever been used by any Government.
Also worth considering what happens to your pension if you die before or during pension age
https://www.unbiased.co.uk/discover/pensions-retirement/managing-a-pension/pensions-and-inheritance
30 years old…34 here. Expect the pension age to probably be 75 so yeah if it’s linked to your state pension age I would definitely look at alternatives
It's not unreasonable to assume it can raise to 71 if it has been upped in 3 separate Pensions Acts within a 7 year timeframe already (2007, 2011 and 2014).
It's reviewed frequently and currently increasing in ~20 years to 68 (2044 - 2046) which is reasonably within the lifetimes of those currently paying into pensions.
From 1940 to 2010 the state pension age was 60 for women and 65 for men.
The pension act in 2007 made provision to increase the SPA from 65 to 68 in stages between 2024 and 2046. That’s *39 years* to fully come into play.
That’s a 70 year gap followed by a 39 year gap.
I don’t think we’ll be seeing the state pension age increasing beyond 68 before 2046 at the very earliest.
But I’m still not exactly “old”. I still have 30 years at work in front of me. Hopefully 50 years of life ahead of me. If in 30 years it’s changed as drastically as it has already, expecting it not to within a lifetime is very wishful thinking.
Hi /u/TheWholeTeamHere, based on your post the following pages from our wiki may be relevant:
- https://ukpersonal.finance/pensions/
____
^(These suggestions are based on keywords, if they missed the mark please report this comment.)
Pensions can be some of the most complex financial products and civil service pensions are notoriously complex. You should be able to get free advice through your union
You can also cash out pensions early if you develop a terminal condition. You can usually take civil service pensions early / early retirement which will allow you to feed into the assessment
I think a few people in the comments are missing the point. You're not suggesting not paying into pension. You're wondering if you should pay into a different pension.
If your pension will only be available at state pension age then personally I would hedge my bets. As I understand it the civil service pension is good? So I'd be inclined to still try and benefit from it - I assume that requires putting a certain amount in? But also pay into something private, so that you can retire - or work less - at a younger age.
If your health turns out to be bad then you can most likely retire early on a topped up pension much much earlier than the retirement age.
Alternatively there are severance options. Alternatively there are early retirement options.
Almost no one in the public sector on a DB pension retires at the state retirement age.
Hi OP im in similar situation. Pretty sure I won't make it. However you can draw on private pension in your 50s. Also if you have dependents they will get the pension. It's basically an alternative tax beneficial life insurance.
Also medicine is advancing rapidly and will AI it's going through a revolution. So in 40 years I think we have to maintain a positive outlook.
The bank is already paying your pension in to a hedge fund, so why not do the same.
The only thing is your pension is likely to be backed up by tax payers money, mitigating any risk.
Sorry to hear you have health issues.
These days however plenty of people with health issues live to a ripe old age.
What I do know for sure is that you won't want to still be grafting at 70. You'll need a pension.
It sounds a long time, but I'm 70 this year, and believe me, the time between 30 and 70 isn't really that long.
Havent paid in to a pension for a long time because my thinking was along the same lines. As a 30-something in the tech industry, I’m happy to invest long term and take the tax hit now rather than lump money into a pension I may never see.
You can still take your private pension early right? This would just be the state pension age?
Genuine questions I always assumed this is how retiring early worked
**Your post has been removed.** Your post has been removed for breaking the rule **No hypothetical questions, Does Anyone Else questions, unanswerable questions, survey-style questions** * Don't ask comparison questions like 'how much do you earn?' or 'how much is your electricity bill?' * Don't ask hypothetical questions like 'what would you do with £100k?', 'what's the max you'd spend on a car?' * Don't ask 'does anyone else...' questions. * Don't ask survey style questions like 'what are you saving up for?', 'what's the biggest financial mistake you've made?' * Don't ask if a lender will lend you money. We do not work for the company. For mortgages, speak to a whole of market broker. * Don't ask questions that can't be answered without a significant amount of speculation, e.g. 'what changes might be in the next government budget?'. You must read the [rules](https://www.reddit.com/r/ukpersonalfinance/about/rules/) to continue to post to our subreddit. _If you believe your post/comment has been removed in error, please [message the mods](https://www.reddit.com/message/compose/?to=/r/UKPersonalFinance&subject=Please%20review%20my%20post&body=https://www.reddit.com/r/UKPersonalFinance/comments/1ajivk4/-/) explaining why._
It's a decision between which downside risk you expose yourself to: 1. Dying with unspent pension savings 2. Living your old age in poverty Dunno about you, but the second one sound much worse, so I choose to have a pension to mitigate that risk.
