Will Six Out Of 10 Workers Really Have To Work Past Their Pension Age?

[cashinmattress]

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The majority of Britons believe they'll have to keep on working beyond their state pension age or sell their home to fund their retirement, a survey claims.

Far from packing in their day-job and enjoying a well-earned rest, a study by pension software firm Sage found that 60 per cent of us expect to have to maintain employment after hitting state pension age.

Such is the concern over a possible retirement crisis that millions of people who are pessimistic of their prospects of saving enough to maintain their lifestyle are already planning on a lengthier career to make up the difference.

What job functions do these 60+ year old people hope to full?

Who is going to hire this wave of geriatrics?

How does the government plan on regulating the wolves that will 'sell' these seniors homes and 'mind' their monies from said home sales?

[sleepwello'nights]

Who is going to hire this wave of geriatrics?

Most of them are currently working, the question should be who is going to sack this wave of geriatrics.

Mind you a lot of us geriatrics are self employed. Grey hair doesn't turn you senile overnight, nor does your body cease to function. I personally know a lot of geriatric tradesmen who are fit and competent enough to generate enough work to keep their businesses operating.

[South Lorne]

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What job functions do these 60+ year old people hope to full?

Who is going to hire this wave of geriatrics?

How does the government plan on regulating the wolves that will 'sell' these seniors homes and 'mind' their monies from said home sales?

..who needs to hire when in law now...they never need retire...where have you been....?....and of course less jobs for the young ..if there are no opportunities for first time buyers in the housing market it dies a death ...likewise the labour market for the young ..stifled by this oldies charter......

[moneyfornothing]

..who needs to hire when in law now...they never need retire...where have you been....?....and of course less jobs for the young ..if there are no opportunities for first time buyers in the housing market it dies a death ...likewise the labour market for the young ..stifled by this oldies charter......

+1000.. One of the policies that show the older generation selfishness... No problems with them competing for jobs after retirement age, but to take away the right of employers to retire them after retirement age is taking the piss.. All under the guise of ageism of course..

[StainlessSteelCat]

They need them to keep working to service their debts.

[Timak]

I was speaking to a friend at work the other day who mentioned they were 52, married with no kids and had a household income (split 50/50) of about £45k a year.

They said every penny of their income was spent on compulsory bills and they had literally no savings and no prospect of retirement.

Now I'm married with 2 kids, about 20 years younger and manage to save lots on a similar household income. I obviously don't know every detail of their lives and past but I was surprised about the fact they would have no savings at all.

[winkie]

They need them to keep working to service their debts.

I think you will find more are required to work without having any debts, once all their savings have gone.....they need to work to live, a basic state pension does not pay the rent, bills council tax, run a car, help the kids etc.

[Frank Hovis]

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What job functions do these 60+ year old people hope to full?

Who is going to hire this wave of geriatrics?

Older people are ideally suited for supermarket type work, I see a lot who IMO are already past pensionable age happily working on. A senior finance guy I knew went to pushing trolleys around the carpark and really enjoyed it, he didn't need the money.

For younger people supermarkets with their low wages and zero hours contracts are a road to nowhere, which is not a problem when you're 65.

I was speaking to a friend at work the other day who mentioned they were 52, married with no kids and had a household income (split 50/50) of about £45k a year.

They said every penny of their income was spent on compulsory bills and they had literally no savings and no prospect of retirement.

Now I'm married with 2 kids, about 20 years younger and manage to save lots on a similar household income. I obviously don't know every detail of their lives and past but I was surprised about the fact they would have no savings at all.

A friend in her early 40s has always earnt in the 30k - 60k bracket, the salary varying depending where she's living, she has debts, zero assets or pension, and because she usually does temp jobs (of preference) can sometimes find herself out of work for a few weeks and has to get straight down the dole office for housing benefit and JSA or she won't be able to eat or pay the rent.

Whilst it's wrong to say she has nothing, she has good life experiences and is generally happy, in financial terms she's in the same position she was when she was twenty. She's the type who would say that money is for spending but with the current cost of housing she doesn't has much to spare anyway.

I am too far the other way (money is for hiding under the mattress) but could in theory retire tomorrow (but don't intend to, want to be extra secure) despite having only worked a couple of years more than her, and because she was much longer in London we've probably earnt about the same. I've never talked money with her, that would be a good way to end a beautiful friendship.

[jammo]

They need them to keep working to service their debts.

What they need is to invent a new type of mortgage which can be passed on to a person's kin. A multi-generational mortgage. This way massive HPI can be baked in (and of course within a few years literally everyone will need to get one!) I'm surprised the evil powers that be have not thought it up yet. So the initial mortgagee works until they die, perhaps a little longer if they could, then their children are automatically burdened with the debt. The bank may kindly allow them to stay in the house or flat (if it is still standing) in return. Very amicable.

[cashinmattress]

Older people are ideally suited for supermarket type work, I see a lot who IMO are already past pensionable age happily working on. A senior finance guy I knew went to pushing trolleys around the carpark and really enjoyed it, he didn't need the money.

