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Fewer than half of people saving for retirement
http://www.x404.co.uk/forum/viewtopic.php?f=19&t=7517		 Page 1 of 3
Author:  pcernie [ Sat Apr 03, 2010 3:36 pm ]
Post subject:  Fewer than half of people saving for retirement
http://www.guardian.co.uk/money/2010/ap ... t-pensions

I'm not surprised. While you always get the 'How am I supposed to save?' argument from people that just don't want to, there are people who genuinely can't afford to make it a worthwhile endeavour.

Personally, I've a pension with work (I'm under no illusions about it ;) ) and once I've got my own place I'll start saving all over again for retirement where and when possible - taking out a private pension just doesn't seem feasible/sensible to me over savings come that point :?
Author:  timark_uk [ Sat Apr 03, 2010 3:41 pm ]
Post subject:  Re: Fewer than half of people saving for retirement
pcernie wrote:
there are people who genuinely can't afford to make it a worthwhile endeavour.
*raises hand*

Mark
Author:  jonbwfc [ Sat Apr 03, 2010 6:03 pm ]
Post subject:  Re: Fewer than half of people saving for retirement
The problem surely is at the moment that you are lucky if you can find a savings account that is paying more than 'real world' inflation. Right now, you're actually much much better off paying debts off should you have them (even a mortgage for example) than you are saving money.
Author:  Amnesia10 [ Sat Apr 03, 2010 7:40 pm ]
Post subject:  Re: Fewer than half of people saving for retirement
jonbwfc wrote:
The problem surely is at the moment that you are lucky if you can find a savings account that is paying more than 'real world' inflation. Right now, you're actually much much better off paying debts off should you have them (even a mortgage for example) than you are saving money.

Yes but many people are simply not able to do even that. They are running from pay cheque to pay cheque.
Author:  hifidelity2 [ Sat Apr 03, 2010 7:42 pm ]
Post subject:  Re: Fewer than half of people saving for retirement
Thankfully all of my jobs have had / got a final salary scheme - I have made having this one of the main criteria for choosing a job

On top of that still doing some long term savings for my retirement
Author:  Amnesia10 [ Sat Apr 03, 2010 8:02 pm ]
Post subject:  Re: Fewer than half of people saving for retirement
Yes but I doubt that there will be any final salary schemes before long. Also while the company may have one it may be closed to new entrants. That needs to be factored in. People and companies are simply not saving enough period.
Author:  okenobi [ Sat Apr 03, 2010 8:29 pm ]
Post subject:  Re: Fewer than half of people saving for retirement
I'm in debt, so working on that. However, IMHO few pensions schemes are worth the payments. The system requires us to be in debt most of our lives and our debt is somebody else's wealth. I'm trying to pay off my debt, but I've no doubt more will follow in it's place at some point. Any spare money I may occasionally come across is more usefully directed in that way.

Should I worry about my lack of provision? Probably. Am I going to? Not for a while yet, and maybe not for a long while.
Author:  Amnesia10 [ Sat Apr 03, 2010 9:46 pm ]
Post subject:  Re: Fewer than half of people saving for retirement
okenobi wrote:
I'm in debt, so working on that. However, IMHO few pensions schemes are worth the payments. The system requires us to be in debt most of our lives and our debt is somebody else's wealth. I'm trying to pay off my debt, but I've no doubt more will follow in it's place at some point. Any spare money I may occasionally come across is more usefully directed in that way.

Should I worry about my lack of provision? Probably. Am I going to? Not for a while yet, and maybe not for a long while.

And why I am against student debts. Higher education should be free. We should not burden our kids with debts before they have even started work.
Author:  koli [ Sat Apr 03, 2010 11:38 pm ]
Post subject:  Re: Fewer than half of people saving for retirement
jonbwfc wrote:
The problem surely is at the moment that you are lucky if you can find a savings account that is paying more than 'real world' inflation


Er, I hope you are not implying that saving for a retirement should be done with a savings account. Please tell me you are just joking...
Author:  Amnesia10 [ Sun Apr 04, 2010 8:06 am ]
Post subject:  Re: Fewer than half of people saving for retirement
koli wrote:
jonbwfc wrote:
The problem surely is at the moment that you are lucky if you can find a savings account that is paying more than 'real world' inflation


Er, I hope you are not implying that saving for a retirement should be done with a savings account. Please tell me you are just joking...

