# Do you think the state pension will exist when you retire?



## Argonia (Feb 15, 2015)

Are you working on the assumption that there will still be a state pension when you retire and do you expect to receive it? If not, are you undertaking an alternative?


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## DotCommunist (Feb 15, 2015)

sort of hoping for an uprising before I get that old


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## Belushi (Feb 15, 2015)

Yes, though I'm sure the age you start receiving it will continue to go up and that other benefits senior citizens currently receive will gradually be taken away.


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## DotCommunist (Feb 15, 2015)

surely if the day comes when it is taken you should take your old bones on an armed robbery spree. If you get away with it, you've got p's

If you get caught, roof over your head, three squares a day and adequate  heating


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## Pickman's model (Feb 15, 2015)

i expect never to retire. i don't suppose that will be an option then.


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## InfoBurner (Feb 15, 2015)

Artificial superintelligence will negate my puny N.I contributions.


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## Nancy_Winks (Feb 15, 2015)

I don't expect it to provide more than a miserable subsistence from an advanced age. Anything more than that'd be a bonus


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## Greebo (Feb 15, 2015)

My NI record is already wrecked.  In addition to which, the way the age limt keeps being raised, I don't see myself living long enough to reach pension age.


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## bi0boy (Feb 15, 2015)

I bet when we're old we won't vote like the current oldies do, and so will die without free TV licences


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## Nancy_Winks (Feb 15, 2015)

Greebo said:


> My NI record is already wrecked.  In addition to which, the way the age limt keeps being raised, I don't see myself living long enough to reach pension age.


Sorry if this is too personal but is that cos you've got a life limiting medical condition which means you'll probably die before you reach retirement age?


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## DotCommunist (Feb 15, 2015)

bi0boy said:


> I bet when we're old we won't vote like the current oldies do, and so will die without free TV licences


and global warming will have kicked in properly so we won't get a winter fuel allowance


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## beesonthewhatnow (Feb 15, 2015)

The age will have gone up and it will be fuck all is my prediction.


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## Nancy_Winks (Feb 15, 2015)

Wonder what % of people have no pension except state pension at our age (30s-50s)?


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## 8115 (Feb 15, 2015)

I'm worried it will be means tested and I will have saved just enough not to get it.


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## weepiper (Feb 15, 2015)

Nancy_Winks said:


> Wonder what % of people have no pension except state pension at our age (30s-50s)?


*raises hand* I've never worked in a job that offered a pension. And I currently earn so little I'd have to specifically opt in to the workplace pension everyone is now supposed to get automatically. I expect to be poor in my old age, won't make much difference tbh. I'm banking on genius son no. 2 growing up to be a lawyer.


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## kabbes (Feb 15, 2015)

I think that removing the state pensions will be politically toxic for many decades yet.  They will continue to erode its value though, for sure.


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## Treacle Toes (Feb 15, 2015)

Nancy_Winks said:


> Wonder what % of people have no pension except state pension at our age (30s-50s)?



LOADS!...most of my peers don't...I only have one because of work.


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## Nancy_Winks (Feb 16, 2015)

Rutita1 said:


> LOADS!...most of my peers don't...I only have one because of work.


I only have one cos of work too 

But someone here, prob butchers lol, will actually know what % totally rely on state pension.


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## DotCommunist (Feb 16, 2015)

my jammy ma an real dad get an extra military pension because they spent a number of years in west germany giving Ivan the lairy eyeball


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## DotCommunist (Feb 16, 2015)

maybe I should petition the MoD to have it all given to me instead. There must be a procedure for this


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## Treacle Toes (Feb 16, 2015)

There is a pru report that says 14% of those who retired last year  (2014) had no additional pensions. That is one in 7.

http://www.pru.co.uk/pdf/presscentre/no_pension.pdf

I magine that that figure will grow substanstially in 20-30 years


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## Nancy_Winks (Feb 16, 2015)

Rutita1 said:


> There is a pru report that says 14% of those who retired last year  (2014) had no additional pensions. That is one in 7.
> 
> http://www.pru.co.uk/pdf/presscentre/no_pension.pdf
> 
> I magine that that figure will grow substanstially in 20-30 years


That's lower than what I thought. Yeah it's got to grow eh what with the rise of zero hours, cash in hand work and unemployment.