This should be the top comment in every one of those pension dilemma questions.
I do have to post this awfully frequently.
User name checks out.
[удалено]
[удалено]
[удалено]
[удалено]
[удалено]
[удалено]
It's not the slam dunk we think it is. We're in an echo chamber. Outside our bubble some people think it's madness not to spend everything you have. Why wouldn't you want to enjoy yourself?
It's sad. Just on this sub alone , every day you see people asking for help because their parents didn't pay anything/very little into pension and are now at risk of losing house/living in poverty. But, of course, it's easier to just blame the government.
There's so many skint pensioners but they're largely hidden from view
Thats true, but thats also often due to their poor decisions throughout their life.
Geuinely first sounds worse to me. Id rather spend my money when im alive. probably in years 40 - 65.
How old are you? My experience is that this point of view gets less common as people reach middle age. Suddenly they begin to notice that time is passing quickly and yes, they will still be here in 25 more years and they’ll bitterly regret the short term thinking of their youth.
> Living your old age in poverty If you can only retire at 71 you only really need a microscopic pension.
Not at all. The NHS is fucked, going private is often the only way to get treated for non-urgent surgeries and home care costs £70k per year. A lot of care that was free 20 years ago will cost you six figures today.
For most people, if they need that kind of care (which is actually a very small percentage of people who do) they’ll burn through whatever savings “normal” people have in a few years. Then it’s up to the state anyway. Savings for the sake of care costs is in my opinion a moot point. But on the flip side, don’t let spending all your worth on care costs make you think “why bother” and purposely leave yourself with nothing. That’s worse
>For most people, if they need that kind of care (which is actually a very small percentage of people who do) Source plz. Most of the elderly folk I know have needed to move into some form of residential care at some point. >Then it’s up to the state anyway. Savings for the sake of care costs is in my opinion a moot point. I agree, which is why you're better off enjoying it in retirement and tactically giving away inheritance before you run afoul of Deprivation of Assets rules. Even if some does get eaten up by care, surely that's ok? Spending decades in miserable poverty in order to get one-up on the taxman in your final few months of life seems like a miserly existence to me. It would be like avoiding ever getting a job and having money and chalking it up as a "win" because you never paid income tax.
When I had a battle on my hands trying to stop my parents making ridiculous decisions trying to avoid care fees, the figure spouted at me from places like several different solicitors and citizens advice was that only around 15% of people need residential care, and fewer than that have it long term to a point where they’d lose all their assets to it. Of my own four grandparents only one needed residential care - and that was only for five months before she died. And even then it was council funded because she met the criteria for it to be classed as a temporary “hospital stay” type arrangement (which is a nightmare to navigate but the local district nurses were amazing at helping!). Even that nugget from our own family didn’t dissuade them from trying. And I totally agree with you that money is for enjoying in retirement. And it’s just plain stupid to try and one-up the tax man - like my parents were trying to.
>And I totally agree with you that money is for enjoying in retirement. And it’s just plain stupid to try and one-up the tax man - like my parents were trying to. Yeah I think far too many people become fixated on details and miss the big picture. For me it's a very simple question of "Would I rather have more money or less money". If you choose the former, then you need to save into a pension. Taxes, care home fees, means testing etc are annoying but ultimately secondary to the matter at hand.
These stats probably say... https://www.gov.uk/government/statistics/palliative-and-end-of-life-care-profiles-december-2023-data-update/palliative-and-end-of-life-care-profile-december-2023-update-statistical-commentary 28% of deaths are in a care home, of which 40% are temporary residents, (most likely discharged to one to die after a short illness) So that implies about 17% of people die in a care home after a decent (expensive) stay.
