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[LC0112G]

Old school retirement...

I will be retiring at at least 67... With the current odds, I won't need a pension

Planning to live on the state pension alone is planning to live in poverty once you retire till you die. It's less than £8K per year, and as you say you won't get it till you're 67 - perhaps even 70 by then. However, if you save your own money into a private/workplace pension, you can start to draw that at any age post 55. You can then retire and live on that from 55 to 67, at which time the £8K state pension comes in as well.

Or you could just piss all your money up the wall on expensive 'phones and other Apple shyte. I was going to put buy expensive cars, but this is an Omega forum so doesn't really apply.

[STEMO]

Old school retirement...

I will be retiring at at least 67... With the current odds, I won't need a pension

Planning to live on the state pension alone is planning to live in poverty once you retire till you die. It's less than £8K per year, and as you say you won't get it till you're 67 - perhaps even 70 by then. However, if you save your own money into a private/workplace pension, you can start to draw that at any age post 55. You can then retire and live on that from 55 to 67, at which time the £8K state pension comes in as well.

Or you could just piss all your money up the wall on expensive 'phones and other Apple shyte. I was going to put buy expensive cars, but this is an Omega forum so doesn't really apply.

£8546.20 pa.

[Doctor Gollum]

Once all the crap is paid off, then I will begin my pension in earnest... Currently not saving anything like enough... However, pension forecasts all seem to be 2-4% growth, which seems shockingly rubbish...

Surely better growth could be had from simply investing monthly in the FTSE 100

[Migv6 le Frog Fan]

What is the state pension worth to a married couple these days ? Im sure it isn't double the above figure, despite the state no longer really recognising or valuing marriage.

[LC0112G]

£8546.20 pa.

Nope. £8569.67 pa. £164.35 per week, and 52.14 weeks in a year 

Once all the crap is paid off, then I will begin my pension in earnest... Currently not saving anything like enough... However, pension forecasts all seem to be 2-4% growth, which seems shockingly rubbish...

Surely better growth could be had from simply investing monthly in the FTSE 100

Pension forecasts HAVE TO, by law, use assumptions in their forecasts that are set by the Govt/Regulators. They're irrelevant. What matters is what YOU decide to invest your pension money in. You can use the default funds which will probably give 'average' returns, or put it all on the FTSE, or choose your own selection of shares, or put it in any of the 10,000+ allowable other investments, or buy a commercial property, or..... The permutations are virtually infinite. About the only thing you can't do is put it all on the 3:30 at Newmarket.

The growth you get will depend entirely on what YOU decide to invest in, not what the projections suggest. If you'd bought $1000 of Apple shares 25 years ago ($1.19 in 1984), instead of $1000 of Apply shyte then it would be worth $162K now ($192.95 today). Add in the exchange rate change between 1984 and 2018 and you might even have £200K's worth. But if you'd bought Poly Peck, Northern Rock, Maplins....etc.

[LC0112G]

What is the state pension worth to a married couple these days ? Im sure it isn't double the above figure, despite the state no longer really recognising or valuing marriage.

Each person gets their own state pension, based only on THEIR OWN national insurance contributions. So going forwards (it's a bit complicated at the moment during the transition period), a married couple will get two lots of state pension, assuming both have the full 35 years NI contributions.

When one partner dies their pension will stop, so the other partner has to continue on just their own pension. Also, you get nowt unless you have at least 10 years NI contribs. A stay at home housewife will get nowt unless they pay voluntary NI contributions, and they won't 'inherit' any of their partners state pension should that partner die.

[Migv6 le Frog Fan]

I have 40 years of contributions. Apparently swmbo has 6 or 7. Might be worth her while paying to bring herself up to 10 years worth ?
Or will they move the goalposts again in a few years and throw the whole thing into confusion again ? 

[LC0112G]

I have 40 years of contributions. Apparently swmbo has 6 or 7. Might be worth her while paying to bring herself up to 10 years worth ?
Or will they move the goalposts again in a few years and throw the whole thing into confusion again ? 

Probably best answered in another thread - If admin want to split this stuff off then I've no objections. However, in the mean time....

You can each check your state pension entitlement here (though you have to register first) : https://www.gov.uk/check-state-pension

It is important you do this to see where you are at. The answer to your question is, as always, it depends.