What happens if you've not worked and payed your stamp enough to qualify for any kind of state pension?


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## Greebo (Feb 16, 2015)

kabbes said:


> I think that removing the state pensions will be politically toxic for many decades yet.  They will continue to erode its value though, for sure.


It's already going to be eroded - when the new (much higher) level of it excludes recipients from all the rebates and discounts which you can get at the moment if your sole income is the state pension.  The winter fuel allowance etc will also be phased out, as it will be no longer officially necessary.  Sod that.


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## marty21 (Feb 16, 2015)

I don't have kids so can just about afford to pay into a work pension & a private pension, neither look like giving me a comfortable retirement. I'm hoping my nephews and niece support me in the vain hope that I have a secret fortune


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## DotCommunist (Feb 16, 2015)

marty21 said:


> I don't have kids so can just about afford to pay into a work pension & a private pension, neither look like giving me a comfortable retirement. I'm hoping my nephews and niece support me in the vain hope that I have a secret fortune


pls make a secret treasure map, complete with cryptic clues so that they end up scouring the land and finding a chest containing your old socks


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## Lo Siento. (Feb 16, 2015)

Nancy_Winks said:


> That's lower than what I thought. Yeah it's got to grow eh what with the rise of zero hours, cash in hand work and unemployment.
> 
> What happens if you've not worked and payed your stamp enough to qualify for any kind of state pension?


Yep, and when we get there the government/press will bemoan the problem  and blame us for being feckless spendthrifts who never planned for old age.


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## mwgdrwg (Feb 16, 2015)

I'm 42 and the retirement age is 67 for me now. It's law now to review the retirement age every 5 years, so I'm guessing that it will go up 5 times before I retire, and I will be well into my 70s before I can retire.


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## Dr. Furface (Feb 16, 2015)

mwgdrwg said:


> I'm 42 and the retirement age is 67 for me now.


Where's that, France?


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## BoatieBird (Feb 16, 2015)

Dr. Furface said:


> Where's that, France?



No, UK.

I'm 43 and my state retirement age is 67.


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## peterkro (Feb 16, 2015)

I is just over twelve months away and on pension credit already it's the same as the state pension per week and as I have no national insurance credits will still get the same after 65 even though it isn't called the state pension the money is the same.
I'm fortunate (or unfortunate ) that my age is just before the rising of the age limits so have got bus pass and whatnot.


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## Throbbing Angel (Feb 16, 2015)

It's so depressing that I can't even read the replies above. Anyway, in answer to the OP...

NO, it won't exist, it'll be a sliding scale payments system that relates to how many fucking donuts you didn't eat as a part of Üniveral Kredit. Those failing to engage will be taken out to sea to keep pedalling the offshore wind turbines that were built in the 2020's by those that failed to repay student loans or lose the requisite poundage down the Benefits Gym.


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## lazythursday (Feb 16, 2015)

Am 43 and beginning to have worries about this. I paid into a pension for about 7 years when I was working in full time employment but it is miniscule. Being self employed makes it really hard to put money away - I always feel like I need money accessible in case enough work doesn't come in. And even if I did manage to pay into a pension I don't think I trust the pension industry with my cash either. And I have failed to pay loads of my NI in recent years. 

I wish I was more financially literate cos I'm not convinced that pensions are the best way to save money either. There comes a point where you realise that despite loathing capitalism and the finance industry, being able to play the system might be the only way of surviving, personally.


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## kabbes (Feb 16, 2015)

The generic pension structure is certainly the best way to save money in the long term if you are a tax payer, because you get tax relief on investments and on all interest earned.  If you want to invest 800 as a basic rate tax payer, stick it in a pension pot and it immediately becomes 1000.  That's a 25% increase before you even start.