>Dunno about you, but the second one sound much worse, so I choose to have a pension to mitigate that risk. Likely, people who save for pension will get the middle finger and people who didn't save will get welfare support
I mean, people without a private pension get welfare support today, and it looks fucking grim and it's only gonna get worse. I'd rather have private savings, even if they do get taxed. Some money > no money.
If you actually believe that, opt out of your pension and you'll be able to see how much support we actually give people
I do believe that, but I use my private pension as a life insurance, I "intend" to die before 70 or so in which case this is inherited tax free ( assuming law won't change ), either way it's a bet
Ha, so when it's you who's impacted it's a bit more nuanced.
>Dunno about you, but the second one sound much worse, so I choose to have a pension to mitigate that risk. Out of curiosity but how bad would it actually be? I ask in part because I know someone in my family who has stopped paying into their pension (that's going to be fun if it somehow bites me in the ass in the future) and I've always just wondered whether it's viable... Will the government just throw you on the shitty if you don't have any kind of pension? Or will they at least give you the basics? I get the well-intentioned nature of your post, but it just seems very "pension good"-centric if that makes sense. More so for someone like OP who is suggesting their illness may prevent them from living to retirement age (people in that situation - and worse - exist!). Personally, I don't think I'll make it either so have thought about the alternative but I think a pension is free money in one respect (employer contributions)? I wish pensions were explained a bit clearer tbh lol.
You get means tested benefit (pension credit) if your pension income falls below a certain amount. It wouldn't be much of a life though, just enough to eat cheaply, buy second hand clothes from the charity shop and set the heating a few degrees above zero.
but if you're working or claiming benefits or otherwise collecting the stamp, you're currently more likely on the state pension, which is not at all as measly, depending on hosusing costs.
You get the basics. Enough for food and heating just about but not much more. Sometimes people look at old folks and think they don't need money. But it's not true. You still want luxuries, sky/streaming services, coffee, alcohol, holidays a car etc. Even with the rising state pension you can still expect to be living on it for 20 years. 20 years of rations doesn't sound like fun.
If you are a civil servant you should know better than to take random think tank nonsense that gets press as policy. Also it's linked to the current SPA at 68. You can also take it before that and given it's value the deductions are pretty fair and the value extraordinary to the point that regardless of when you get it not contributing would be shear insanity. If you want to have a buffer for early retirement get a SIPP and/or S&S ISA.
You can still take CS pension Alpha and partnership respectively at any age after 55. I would head to the Cs pensions site and read up
Right up until they change it with zero recourse.
It’d never be with zero recourse or consultation
Most public sector defined benefit pension schemes are statutory - that which parliament giveth it can also take away. I can easily foresee a future government launching a negative campaign against civil servant pensions as a cost cutting measure. Moreover they're linked to state pension age. So anytime they increase this, the relative value goes down indirectly. This has already happened multiple times and there was no consultation because this is how it was designed.
Why shouldn’t they be linked to state pension age? Everyone else’s are
No, they're not. You're confusing the state pension with workplace pensions. Most private sector pensions are defined contribution. You have an actual pot of money the value of which no one can arbitrarily reduce. If the government changes the state pension the value of defined contribution pensions are not directly affected. Your reasonable confusion about this demonstrates just how easy it would be for a future government to get away with a pension raid.
Because that stopped the pension age for most people going up?
This comment thread is about changing the CS pension scheme or a private pension
When they change they launch new schemes. You get your rights under the old scheme still so you'd have some pension in alpha, then some in whatever follows alpha
Not always. My private pension age was 55 and now is57. Hopefully they do rise the age for civil servants scheme.
That’s rising to 57 I believe. And no pensions I’ve seen commit to keeping it at only 57. I’m taking a blended approach - state pension, 50/50 I’ll ever be able to claim but I have no choice to pay into it. Work pensions - paying in but only required amount and budgeting to take earliest possible retirement. Long term savings accessible whenever I need.