For you - with 40 years NI I'm assuming you're in your 60's? If you were never contracted out into a private pension scheme then its still entirely possible to get £250+ of state pension per week by the time SERPS/S2P is taken into account. However, if you were contracted out for long periods (into an employer/private pension), then you might only be entitled to as little as £125 p/w. If the state pension checker says you are entitled to less than £165p/w then it may be worth YOU buying extra NI years. Each extra week costs £13.25, and entitles you to about £4.50 per week extra. It therefore only takes 3 years to break even. However, before you do anything, check what your current entitlement is. There are some gotchas where buying the wrong NI years do not increase your SP.

For SWIMBO - How old is she? - Check what she is currently entitled to. She'll get nowt unless she gets to 10 years NI contribs by her SP age. She should have got credits for looking after any kids (whilst claiming Child Benefit) up to age 14 IIRC. So if you've got any kids, then she should have more than 7 or 8 years (at least 14 plus 3 auto credits for 16-18)? If no kids, and assuming she's not up for popping another sprog at her time of life just to get the free NI credits , then yes it's almost certainly worth topping up her NI record. I believe she can buy any unpaid years back to 2006, so potentially she could add another 12 years. AIUI each additional year would cost around £700 and would be worth around £4.50 per week extra pension. She can also buy any years between now and when she reaches her SP age, although you cannot buy the year in which you reach SP age.

The SP is incredibly good value for money, but you do have to have the spare cash to buy the extra years, and then live at least 3 years for it to pay you back. After that it's all free money. And yes they may change the rules again, but the more people you piss off, the less likely you are to get re-elected, and pissing off (soon to be) pensioners is usually a bad idea.

[STEMO]

Luckily, 20 years ago, I invested in a pension which is doing very nicely now. She's sitting out the back with a cold drink. 

[Migv6 le Frog Fan]

I have 40 years of contributions. Apparently swmbo has 6 or 7. Might be worth her while paying to bring herself up to 10 years worth ?
Or will they move the goalposts again in a few years and throw the whole thing into confusion again ? 

Probably best answered in another thread - If admin want to split this stuff off then I've no objections. However, in the mean time....

You can each check your state pension entitlement here (though you have to register first) : https://www.gov.uk/check-state-pension

It is important you do this to see where you are at. The answer to your question is, as always, it depends.

For you - with 40 years NI I'm assuming you're in your 60's? If you were never contracted out into a private pension scheme then its still entirely possible to get £250+ of state pension per week by the time SERPS/S2P is taken into account. However, if you were contracted out for long periods (into an employer/private pension), then you might only be entitled to as little as £125 p/w. If the state pension checker says you are entitled to less than £165p/w then it may be worth YOU buying extra NI years. Each extra week costs £13.25, and entitles you to about £4.50 per week extra. It therefore only takes 3 years to break even. However, before you do anything, check what your current entitlement is. There are some gotchas where buying the wrong NI years do not increase your SP.

For SWIMBO - How old is she? - Check what she is currently entitled to. She'll get nowt unless she gets to 10 years NI contribs by her SP age. She should have got credits for looking after any kids (whilst claiming Child Benefit) up to age 14 IIRC. So if you've got any kids, then she should have more than 7 or 8 years (at least 14 plus 3 auto credits for 16-18)? If no kids, and assuming she's not up for popping another sprog at her time of life just to get the free NI credits , then yes it's almost certainly worth topping up her NI record. I believe she can buy any unpaid years back to 2006, so potentially she could add another 12 years. AIUI each additional year would cost around £700 and would be worth around £4.50 per week extra pension. She can also buy any years between now and when she reaches her SP age, although you cannot buy the year in which you reach SP age.

The SP is incredibly good value for money, but you do have to have the spare cash to buy the extra years, and then live at least 3 years for it to pay you back. After that it's all free money. And yes they may change the rules again, but the more people you piss off, the less likely you are to get re-elected, and pissing off (soon to be) pensioners is usually a bad idea.

Im almost 59, started work at 16. I was  contracted in and out of SERPS, as pensions advice in the 90,s was like doing the hokey cokey in that regard. I will look into the whole thing in the near future, as it might be important in the future, if I live long enough.
My gut feeling is that even with company pension added onto the state pension, Im not going to be retiring at normal age and booking up a series of round the world cruises..
Hence the intention to work as long as Im able to, which will hopefully be past retirement age.
Im not going to mention swmbos age online or any talk of me drawing a pension in future will be rendered pointless. 
Have just been talking about it though, and she intends to look into the whole thing too.
Thanks for the info. 

[tunnie]

I only started a pension when I joined Sky, around 3 years after I graduated. This December will be my 9th year of the pension, I've been contributing 8% of my salary and Sky also put in 8%. With a family to support, I can't see myself increasing these contributions for a while. I think 16% combined is about average? 

They have dropped it for newbies though, they only contribute 6% now.