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## mwgdrwg (Feb 16, 2015)

Dr. Furface said:


> Where's that, France?



UK.

62 in France.


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## rioted (Feb 16, 2015)

I'm on pension credits at the mo. In December I move on to full pension (I've got just enough stamps) and then I'll be able to keep the £20/week LGPS I've amassed making a grand total of about £150/week and no tax. More than I've earned for a very long time. I'll be well off!


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## Dr. Furface (Feb 16, 2015)

mwgdrwg said:


> UK.
> 
> 62 in France.


I thought they'd raised it? - I remember the demo's they had a few years ago.


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## Rebelda (Feb 16, 2015)

I have a small pension from an old job that will work out at about .9 of a penny a year. I expect it'll be even more miniscule when I retire and that'll probably be when I'm about 85.

*enrols child at stage school*


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## mwgdrwg (Feb 16, 2015)

Dr. Furface said:


> I thought they'd raised it? - I remember the demo's they had a few years ago.



It was to raise it to 62. It was 60 before that. Yes....they had demo's when the raised it over 60! We had ours raised to 67 and just whimpered.


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## Guineveretoo (Feb 16, 2015)

I have paid enough national insurance to qualify for it, and I expect that it will still exists, but I am not due to get it until I am 66, and I don't know if I will make it to then! This is very frustrating, as I was expecting to get it quite soon, but they keep moving the qualifying age, and I am worried about money, because no-one wants to employ and ageing, unemployed trade unionist, for some reason. I won't get the free bus pass either, and I probably won't even get the free Oyster card that Boris has been giving to people who are 60, as he will have been ousted by then.


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## marty21 (Feb 16, 2015)

BoatieBird said:


> No, UK.
> 
> I'm 43 and my state retirement age is 67.


 and I'm 49 and it is also 67, I thought I might be able to put my feet up at 66


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## marty21 (Feb 16, 2015)

Rebelda said:


> I have a small pension from an old job that will work out at about .9 of a penny a year. I expect it'll be even more miniscule when I retire and that'll probably be when I'm about 85.
> 
> *enrols child at stage school*


 can you make sure junior is a megastar - then they can support all of us


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## Rebelda (Feb 16, 2015)

marty21 said:


> can you make sure junior is a megastar - then they can support all of us


You're off the list


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## marty21 (Feb 16, 2015)

Rebelda said:


> You're off the list


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## sojourner (Feb 16, 2015)

Nancy_Winks said:


> What happens if you've not worked and payed your stamp enough to qualify for any kind of state pension?



I'm interested in that too. Someone very close to me has been on the road in bands etc for years, not signed on, not had jobs. Worked for about 12 years part-time and paid NI in that time only.  Dunno wtf is gonna happen at pension age.



peterkro said:


> I is just over twelve months away and on pension credit already it's the same as the state pension per week and as I have no national insurance credits will still get the same after 65 even though it isn't called the state pension the money is the same.
> I'm fortunate (or unfortunate ) that my age is just before the rising of the age limits so have got bus pass and whatnot.



So - you still get SOMETHING if you don't have enough credits then?


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## marty21 (Feb 16, 2015)

sojourner said:


> I'm interested in that too. Someone very close to me has been on the road in bands etc for years, not signed on, not had jobs. Worked for about 12 years part-time and paid NI in that time only.  Dunno wtf is gonna happen at pension age.
> 
> 
> 
> So - you still get SOMETHING if you don't have enough credits then?


 my dad spent a lot of time working in the building trade - cash only - so his NI contributions weren't regular iykwim - he does get a small state pension - don't know how much tbh - but it isn't the full whack -


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## kabbes (Feb 16, 2015)

Alright, lots of confusion about state pension.

BSP

The *basic state pension* ("BSP") is £113 per week at the moment.  Right now, you will get that it full if you have paid NI contributions for *30 years*.  If you paid NI conts for less than 30 years, this will be *reduced proportionately*.  So if you paid those conts for 15 years, you will get half the BSP.

(Note that under some circumstances, your NI conts are paid for you, so it is not necessarily the case that you had to be working for 30 years).