For younger people supermarkets with their low wages and zero hours contracts are a road to nowhere, which is not a problem when you're 65.

I'm not having a go, but this is not a solution; ie having jobs that young folk need to get started on the PAYE system filled by seniors. Supermarket work requires long hours and physical labour, not something an aged body and mind is suited for, unless perhaps check out or customer service counter.

And what the heck is your semi-retired friend doing pushing shopping trolleys if he doesn't need the money? Surely if the guy wanted to socialise he could work for a charity, or put time in at the church etc...

To those seniors that are self employed, well good on them if they do it to keep away the reaper. Bad on them if they have whittled away their life using Borat's financial planning system and are taking away much needed from young folk.

At some point we need to roll over the workforce, and this is a crisis that is only just beginning phase.

We're properly fooked in Britain, even more so that comparable economies because we only have service jobs that require a decent level of physical fitness and long hours, something that 17yr olds are suited for and not their grannies.

The government knows this demographic crisis all too well. Fooked.

We know they are going to keep cutting from social welfare. Fooked.

What's the solution? Massive infrastructure to accommodate millions of 60++ folk who haven't a penny, housed in huge communes eating gruel, perhaps stuffing envelops? Farming off boatloads of them to China or elsewhere?

You can get a real sense of this social injustice if you travel to America, where legions of seniors are taking up jobs becasue they can't even afford simple medications. I met more than a few proper grannies working in the likes of Denny's and Wallmart, and that was 15+ years ago. I distinctly remember talking to an 83 year old woman serving me breakfast in one of these places in Florida, and when asked why she was in there she told me it was because she couldn't afford to live in a retirement home as her 60 year old kids were grown up but equally skint, who also had breadline jobs.

[Greg Bowman]

+1000.. One of the policies that show the older generation selfishness... No problems with them competing for jobs after retirement age, but to take away the right of employers to retire them after retirement age is taking the piss.. All under the guise of ageism of course..

To force people to retire was ageist .

Companies don't employ a grey workforce because they are less able or slower. They employ them because they are reliable, savvy and don't get pregnant or throw Monday sickies.

They aren't charities are they? As Frank H said there are two sides to the coin, many 60+ seniors enjoy all the stuff that goes with a regular Job, and will often swop high powered jobs for much more junior roles and enjoy it. I know who I would preferred to be served by.

[Guest TheBlueCat]

I think you will find more are required to work without having any debts, once all their savings have gone.....they need to work to live, a basic state pension does not pay the rent, bills council tax, run a car, help the kids etc.

Spot on. Until people get close to retirement and start staring the actual numbers in the face, they don't realise just how much you need to have saved to produce any meaningful amount of retirement income. To see in all its starkness, consider how much cash you would need just to replace the state pension. For someone aged 65, the current best buy RPI based annuity would cost around 160K.

[John51]

iirc, there was a time when lenders would not give a mortgage that went beyond retirement age. Was talking to an electrician last year, he looked to be in his late 50s. I mentioned that I was retired and he said 'Long time before I can retire, still have 20 years on the mortgage'. wtf?

[winkie]

iirc, there was a time when lenders would not give a mortgage that went beyond retirement age. Was talking to an electrician last year, he looked to be in his late 50s. I mentioned that I was retired and he said 'Long time before I can retire, still have 20 years on the mortgage'. wtf?

The new paradigm is to continually kick the can down the road until it falls over the Clift.

[sleepwello'nights]

Spot on. Until people get close to retirement and start staring the actual numbers in the face, they don't realise just how much you need to have saved to produce any meaningful amount of retirement income. To see in all its starkness, consider how much cash you would need just to replace the state pension. For someone aged 65, the current best buy RPI based annuity would cost around 160K.

How much income does that annuity provide?

[Guest TheBlueCat]

How much income does that annuity provide?

About the same as the state pension, just short of 6K per year going up annually with RPI.

edit: and to add, the maximum amount you could have in a personal pension before the government start stealing 55% of any excess - 1.25M starting this april - would buy you an annual RPI linked pension of about 42,000. That fund value cap doesn't apply to public sector pensions of course.

Edited March 1, 2014 by TheBlueCat

[hemichromis]

I hope not! my pension age is already 68 and has plenty of time to go higher!

Maybe i should get a couple of huge BTL mortgages surely that would let me retire at 60 !

[SpectrumFX]

About the same as the state pension, just short of 6K per year going up annually with RPI.

edit: and to add, the maximum amount you could have in a personal pension before the government start stealing 55% of any excess - 1.25M starting this april - would buy you an annual RPI linked pension of about 42,000. That fund value cap doesn't apply to public sector pensions of course.

I though it was a limit on the tax relief on the amount you could put in and that the fund value could be higher through investment returns on the money put in.

Edited March 2, 2014 by SpectrumFX

[Guest TheBlueCat]

I though it was a limit on the tax relief on the amount you could put in and that the fund value could be higher through investment returns on the money put in.

