as you may or may not know i retired 43 months ago at 59 with around 30k lump sum and now £75 a week railway pension and the now reduced lump sum that has dropped to just below £1600
anyway the point is below 16k is the point that state benefits will start to trickle in but not with a weekly income off £75 as that's greater than the £72 or whatever the jsa[job seekers allowance]is
now i have no intention what so ever to claim even if i am entitled but worth keeping in mind if you have a private pension before you retire close to the level of unemployment benefit its worth if possible to set it below the jsa level as it gives you free prescriptions reduced council tax free dental and other help
now as i say at £1600 and £75 a week i get no help
if i set the levels at 1395 and 65 a weeks i would be entitled to £29.02 made up from £5.10 jsa and £23.92 which is a 90% off the council tax this =£1510 help a year or around 3times greater than the £520 a year reduced pension
now its worth pointing out the council tax and possibly the help with housing costs are less than the 16k savings level where i live at i think less than 14k hence the 1395 level
any way food for thought
another point
before you say "you have retired" why do you say unemployment ?? when you are 60 plus iff you sign on you get your stamp paid and other help but do not have to "sign on" so iff your short off the 35 years stamp contributions for the new state pension the stamp will be paid hopefully till you reach the 35 year level
now thats interesting set it at £70 and i would loose just £2 lor £27.02
Pensions, whether private or state, require a basic minimum bank base rate of interest to be in place to support them. If these interest rates are less than inflation then all pensions will degrade to ZERO over time and the lower the rates the quicker this happens.
Pensions invested in the stock market similarly require a decent return. Currently the stock markets are buoyed by the LACK of bank interest (people have no where else to put their money for a return) so the stock markets are currently riding high but not based on company performance, just based on the unavailability of simple interest via alternative (banking) routes.
If bank base rates rise the country goes bust since it will be unable to afford the interest on the debt it owes. Similarly, if bank interest rates rise the stock markets will have their investors take their money OUT to put into the banks and the markets will crash!
All we're waiting for is for one or the other to make the first move - generally the Americans - and an increase in the Fed base rate will cause a massive surge in people buying into the dollar which may delay the final collapse of America but will hasten the collapse of all other economies.
mac12 wrote:Why would you never claim even if entitled?
fairly degrading going through the system not a nice procedure and as i say i earn too much
as i own my own house outright i dont need housing help
as i am over 60 i get free prescriptions any way
i already have 35+ years stamps enough for the new state pension
and as i say as i have more than 14k the council tax help wont kick in
also my son still lives at home and they take his income into account as"household income"
big-all wrote:whilst pensions will gradually be eroded iff theres no inflation that assumes that prices are actually increasing but a pension will never be valuless
I think the point Kellys eye was making was a little lost there BA... You retired when pensions were worth something.. as of now many pension schemes that have been paid into for Donkeys years ( why we use Donkeys ??) are worthless I know mine is.....
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big-all wrote:whilst pensions will gradually be eroded iff theres no inflation that assumes that prices are actually increasing but a pension will never be valuless
I think the point Kellys eye was making was a little lost there BA... You retired when pensions were worth something.. as of now many pension schemes that have been paid into for Donkeys years ( why we use Donkeys ??) are worthless I know mine is.....
that point is not helped by the government allowing private pensions to be accessed at 55 and 25% off the pot can be spent as you wish
nuts im my opinion
BA a lot of people who are at or nearing 55 now have been in various pension schemes.. some of the pension schemes have done well enough that it makes sense for those people to draw down a percentage.. to pay off their credit card debts or mortgages..
As Kellys eye pointed out, interest rates are at their lowest for years. Investment rates are high.
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big-all wrote:whilst pensions will gradually be eroded iff theres no inflation that assumes that prices are actually increasing but a pension will never be valuless
No, not valueless but worthless.
As many poor unfortunates have already discovered.
As someone who has invested most of my life I see investments as important stepping stones to financial independence.
Pensions often do badly because the investment companies traditionally had excessive charges that were often hidden from customers,investment advisers were at one time paid more to sell the customer the product with the most commission,over the years the stock market has done relatively well and the pensions have performed relatively poorly I would say mainly because of charges,coupled with low annuity rates (this is mainly because of low interest rates,so if interest rates go up your investment returns might go down but your income from purchasing an annuity would go up,although now we are not forced to do this).
The other drawback in pensions is the rigidity of the system,the state controls this very tightly and if you need the money for something it's tough,the rules have loosened a bit now but not much,
The best thing about pensions is the tax benefits.