SERPS/S2P/Additional State Pension

If you were earning more than the Lower Earnings Limit ("LEL", typically somewhere in the region of £4-6k per year depending on how far you go back), you would have started paying towards an *additional state pension *(which took various forms known as various things such as SERPS and S2P).  However, you may have "contracted out" of this depending on you employer pension. 

If you didn't contract out and you earned this additional pension *in full*, it would be worth another £163 per week.  However, most people either contracted out for periods or otherwise didn't pay enough NI conts and so get less than this.

From 2016

This all changes in 2016.  The whole lot -- BSP and additional state pension -- are all being replaced by one flat-rate state pension worth £144 per week.  There is no contracting out.  If you contracted out previously, your flat-rate pension gets reduced.

So there has already been a considerable reduction in state benefits one way or other.  That additional second pension could have been worth £163 per week; now it's effectively £31 per week.

Again, if you don't pay NI conts for enough years, the figure will be reduced proportionately.


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## sojourner (Feb 16, 2015)

Cheers.

Looks like there'll be quite a lot of starving old folk then. Us included.


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## Saffy (Feb 16, 2015)

I know at some point when my children were younger I got a letter saying if I paid around £300ish I would be all up to date with my NI contributions, I never did this as we were always so short of cash.


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## kabbes (Feb 16, 2015)

Saffy said:


> I know at some point when my children were younger I got a letter saying if I paid around £300ish I would be all up to date with my NI contributions, I never did this as we were always so short of cash.


On the plus side, you now have £300 in cash.


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## peterkro (Feb 16, 2015)

sojourner said:


> So - you still get SOMETHING if you don't have enough credits then?


Yes I get £148 per week it is the same as the State pension and continues after retirement age.The only difference is it is means tested so you can't have any (or at least not very much) in the way of other income.


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## sojourner (Feb 16, 2015)

kabbes said:


> On the plus side, you now have £300 in cash.


Do you know something I don't?  How do you know they have the cash?


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## kabbes (Feb 16, 2015)

sojourner said:


> Do you know something I don't?  How do you know they have the cash?


You have the £300 you didn't give to them.  At the very least you have less negative money.


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## Sapphireblue (Feb 17, 2015)

i expect retirement age will be higher and state pension will be less, but it will still theoretically exist. 

theoretical in the sense that it won't be enough to live on even if you have paid off your mortgage and/or your full rent is covered by housing benefit.


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## Mogden (Feb 17, 2015)

Sadly I don't think it will and retirement will almost be an extinct concept. I do think by the time my 7 year old sort of niece has grown up we'll have it back on an even keel though.

I have a small pension from my days working in a financial organisation but I believe this generation will be clocking off and climbing into their coffins. As a result I've considered withdrawing my pension and using it now to increase the equity in my house. My retirement plan is to find a few kick ass jobs and put some money by as I've no partner, I bought my house early and have no kids. I might just end up bumbling round the world doing a backpacking bit but when I'm in my 60s rather than my 20s.


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## sojourner (Feb 17, 2015)

kabbes said:


> You have the £300 you didn't give to them.  At the very least you have less negative money.


They didn't have it. If they didn't have it then, that doesn't mean they have it now.

'Less negative money'? Aye, that really helps a person does that.


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## sojourner (Feb 17, 2015)

Mogden said:


> My retirement plan is to find a few kick ass jobs and put some money by as I've no partner, I bought my house early and have no kids. I might just end up bumbling round the world doing a backpacking bit but when I'm in my 60s rather than my 20s.



This is my pension plan:

*On Not Wearing Purple*

Sod wearing purple,
I’m gonna fake dementia.
Sup single malt in Tesco aisles
and Jose Cuervo Gold.
Steal Thornton’s biggest fuckoff box
of truffles,  milk and dark.
Then stuff my face with Krispy Kremes,
leave fingermarks on magazines.
I’ll ride the roads in off-peak times,
rob Asdas far and wide.
A North West quest to shoplift shite
funded by the State.