Money Box on Radio 4 had someone actually stating the benefits of using ISAs to do just that. There are lower costs than a conventional stock market investment and since the stock market has broadly gone nowhere in the last decade it would have actually out performed such investments. Then eliminate the risk of a collapse in the value of your pension fund like happened a couple of years ago and it could make sense.
Author:  jonbwfc [ Sun Apr 04, 2010 8:10 am ]
Post subject:  Re: Fewer than half of people saving for retirement
koli wrote:
jonbwfc wrote:
The problem surely is at the moment that you are lucky if you can find a savings account that is paying more than 'real world' inflation


Er, I hope you are not implying that saving for a retirement should be done with a savings account. Please tell me you are just joking...

Well no, I was talking about saving in general. There are obvious advantages to having a pension scheme as well as saving since you get extra benefits on a pension scheme like tax reductions and employer contributions and etc. However the point still remains - it is generally true that you will be charged more interest on your debts than you will on any form of saving, if you include inflation. Paying off debt should always be your first option, at least as far as unsecured debt goes.

Jon
Author:  Amnesia10 [ Sun Apr 04, 2010 8:31 am ]
Post subject:  Re: Fewer than half of people saving for retirement
jonbwfc wrote:
Paying off debt should always be your first option, at least as far as unsecured debt goes.

It should also apply to mortgages as well. In the first few years you are barely paying any capital back.
Author:  koli [ Sun Apr 04, 2010 9:45 am ]
Post subject:  Re: Fewer than half of people saving for retirement
Amnesia10 wrote:
jonbwfc wrote:
Paying off debt should always be your first option, at least as far as unsecured debt goes.

It should also apply to mortgages as well. In the first few years you are barely paying any capital back.

I don't agree with paying of debt first under any circumstances!! That depends on cost of that debt and on the benefits and yields of your pension savings. As Jonbwfc mentioned already, when you save with a pension scheme your income tax on that saving will be refunded. So if you pay in £80 into your pension, gov. will refund you another £20 of income tax and that is an instant yield of 25%. Higher band tax payers will get 40%.

Where else can you get 25% yield? How much do you pay on your mortgage? 6-7%? Pretty simple decision, don't you think?

Same goes for using ISA for retirement, it is a stupid idea made by people who think they know best...
People, do you research and don't listen to what people tell you over a beer down the pub.
Author:  okenobi [ Sun Apr 04, 2010 10:32 am ]
Post subject:  Re: Fewer than half of people saving for retirement
koli wrote:
Amnesia10 wrote:
jonbwfc wrote:
Paying off debt should always be your first option, at least as far as unsecured debt goes.

It should also apply to mortgages as well. In the first few years you are barely paying any capital back.

I don't agree with paying of debt first under any circumstances!! That depends on cost of that debt and on the benefits and yields of your pension savings. As Jonbwfc mentioned already, when you save with a pension scheme your income tax on that saving will be refunded. So if you pay in £80 into your pension, gov. will refund you another £20 of income tax and that is an instant yield of 25%. Higher band tax payers will get 40%.

Where else can you get 25% yield? How much do you pay on your mortgage? 6-7%? Pretty simple decision, don't you think?

Same goes for using ISA for retirement, it is a stupid idea made by people who think they know best...
People, do you research and don't listen to what people tell you over a beer down the pub.


Prove to me that I can get a 25% yield in 40yrs and I'll listen. As you can't, savings accounts carry way less risk and are almost guaranteed to be certain. Of course, our dependence on others during our retirement is the real issue and thousands of years ago this problem didn't exist because communities took care of their elders once they were too old to ply their trades.

Paying off debt means living for now. I might not even be alive at 65. Who knows? Now is all we have.
Author:  koli [ Sun Apr 04, 2010 10:49 am ]
Post subject:  Re: Fewer than half of people saving for retirement
okenobi wrote:
Prove to me that I can get a 25% yield in 40yrs and I'll listen.

You get 25% straight away, did you not read my post? Plus if you consider compounding interest (or yield) the difference will be massive in 40 years.
Just for fun:
£80 vs £100 invested for average annual yield of 3% after 40 yrs period:
£80*(1+0.03)^40 = £260.96
£100*(1+0.03)^40 = £326.20
£100 will turn into £326 which is 25% more than £260 from £80

okenobi wrote:
As you can't, savings accounts carry way less risk and are almost guaranteed to be certain.

You can have you pension in cash too you know...
okenobi wrote:
I might not even be alive at 65.

Yeah, I agree, you might die tomorrow. But then why do you have mortgage? If you might die tomorrow you'll be better of renting anyway. Save yourself money and hassle and don't have a mortgage at all.
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