Nope, it's a limit on the actual fund value at the point you cash it in, not on the total value of contributions.

edit: details:

http://www.hmrc.gov.uk/pensionschemes/understanding-la.htm

If you're in a money purchase scheme

For a money purchase scheme it‘s the value of your pension pot that is used to pay your pension benefits, (such as an annuity and a tax free lump sum) that is tested against the lifetime allowance at the time you take your benefits.

Edited March 2, 2014 by TheBlueCat

[SpectrumFX]

Nope, it's a limit on the actual fund value at the point you cash it in, not on the total value of contributions.

edit: details:

http://www.hmrc.gov.uk/pensionschemes/understanding-la.htm

That seems like a great opportunity for some fiscal drag based plundering of pension pots.

[Guest TheBlueCat]

That seems like a great opportunity for some fiscal drag based plundering of pension pots.

Coming you way soon, particularly when inflation finally kicks into gear. I transferred my own money purchase pension to Canada recently, partly because I can see the cap getting lower and lower in real and nominal terms, partly to get it out of the clutches of Alex Salmond (it was with Standard Life) and also because it's a lot easier to get the money out of the Canadian equivalent if there's a hint that the government is considering confiscation.

[cashinmattress]

Coming you way soon, particularly when inflation finally kicks into gear. I transferred my own money purchase pension to Canada recently, partly because I can see the cap getting lower and lower in real and nominal terms, partly to get it out of the clutches of Alex Salmond (it was with Standard Life) and also because it's a lot easier to get the money out of the Canadian equivalent if there's a hint that the government is considering confiscation.

What exactly are you on about?

Who is going to 'confiscate' your pension? The taxman?

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"Once you are UK resident, any withdrawal made from the RRIF will be taxable and reportable in the UK.

"The 15 per cent Canadian tax withheld at source would not be available for you to offset against the UK liability. This is because the Canadian tax withheld is on the lump sum withdrawn, but the UK charge arises as a result of the disposal of the underlying assets.

No guarantees in Canada these days as the private pension system has been ransacked over the past 20 years and the pensionable age there is being pushed to 67 in due course.

The investment portfolios have moved away from more stable bonds and into the stock markets, just like everywhere else.

In terms of stability, Canada's pension funds are on as equally rocky grounds as are the UK and US.

All three need to reign in borrowing and start folk saving.

There are going to be a lot of hungry, cold seniors everywhere.

[Guest TheBlueCat]

What exactly are you on about?

Who is going to 'confiscate' your pension? The taxman?

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Yes, there's a 55% tax on anything over the lifetime limit and that limit is coming down year on year. You can gamble on that tax rate not going up further and the limit not going down even more, but I wouldn't. I also don't trust Salmond, the man who has repeatedly threatened to walk away from his financial responsibilities, not to stick his grubby paws into the pot once Scotland is independent.

No guarantees in Canada these days as the private pension system has been ransacked over the past 20 years and the pensionable age there is being pushed to 67 in due course.

The investment portfolios have moved away from more stable bonds and into the stock markets, just like everywhere else.

In terms of stability, Canada's pension funds are on as equally rocky grounds as are the UK and US.

All three need to reign in borrowing and start folk saving.

There are going to be a lot of hungry, cold seniors everywhere.

No guarantees at all, but the current RESP regulations are that you can take out money whenever you like (no need to wait until you're 55) and you pay your normal income tax rate on it, not 55% or whatever. I do have to wait 5 years before HMRC consider the money fully unencumbered of course under the QROPS arrangements, but that still lets me get at the cash quicker overall.

[Starla]

Spot on. Until people get close to retirement and start staring the actual numbers in the face, they don't realise just how much you need to have saved to produce any meaningful amount of retirement income. To see in all its starkness, consider how much cash you would need just to replace the state pension. For someone aged 65, the current best buy RPI based annuity would cost around 160K.

Which is exactly why 6 out of 10 workers (or more) will be working past retirement age. I've lost count of the number of friends I have with zero pension provisions or assets that think it's all ok because an inheritance is going to sort it all out. It wants be an utterly enormous one to house and see you through 30 -/+ years. Mate of mine, male model, interesting career can't take that away from him, never worked full time, and apparently doesn't need to because when his parents "go" he will get half their house, i.e. £150k. Facepalm.

[Frank Hovis]

Which is exactly why 6 out of 10 workers (or more) will be working past retirement age. I've lost count of the number of friends I have with zero pension provisions or assets that think it's all ok because an inheritance is going to sort it all out. It wants be an utterly enormous one to house and see you through 30 -/+ years. Mate of mine, male model, interesting career can't take that away from him, never worked full time, and apparently doesn't need to because when his parents "go" he will get half their house, i.e. £150k. Facepalm.

People who have never saved so don't manage and monitor their own investments have IME a very unrealistic view on how much money would be enough to live on; £100k seems to be about the mark so your mate looks relatively cautious!