Like Cooper Clarke
I’ll take up smack,
perfect on a pension.
A tenner wrap’ll see me through
five day’s worth of budget food.
Keep me warm and help me sleep
(cos I can’t afford the heating bills).
Poppy tea and homegrown green
replacing own-brand tins of beans.
I’ll start to deal, and not in stocks,
so stick your purple cardie 
in the Sad Old Bastards box.


Now, the bus pass is an essential part of the plan - spread the sprees over a large geographical area so as not to arouse too much suspicion. In the event of the bus pass being withdrawn (which looks increasingly likely), I'm fucking off to Barcelona where I hope to scratch a living doing...something. Street poetry, maybe


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## Mogden (Feb 17, 2015)

sojourner said:


> This is my pension plan:
> 
> *On Not Wearing Purple*
> 
> ...


Likelikelike


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## marty21 (Feb 17, 2015)

kabbes said:


> Alright, lots of confusion about state pension.
> 
> BSP
> 
> ...


that seems pretty pretty shite tbh - I didn't opt out of the additional state pension - but it seems I should have as I won't benefit at all


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## Nancy_Winks (Feb 17, 2015)

sojourner said:


> This is my pension plan:
> 
> *On Not Wearing Purple*
> 
> ...


 <3


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## kabbes (Feb 17, 2015)

marty21 said:


> that seems pretty pretty shite tbh - I didn't opt out of the additional state pension - but it seems I should have as I won't benefit at all


Well, if you had have opted out, they'd be reducing the £144, so to be honest I'm not sure if contractors-out are net winners or losers overall.


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## Nancy_Winks (Feb 17, 2015)

lazythursday said:


> Am 43 and beginning to have worries about this. I paid into a pension for about 7 years when I was working in full time employment but it is miniscule. Being self employed makes it really hard to put money away - I always feel like I need money accessible in case enough work doesn't come in. And even if I did manage to pay into a pension I don't think I trust the pension industry with my cash either. And I have failed to pay loads of my NI in recent years.
> 
> I wish I was more financially literate cos I'm not convinced that pensions are the best way to save money either. There comes a point where you realise that despite loathing capitalism and the finance industry, being able to play the system might be the only way of surviving, personally.


Tbf I don't think you need to be a genius to understand the bare bones of it.

If you want to stop work a reasonable time before you die and not have to try and live on £144 a week (which is pretty fucking hard if your own your own) you need to save. From my limited understanding the two best options in terms of (not being) taxed are:
1. ISAs- can get to your money whenever you want (within limits of individual isa rules), but if you need social care the Gov will rinse this out before giving you any.

2. Pension- can't withdraw until 55, but the Gov can't touch it for social care.

You say your not sure pensions are the best way to save money, but I dunno a better more tax efficient one? Pay off your house I guess, invest in a buy to let?


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## kabbes (Feb 17, 2015)

Also, ISAs have very limited scope for investment and very limited options for where you can invest.


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## marty21 (Feb 17, 2015)

kabbes said:


> Well, if you had have opted out, they'd be reducing the £144, so to be honest I'm not sure if contractors-out are net winners or losers overall.


 it was sold at the time as ensuring a better retirement income - about the same time as all those endowment mortgages


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## kabbes (Feb 17, 2015)

marty21 said:


> it was sold at the time as ensuring a better retirement income - about the same time as all those endowment mortgages


I know (I also was contracted in although not for as long as you, Methuselah).  It's a bloody liberty, just like the raising of the retirement age.

If a business tried to do this, it would be against the law, because you aren't allowed to weaken past service benefits.  But the government can do whatever the fuck it wants whenever the fuck it wants.


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## marty21 (Feb 17, 2015)

kabbes said:


> I know (I also was contracted in although not for as long as you, Methuselah).  It's a bloody liberty, just like the raising of the retirement age.
> 
> If a business tried to do this, it would be against the law, because you aren't allowed to weaken past service benefits.  But the government can do whatever the fuck it wants whenever the fuck it wants.


 grubby cunts


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## danny la rouge (Feb 17, 2015)

Nancy_Winks said:


> Wonder what % of people have no pension except state pension at our age (30s-50s)?