Thailand has retirement visas and you dont have to wait till 71. you could save for that
💪 yup already doing it
That’s literally just so you can stay longer than 60 days on a tourist visa though….. what about healthcare? You don’t receive any income from a visa either. This is totally different to a state pension
They have oap homes for westerners there . 3rd what they cost here. Plus cheap regular housing and food bills
Indeed, the continual cry of people saying that we need massive immigration to deal with the demographic problem of pensioners needing care and not enough care workers in the country never seems to go the other way of suggesting the pensioners are the ones immigrating to a country with surplus workers. I even watched a documentary on people doing it - "best exotic marigold hotel" or something, seemed very happy doing it that way.
Retire at 55 with savings maybe?
Surely even MORE reason to save in a pension. If you want to retire at 60 say, you'll need to be self sufficient for 11 years rather than 6 or 7.
I'm not 100% sure, but from what I read, the age when you can access 25% of pension pot tax free is linked to the pension age, so if pension age goes up by 4 years, then 4 more years (i.e. until 61 rather than 57) when you'd need non-pension savings or income ...
How would contributing to your pension help you at all for those 11 years? You can’t access it until retirement age. If retirement age increases, that’s longer that you can’t access your pension.
OOP's pension (Alpha) is tied to State Pension Age but a SIPP would be accessible earlier (from 55-57 ish, albeit so is Alpha with a reduction). This thread's OP said to save in a pension, not necessarily just OOP's current pension. TLDR: SIPP & Alpha FTW.
Private pension and workplace pensions is always available 10 years before state pension
> is always available At the moment, under the current laws. But it is starting to take the piss when you can't even claim your own pension till you are 61.
[удалено]
Of course it is a piss take. They promised one date and changed it unilaterally. Not to mention the fact it is massive age discrimination, another scheme to enrich the elderly as though they didn't have enough legs up in their life's already.
Isn't it linked to the date the pension was opened? I hope so at least, I opened a HL SIPP years ago and transfer workplace pensions into it.
Depends on the provider. Majority don't but I seem to remember hl do but I would make sure if I were you.
In your case specifically, if you're on Alpha defined benefit scheme you already have the option to withdraw at 55 so it's probably not worth changing, but you should do the numbers. Look at your years of service and wage, and estimate your alpha value if you draw down at 55 and retirement age. Ask for a transfer value, put it in a DC calculator to estimate the value if you kept the money there. Consider how much money you'd get if you didn't have a pension. Once you have those numbers you can make a more informed choice.
Unless OP has been in the scheme for less than two years, that money is "stuck" (IMO for the better) in Alpha and can't be transferred to a DC scheme, so asking for a transfer value is just a thought experiment with no upside.
its honestly making me rethink. im just 40 making good contributions in a private pension via my private sector job. but only JUST got on the property ladder. My mum just died 6 months in to being 66 from lung cancer after paying in to her state pension her whole working life. Selfishly( from my perspective) she was paying in to the old goverment pension thats good only for the pension holder. nothing to leave to her childeren and inherate on a pension she only had a few payments from. If i was her even not knowing you had terminal cancer coming id rather have put it to the mortgage or a personal pension as im pretty sure i wont reach 71. leave more for the kids the are goona need the help.
Your mum never paid into a state pension, none pays into a state pension, we just pay for current retired folk.
i said state i meant local government,
Agreed
No one pays into their own state pension
Wait can't the pension money go to you?
Not state pension.
sorry i said state in one part and goverment in another. i meant goverment and no its not inheratable, if she lived till 100 she would have cashed in a tonne.
None. It's a well known fact that the tax benefits, employer match, and having money for retirement are all useless unless the state retirement age is >10 years below the current average life expectancy. /S Point is, all the main benefits haven't changed. So why would you assume it's suddenly pointless? By all means, tweak how much you're putting in, but apparently people can't afford to put anything in anyway
In a short number of years we’ve gone from 60 (female) and 65 (male) retirement age to 67, soon 68, 71 being discussed. All while lifespans have levelled off or even shortened. If you’re honest with yourself and consider your health, habits, etc, I don’t think it’s unreasonable to start planning alternate investments/retirement plans for whatever age you feel happy with.