Don't plan on leaving Sky any time soon, unless Comcast have different ideas. 

[aaronjb]

They have dropped it for newbies though, they only contribute 6% now.

Still better than here - 5% match for us. I was putting in 12% with 5% from the employer for a total of 17%, and that's really about all I can afford with a mortgage and giant tax bill. A friend of mine was putting in something like 30%, but his employer matched 10% IIRC; he'll retire a long time before me!

In fact, due to the constant tax hikes, I've had to drop mine to 5% + 5% for a while.. I *could* be more tax effective by increasing my contribution enough to drop me out of the tax band I'm in, as I'd get effectively 60% tax relief - and now LCOG will be able to figure out how much I earn, I'm sure - but I'd still be sacrificing take-home salary, so it's not an option for now.

I'll probably be at my desk at 5pm on the day of my 2pm funeral, anyway.

[LC0112G]

Im almost 59, started work at 16. I was  contracted in and out of SERPS, as pensions advice in the 90,s was like doing the hokey cokey in that regard. I will look into the whole thing in the near future, as it might be important in the future, if I live long enough.

As it turns out, virtually everyone who will reach SP age after about 2024 would have been better off contracted out of SERPS for as long as it was possible (2012 for most). But the advice in the mid noughties was to contract back in in your mid 40's. I contracted back into SERPS in 2006-7. The advice to do so was correct given the rules at the time, but the subsequent change to the new state pension meant that I would have been better off sticking it out till the very end. However, the big losers were those who never contracted out. They will only get £164 p/w, whereas those that did opt out will get £164 p/w plus whatever their SERPS opt-out pension (ex-protected rights) provides - mine should be close to an extra £80 p/w from age 55.

My gut feeling is that even with company pension added onto the state pension, Im not going to be retiring at normal age and booking up a series of round the world cruises..
Hence the intention to work as long as Im able to, which will hopefully be past retirement age.

In very general terms, it is usually worth paying in whatever you need to in order to get your full company match. Otherwise you're turning down free money. The really big mistake people make is delaying making meaningful contributions to a pension till they're 40 or 50, and concentrating on paying off the mortgage instead. For most it is MUCH more profitable to keep the mortgage big on low (2-3%) interest rate, and pay as much as you can into a pension, reclaiming the tax (20/40% uplift) and aim for the investments to return 5%+ tax free.

In rough terms, every 10 years delay you make in starting meaningful contributions doubles the amount you have to pay in per year later on. If a 20 year old pays in £100 per month, then to get to the same target a 30 year old must pay in £200 p/m, a 40 year old £400p/m and a 50 year old £800p/m.

Im not going to mention swmbos age online or any talk of me drawing a pension in future will be rendered pointless. 
Have just been talking about it though, and she intends to look into the whole thing too.
Thanks for the info. 

Fair enough, and just remember that if you should shuffle off this mortal coil she inherits your entire private pension tax free.

[LC0112G]

I only started a pension when I joined Sky, around 3 years after I graduated. This December will be my 9th year of the pension, I've been contributing 8% of my salary and Sky also put in 8%. With a family to support, I can't see myself increasing these contributions for a while. I think 16% combined is about average? 

They have dropped it for newbies though, they only contribute 6% now.

Don't plan on leaving Sky any time soon, unless Comcast have different ideas. 

Not really any such thing as an average, but 8% match is very good and it would be foolish to turn down free money whilst it is avaliable. However, to put 16% into context, a final salary pension such as those enjoyed by Teachers (hello Stemo  ) Firemen, Nurses, Police etc is generally believed to be 'worth' between 25% and 35% of salary.

 

[LC0112G]

They have dropped it for newbies though, they only contribute 6% now.

Still better than here - 5% match for us. I was putting in 12% with 5% from the employer for a total of 17%, and that's really about all I can afford with a mortgage and giant tax bill. A friend of mine was putting in something like 30%, but his employer matched 10% IIRC; he'll retire a long time before me!

In fact, due to the constant tax hikes, I've had to drop mine to 5% + 5% for a while.. I *could* be more tax effective by increasing my contribution enough to drop me out of the tax band I'm in, as I'd get effectively 60% tax relief - and now LCOG will be able to figure out how much I earn, I'm sure - but I'd still be sacrificing take-home salary, so it's not an option for now.

I'll probably be at my desk at 5pm on the day of my 2pm funeral, anyway.

If you're saying what it sounds like you're saying (personal allowance reduction?) then you need (paid for) professional financial advice from an IFA, not the ramblings of some nutters on an obsolete car forum.