Me. 

But thanks for grouping me with those in their 30s.


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## fractionMan (Feb 17, 2015)

I'm amazed they got away with it tbh.  I didn't realize it was going to change.


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## Nancy_Winks (Feb 19, 2015)

danny la rouge said:


> Me.
> 
> But thanks for grouping me with those in their 30s.


Wtf is that supposed to mean?


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## danny la rouge (Feb 19, 2015)

Nancy_Winks said:


> Wtf is that supposed to mean?


That I'm 50 and am glad to be considered in the same age group as someone who is 30.


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## mauvais (Feb 19, 2015)

kabbes said:


> Also, ISAs have very limited scope for investment and very limited options for where you can invest.


Can you qualify this?

They seem OK to me; the allowance outstrips most people's pension contributions, and you can even invest in shitty little AIM frauds now - but they're currently useless as a short to medium term option, because the money will probably be out again before interest rates rise above the near-zero level they're at now.


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## rover07 (Feb 19, 2015)

I expect the state pension will be approx £150 per week with no means testing or NI contribution conditions plus housing costs if needed.


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## kabbes (Feb 19, 2015)

mauvais said:


> Can you qualify this?
> 
> They seem OK to me; the allowance outstrips most people's pension contributions, and you can even invest in shitty little AIM frauds now - but they're currently useless as a short to medium term option, because the money will probably be out again before interest rates rise above the near-zero level they're at now.


One thing I was forgetting was that you can now put £15,000 a year into an ISA.  I was still in the mindset of about £5,000 a year.  The £15,000 per year limit makes it more feasible.

It's worth remembering though that a pension with inflation protection and a 50% spouse's benefit on death costs about £30 for every £1 of pension (see here, for example).  So to get a pension that is worth £15,000 in today's money, you would need a fund of £450,000 (in today's money).  Knowing how much you would have to put away requires a lot of assumptions for future fund growth.  But if we assume a reasonable 3% above inflation, you'd need to put £6,000 away every year for 40 years.  Drop that to 30 years (so if you are starting now at the age of 35) and it becomes £10,000 per year.

So you can see that if you're rather more well off and want a pension of more like £30,000 p.a., the ISA limits even at £15,000 per year start to bite.  And if you have less time to save and/or want to start your pension younger, this becomes rather more crucial.

And then, are you going to get 3% above inflation in an ISA investment?  In today's world, that means getting something like 5.5%.  That's not an easy ask.  Not many ISAs are that generous.

If you have 30 years to invest, want to assume a more conservative 1.5% above inflation (so that's a return this year of about 4%) and want a £20,000 pension, you'll have to save £16,000 per year.  That's more than even the current ISA limit.

When you invest in a pension, you immediately get a return of your income tax, which makes the investment immediately at least 25% more than you actually paid if you are on basic rates.  On top of that, your employer may well be contributing.  None of that is true with an ISA.


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## mauvais (Feb 19, 2015)

Fair points, but limits aside, you could arguably get your target return out of a stocks & shares ISA (in which you can self-pick) rather than being stuck with whatever rate a cash one offers. The risk/reward alters, of course, but then that's where your managed pension fund money probably is anyway.


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## kabbes (Feb 19, 2015)

mauvais said:


> Fair points, but limits aside, you could arguably get your target return out of a stocks & shares ISA (in which you can self-pick) rather than being stuck with whatever rate a cash one offers. The risk/reward alters, of course, but then that's where your managed pension fund money probably is anyway.


 This conversation has actually opened my eyes a bit to ISA investment, so thanks for that.  I had assumed it was all shitty 1.6% bonds and things, but a modicum of research has revealed otherwise. 

Like most things, it's probably good to do a range of things.  Pension pots are good as a base savings vehicle to put things away for a given retirement age.  Other, more flexible options like ISAs are a good supplemental vehicle to give you some additional freedom to, for example, retire early should you be lucky enough for that to be an option.


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