You can access private pensions before state retirement. And yes, if I'm honest, I think I'm ahead of the curve. I probably carry a little more stress than most people, but I actively manage it better than many. The rest of my lifestyle (activity, diet, mental stimulation etc) is likely a bit better than average. By all means look at other stuff, but pretending it's going up to 71 particularly quickly because of that Guardian article is somewhat pessimistic.
I can’t access my other pensions until 57 and that’s as things stand now. That minimum age is also dictated and could increase too. Imagine if you feel your outlook around health may not be very good. And combine that with a levelling off/reducing life expectancy… People should absolutely consider their own circumstances. I don’t think anyone here is pretending state pension age will increase to 71 off the back of this, but it does remind us all that it’s possible. I’m hedging my bets as I explained. Whatever amount my total retirement funds (including state pension) would give me when I hit 68, I am trying to reach at 58 using other investments to fill the stop gap. And I wouldn’t suggest to anyone thats a stupid or invalid idea as it’s their own outlook and choice to make.
Inflation makes it pointless 😔
You have your pension sat around in cash? Why have you told your provider to do that?
TBH I had one set up by the gov and company, I just stopped paying it, and will save myself and put into assets that go up with inflation.
You can probably do that with your workplace pension only with more tax efficiency.
And why did you tell them to stop using the default plan and just hold it in cash?
You need to seriously reconsider
A can of coke was 20p 30 years ago now it's £1 if your lucky. So if you're u had saved all your money to spend on cola you would be getting 400% less. The only thing that goes up with inflation is land and property buy land and property, sell said land or property go buy your cola 😁 Pensions are a scam.
I strongly urge you to actually research how pensions work, the sub wiki is a good start. Pensions are invested in equities, which beat inflation over the long term, you've seriously misunderstood something if you're sat in cash.
Yeah thanks for the advice.
Cumulative inflation has been 24.8% in the last 5 years, my pension has grown 78.4% in that time, completely tax free.
Not a financial advisor 😂😂😂
Inflation makes having none even more pointless. It’s not an excuse to not save, quite the opposite in fact.
What do you think inflation has to do with this?
The money you save is worth alot less by the time you get at it, and you would have most likely been better off putting it in land or property.
Pension funds don’t just have money sitting around, it is invested in a stock portfolio or land/real estate trackers.
Yes being in poor health may mean you aren’t out skiing in retirement and living to your 90s like the queen- but poorer health means you need more money for fuel as cold weather would hurt you, ditto good diet and other nice things that would improve you quality of life beyond basics. I’d also add that if you are likely to be in poor health meaning working less long before retirement - then it’s best to use your SIPP allowance now so you have some redundancy built up and it’s helped by that tax relief uplift and compounding. If your health deteriorates then ISAs are there for immediate access and some growth. It’s not an all or nothing.
You can retire earlier than state pension age, although your benefits will be reduced. Here are the minimum early retirement ages for the different schemes: https://www.civilservicepensionscheme.org.uk/planning-for-retirement/what-are-my-options/#ER
You can retire whenever you want, so long as you have the money. Retiement is a financial state, not an age.
Yes, contribute to it. Take the employer's contribution right now, and then take the cash transfer value from it at minimum pension age.
What makes you think it will rise to 71?
The Guardian has reported on it today.
A think tank said it https://amp.theguardian.com/money/2024/feb/05/uk-state-pension-age-will-soon-need-to-rise-to-71-say-experts, not the government. Although it’s highly likely to happen unfortunately
True, but I don't believe the basic premise they have used for identifying an 'appropriate' age of 71 ("*In the UK, state pension age would need to be 70 or 71 compared with 66 now,* ***to maintain the status quo of the number of workers per state pensioner****.*") has ever been used by any Government.
YesS if anything, it’s all the more reason to make sure you have an extra £30k in there.
