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Today's Children Will Need £2.4M Pension Pot

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http://www.telegraph.co.uk/finance/personalfinance/pensions/10233522/Todays-children-will-need-2.4m-pension-pot.html

The 800,000 babies born in the UK last year will need to save £2.4m into their pension to retire comfortably, while facing rising student and mortgage debt and care costs for their parents.

The Office of National Statistics (ONS) released figures this week showing 813,200 babies were born in the UK in 2011/12, the highest number since 1972.

Research by insurer Scottish Widows claimed these babies will need a pension pot of £2.4m to have an acceptable standard of living in old age. However it will be difficult for this generation to save for retirement because it will take them longer to pay off student loans and mortgage debt.

Scottish Widows said those who go to university are likely to face debts of £73,000, which they will be paying off until they are 52 years old on average.

Frightening stats for future generations. Still at least the problem isn't exponential and minimum wage jobs with zero hours will clearly generate the pension pot needed.

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http://www.telegraph.co.uk/finance/personalfinance/pensions/10233522/Todays-children-will-need-2.4m-pension-pot.html

Frightening stats for future generations. Still at least the problem isn't exponential and minimum wage jobs with zero hours will clearly generate the pension pot needed.

If it only takes them till the age of 52 to pay of a debt of £73,000 then saving £2,400,000 doesn't seem much of a problem does it?

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Research by pension providing parasite says people need to give them more money.

Word. And don't forget to trample over as many people as you need to and put your kids 2nd in order to make the kind of money required to pay such a pension.

Or why not try buy to let as your pension? It worked for Uncle Bob. Better yet, forget about the future if it looks complicated or unhappy, rent (it works in Germany don'tcha know?) everything forever and live for today because life is short and I don't worry about things that are beyond my control unless they affect ME.

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Research by pension providing parasite says people need to give them more money.

This will not continue! :o

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If it only takes them till the age of 52 to pay of a debt of £73,000 then saving £2,400,000 doesn't seem much of a problem does it?

As long as they retire at the age of 1500.

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I suspect that the study is a bit sh1tty and merly projects from the current position in a straight line into the future. I doubt that things will go in a straigt line for the next 90 years or else house prices will also be £1 billion and a loaf of bread will be £10,000 (not even accounting for hyper inflation). How will anyone afford a loaf of bread when they only earn the national average wage of ~£28,000 - diets all round me thinks!

That said this paragraph gave me a chortle. They will need a pot of £2.4million and are only allowed a pot of £1.5million! Joined up thinking at its best and fantastic journalism to boot I expect. Now how much more manure do I need to shovel today?

Under current legislation, however, a maximum "lifetime allowance" applies to pensions, limiting the total size of a fund to £1,500m for this tax year (ending April 2014) and down further to £1.25m in the next (2014-2015). Hefty tax applies to the portions of funds which exceed this cap.

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http://www.telegraph.co.uk/finance/personalfinance/pensions/10233522/Todays-children-will-need-2.4m-pension-pot.html

Frightening stats for future generations. Still at least the problem isn't exponential and minimum wage jobs with zero hours will clearly generate the pension pot needed.

It's ok, Sour Mash says you just need to move jobs a couple of times, like wot he did back in the day.

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Retire?

Retire from what, there's no jobs for 'em in the first place. :unsure:

Just as many economic migrants are moving here to work in coffee bars, shops, hotels etc., a lot more Brits will have to relocate overseas in the future to get work. It doesn't have to be menial stuff either, teaching, nursing, engineering etc will all be in demand the world over. And then there are new skills like seo and social network marketing that can be learnt and then sold as consultancy to businesses in other lands. The big advantage we still have (and for many years to come) is our native language.

Quite how this will fit in with the old pattern of working in the same industry for 40 years and then drawing a pension is debatable. My guess is that those savvy enough to see the way the wind is blowing, will buy up a business that will keep them working til they drop yet with a half-decent income. Perhaps a B&B in Thailand, or a backpacker hostel in Chile, supplemented with English classes etc. This option is still available at home, but obviously you need a far greater cash sum to buy such a business here.

Edited by Trampa501

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Just as many economic migrants are moving here to work in coffee bars, shops, hotels etc., a lot more Brits will have to relocate overseas in the future to get work. It doesn't have to be menial stuff either, teaching, nursing, engineering etc will all be in demand the world over. And then there are new skills like seo and social network marketing that can be learnt and then sold as consultancy to businesses in other lands. The big advantage we still have (and for many years to come) is our native language.

Quite how this will fit in with the old pattern of working in the same industry for 40 years and then drawing a pension is debatable. My guess is that those savvy enough to see the way the wind is blowing, will buy up a business that will keep them working til they drop yet with a half-decent income. Perhaps a B&B in Thailand, or a backpacker hostel in Chile, supplemented with English classes etc. This option is still available at home, but obviously you need a far greater cash sum to buy such a business here.

Probably the most sensible post I've seen in a long while on here.

There really is no retirement and when it existed it was at best a five year holiday between work and death.

Edited by aSecureTenant

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Probably the most sensible post I've seen in a long while on here.

There really is no retirement and when it existed it was at best a five year holiday between work and death.

Yes retirement in my minds eye means financial indepenendence. It certainly doesn't mean melting into a parker knoll chair for 25 years watching the world change around me.

Health permitting, I'll keep working for the social interaction as well as the cash, but at my own pace and doing what I want and can do.

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Probably the most sensible post I've seen in a long while on here.

There really is no retirement and when it existed it was at best a five year holiday between work and death.

well thank you - but I'm not the first to point out that relying on the old retirement system is not going to be much of an option in the future. We may feel hard done-by, but if we avoid major wars and the old days of a large percentage of babies dying before they reach 5 years, it's probably not too bad a trade-off.

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It would have been helpful if they'd given some detail about how they arrived at their £2.4 million pension pot figure and what they meant exactly by "to retire comfortably". It isn't too much to ask.

What did they assume for inflation. Total inflation compounded over the last 70 years since 1943 is about 38 - say 40.

http://

www.thisismoney.co.uk/money/bills/article-1633409/Historic-inflation-calculator-value-money-changed-1900.html

A £2.4 million pension pot in 70 years time would be equivalent to today's £60,000.

5% annuity gives about £3000 per year. Not really enough to live that "comfortably" these days even with the state pension on top.

Edited by billybong

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I suspect that the study is a bit sh1tty and merly projects from the current position in a straight line into the future. I doubt that things will go in a straigt line for the next 90 years or else house prices will also be £1 billion and a loaf of bread will be £10,000 (not even accounting for hyper inflation). How will anyone afford a loaf of bread when they only earn the national average wage of ~£28,000 - diets all round me thinks!

I have just come back from Vietnam and I did indeed buy a loaf of broad for exactly 10,000 Dong (there are 32,000 to £1). I am sure their currency didn't start out like that and who can say for sure the British pound won't go the same way.

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Retire?

Retire from what, there's no jobs for 'em in the first place. :unsure:

Baldrick "Sir, isn't it a bit difficult for me to save £2.4 million for retirement given that I don't have a job?

Blackadder: "Yes."

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