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tomandlu

Average person will need £260,000 for retirement

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https://www.theguardian.com/money/2018/may/16/average-person-will-need-260000-for-retirement-says-report

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The average person will have to save £260,000 over their lifetime to enjoy a basic income in retirement, climbing to £445,000 if they are unable to get on the property ladder, according to a report by a former government pensions minister.

 

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Which means the Government is staring at a massive funding disaster in years to come as there is millions who won't have that much or even close to it  

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5 minutes ago, doomed said:

Just take it off the ones that do save a redistribute it. Surely a vote winner.

not for those who have not had a holiday for 3 years trying to make it.

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20 minutes ago, doomed said:

Just take it off the ones that do save a redistribute it. Surely a vote winner.

Start with the board of Carillion, who, to be frank, should be living in cardboard boxes under the Westway (when they get out of prison).

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39 minutes ago, Errol said:

A quarter of British adults have no savings, study reveals

One in four adults has no savings, a study has found.

https://www.independent.co.uk/news/uk/home-news/british-adults-savings-none-quarter-debt-cost-living-emergencies-survey-results-a8265111.html

Don't forget that the 260k is referring to all savings, including pensions, whereas the "quarter have no savings" is just referring to who has money in the bank.

Every single public sector employee will have a pension, and good proportion of the private sector. 

Slightly worryingly though, that 260k is *on top of* a State pension.  Even leaving aside whether or not a State pension will be paid in the future, 20% of the UK workforce are not even currently accruing it http://www.pensionspolicyinstitute.org.uk/pension-facts/pension-facts-tables/basic-state-pension-table-7

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50 minutes ago, Nabby81 said:

Which means the Government is staring at a massive funding disaster in years to come as there is millions who won't have that much or even close to it  

As Jesus said, the poor will always be with us.

I think a big proportion of these will be destitute through no fault of their own, another big proportion will be those who have never saved simply because they don't want to. 'Me house is me pension' and all that. Others will be those who go out to spend what ever is in their bank account because they are getting paid the next day, yes such people really exist.

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1 hour ago, tomandlu said:

The average person will have to save £260,000 over their lifetime to enjoy a basic income in retirement, climbing to £445,000 if they are unable to get on the property ladder, according to a report by a former government pensions minister.

Does that mean that the price of a home suitable for retirement is 185k? Yeah yeah, i call BS, whats that buy a shoebox up north or a garage down south?

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5 minutes ago, Uncle_Kenny said:

Others will be those who go out to spend what ever is in their bank account because they are getting paid the next day, yes such people really exist.

double_facepalm.jpg.eca6e4b59a710b57657b6c5b41c292a1.jpg

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5 minutes ago, Uncle_Kenny said:

As Jesus said, the poor will always be with us.

I think a big proportion of these will be destitute through no fault of their own, another big proportion will be those who have never saved simply because they don't want to. 'Me house is me pension' and all that. Others will be those who go out to spend what ever is in their bank account because they are getting paid the next day, yes such people really exist.

In addition to that, some bright sparks run their credit cards up to the hilt as well. Not to mention over extended mortgages and car loans. Personally, I wouldn't care how much debt the get into if I wasn't expected to feel sorry for them and bail them out......... for the sake of their kids, of course :rolleyes:.

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19 minutes ago, btl_hater said:

It's certainly going to interesting to see how this whole mess will be dealt with in 30+ years time.

 

theres going to be so many of these people that "something will have to be done" i.e. everyone else will be taxed to bail them out.

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I think it should be possible for someone on an average income:

Assume zero real wage increases and zero return on investment*

Earn £25,000 per year for 40 years.

You'd have to save 26% in this case, but as there is tax relief it would be less. Also employers are now obliged to make contributions as well. So even if the scheme isn't very generous you probably still only need to save something like 10% of your salary.

* In reality there will be real returns on investment, though there may also be real pay cuts. However, when saving for retirement, unless you receive big wage increases, investment returns over decades will be more important.

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1 minute ago, MancTom said:

theres going to be so many of these people that "something will have to be done" i.e. everyone else will be taxed to bail them out.

Not necessarily everyone else. Most IT contractors have a Ltd. Co. because clients demand it for billing.  Your concern is well founded and I'm wondering if I will be "forced" to return to contracting totally artificially, purely so I can put a firewall between this bail out nonsense and my income and wealth (such as it is). Accountants are fully capable of assisting contractors with the synthesis of a client base that looks credible to HMRC (to mitigate IR35 & random audits).

If 100s of thousands of people do this (contractors, ex contractors and other higher rate earners with outgoings much lower than commitments, waking to the benefits of hoarding cash in Ltds) it won't be pretty for those remaining PAYE.
The number of avoiders would swell further if Accountants start promoting the use of Ltds to fend off emergency taxation.
"I see a bad moon rising, etc.."

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1 hour ago, Errol said:

Good luck with that.

Yep, that's all that needs to be said, it just aint going to happen mate, not for paying renters anyway.

Quite simply they will just live off  the state at retirement and get their  £250,000 worth off the state in the way of housing benefit etc

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1 hour ago, Errol said:

 

A quarter of British adults have no savings, study reveals

One in four adults has no savings, a study has found.

https://www.independent.co.uk/news/uk/home-news/british-adults-savings-none-quarter-debt-cost-living-emergencies-survey-results-a8265111.html

But saving is such a fabulous idea right now, what with the massive interest rates and all. Why aren't people flocking to save? 

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Just now, Funn3r said:

But saving is such a fabulous idea right now, what with the massive interest rates and all. Why aren't people flocking to save? 

Especially with housing being so cheap and everything. I blame those damn i-avocados.

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3 minutes ago, Funn3r said:

But saving is such a fabulous idea right now, what with the massive interest rates and all. Why aren't people flocking to save? 

Don't put all your money in saving accounts. Save in a balanced portfolio. Unless you are close to retirement a significant proportion should be in equities. The expected real return on equities might be lower than in the past, but not enough to excuse not saving.

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At 42 I'm broadly on target to have pension savings of £250k. Having £80k in my fund now. But all the boomers I work with will draw down final salary pensions whereas I'm only in a position to have a contributory pension paying exactly the same % of my salary into my pension as the person I sit next to at work l, yet he will take home 4 times my pension simply by virtue of being 10 years older than me and has a final salary pensions  (a boomer with a final salary pension that's capped at his existing salary, but as he is 5 years from early retirement the cap isn't going to make a meaning full difference).

This cap is to the salary you had 8 years ago...not a big deal ATM as wage inflation has barely been 1% at my employer. So no matter how much you earn you will always pay 15% of your salary into the pension scheme to get a canal salary based on the salary you had in 2010.

I do know 30 year olds in the same final salary scheme (joined the company a year before I did) who haven't quite grasped that their final salary scheme being capped eight years ago at the salary they had at age 22 isn't actually that great a deal. 

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  • 302 Brexit, House prices and Summer 2020

    1. 1. Including the effects Brexit, where do you think average UK house prices will be relative to now in June 2020?


      • down 5% +
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      • Even
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      • up 5%



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