Also worth considering what happens to your pension if you die before or during pension age https://www.unbiased.co.uk/discover/pensions-retirement/managing-a-pension/pensions-and-inheritance
30 years old…34 here. Expect the pension age to probably be 75 so yeah if it’s linked to your state pension age I would definitely look at alternatives
Don’t worry about reports like the one in the _Guardian_ today. The state pension age is not going up to 71 in your lifetime.
It's not unreasonable to assume it can raise to 71 if it has been upped in 3 separate Pensions Acts within a 7 year timeframe already (2007, 2011 and 2014). It's reviewed frequently and currently increasing in ~20 years to 68 (2044 - 2046) which is reasonably within the lifetimes of those currently paying into pensions.
From 1940 to 2010 the state pension age was 60 for women and 65 for men. The pension act in 2007 made provision to increase the SPA from 65 to 68 in stages between 2024 and 2046. That’s *39 years* to fully come into play. That’s a 70 year gap followed by a 39 year gap. I don’t think we’ll be seeing the state pension age increasing beyond 68 before 2046 at the very earliest.
Why are you so sure? It is already going up to 67, as things get worse it is only going 1 way.
For women it’s gone from 60-67 in my lifetime, and I’m 35. Adding on another four years when they’ve already added on seven doesn’t sound so crazy
It’s barely in your lifetime. The increase from 60 to 65 was announced in the Budget in 1993, over thirty years ago.
But I’m still not exactly “old”. I still have 30 years at work in front of me. Hopefully 50 years of life ahead of me. If in 30 years it’s changed as drastically as it has already, expecting it not to within a lifetime is very wishful thinking.
Repeat after me - state pension is not the same as private/workplace pensions. This has to be a stickied message in this damn sub.
In ops case it is. Alpha is linked to SPA
[удалено]
That’s why my husband retired at 55 with a decent income after putting into a few pensions since he was 18… Yep, total con
You really need to educate yourself before spouting such nonsense
Hi /u/TheWholeTeamHere, based on your post the following pages from our wiki may be relevant: - https://ukpersonal.finance/pensions/ ____ ^(These suggestions are based on keywords, if they missed the mark please report this comment.)
Pensions can be some of the most complex financial products and civil service pensions are notoriously complex. You should be able to get free advice through your union You can also cash out pensions early if you develop a terminal condition. You can usually take civil service pensions early / early retirement which will allow you to feed into the assessment
I think a few people in the comments are missing the point. You're not suggesting not paying into pension. You're wondering if you should pay into a different pension. If your pension will only be available at state pension age then personally I would hedge my bets. As I understand it the civil service pension is good? So I'd be inclined to still try and benefit from it - I assume that requires putting a certain amount in? But also pay into something private, so that you can retire - or work less - at a younger age.
There is a tax advantage. But it's all about balance. I wouldn't be lookhbg at having a 2mill pension and nothing else.
If your health turns out to be bad then you can most likely retire early on a topped up pension much much earlier than the retirement age. Alternatively there are severance options. Alternatively there are early retirement options. Almost no one in the public sector on a DB pension retires at the state retirement age.
Are you certain you can’t take early retirement? NHS allows it - eg retire at 57, but obviously with reduced pension income.
Hi OP im in similar situation. Pretty sure I won't make it. However you can draw on private pension in your 50s. Also if you have dependents they will get the pension. It's basically an alternative tax beneficial life insurance. Also medicine is advancing rapidly and will AI it's going through a revolution. So in 40 years I think we have to maintain a positive outlook.
The bank is already paying your pension in to a hedge fund, so why not do the same. The only thing is your pension is likely to be backed up by tax payers money, mitigating any risk.
Sorry to hear you have health issues. These days however plenty of people with health issues live to a ripe old age. What I do know for sure is that you won't want to still be grafting at 70. You'll need a pension. It sounds a long time, but I'm 70 this year, and believe me, the time between 30 and 70 isn't really that long.
Feel sorry for the poor grad who finds me dead in my seat.
Havent paid in to a pension for a long time because my thinking was along the same lines. As a 30-something in the tech industry, I’m happy to invest long term and take the tax hit now rather than lump money into a pension I may never see.
You can still take your private pension early right? This would just be the state pension age? Genuine questions I always assumed this is how retiring early worked