Myself I prefer stocks and shares isa's for one you don't need to put your dividends on your tax return which is a massive bonus,and any capital gains don't need to be calculated or taxed,and you can use your money however you want,pay mortgage off,buy property,whatever you want.
My preferred method is to use a cheap (less than 0.5% annual management fee) all share tracker or maybe even a world wide tracker although this would be biased to American holdings and the all share is bias to U.K. Companies.
My preferred way to invest is monthly as this stops you from investing a massive lump sum to find that the stock market collapses shortly after,and you benefit from pound cost averaging (you can search this as I haven't the time to explain) this type of investing works really well for children as you often have 18 years to invest before it's needed,also it's important to reinvest your dividends (this is compound interest it basically means the bigger the pot the more it grows)
I have lots of friends who never invest in shares because of risk and that's ok if that's what they want,but they are happy to buy a new car every 3 years on finance with guaranteed losses,(20% depreciation first year +10% the next 2 years + 6% interest),and they are happy to spend £60 a month on sky and that is all you need to invest in a good investment like the all share tracker.
So go figure.
It's not a get rich quick thing,you slowly build wealth over the long term,and as each year passes you become more of a shareholder in some of the biggest companies in the world,and gaining the benefits that that holds,governments do your companies favours they change policies for them and sometimes laws,they pave the way for big business,as a worker nobody helps you so it's definitely worth your wile to get more and more of your money in the right place.
This is not advice just saying how I do things,I also have property and like to have a mix of things including some cash,folks do need to get rid of CC debt and any other high interest debt first.
I was only in my thirties when I stopped needing to work to pay the bills and I put this down to putting that money that others throw at new cars,smoking,sky ect into investments that worked as hard as I did.spend less than you earn and invest the difference it's simple yet hard to do.
These users thanked the author stevegrass777 for the post (total 3):
a good well rounded post
i actually got the sack from the railway in 1994 and thought i had lost my pension
but what i didnt realize was to be allowed to sell off the railways the pension was seperated earlier in 94 as previous privitizations had the pensions asset stripped so kept my pension
at the time a train driver was on about £4.65 an hour
now at that time there was seriouse driver shortages so was working 7 days 8hrs one week and 6 days 12hrs the next so 56hrs +72=128 so 64hrs a week plus enhanced pay so for the previous 6 months had earnt 11k and as a final salary pension was based on a 22k salary hence a pension pot untouched for 19 years gave me a 100k pot but that was reduced to cover the year early [at 59] i took my pension
i took the full permitted lump sum off 25% off around 22.5k and a constant pension amount off around £71 then now £76 42 months on
big-all wrote:a good well rounded post
i actually got the sack from the railway in 1994 and thought i had lost my pension
but what i didnt realize was to be allowed to sell off the railways the pension was seperated earlier in 94 as previous privitizations had the pensions asset stripped so kept my pension
at the time a train driver was on about £4.65 an hour
now at that time there was seriouse driver shortages so was working 7 days 8hrs one week and 6 days 12hrs the next so 56hrs +72=128 so 64hrs a week plus enhanced pay so for the previous 6 months had earnt 11k and as a final salary pension was based on a 22k salary hence a pension pot untouched for 19 years gave me a 100k pot but that was reduced to cover the year early [at 59] i took my pension
i took the full permitted lump sum off 25% off around 22.5k and a constant pension amount off around £71 then now £76 42 months on
The old finale salary pensions are hard to beat,I have a coop one frozen until I am old enough and I would have been mad not to pay in as it was a great deal.
Sadly newer company pension funds aren't so attractive,I take it they are weekly figures your quoting .
It's a lot better than people my age and younger will get,finale salary has gone completely apart from historic frozen ones.
Along the way as investment returns have lowered the government has tried to get the charges lowered so a stakeholder pension has less costs than the older private none company ones,but are still more expensive to run than a tracker in a isa if my memory is correct.
Charges matter a lot as when a pot gets big a small percentage = big money.
Final salary is good and I don't think you would have done any better with what you contributed with anything else.
As you have pointed out it's time that makes money and if you contribute early on you will need to contribute less money as long as the charges are low and the investment is good.
stevegrass777 wrote:.... as long as the charges are low and the investment is good.
and that's the crux of the issue for me. Unless you have confidence in your portfolio managers removing the stocks/shares before any (the) collapse then you 'might' be ok.
History tends to show that such management is rare, particularly since they don't run any personal risk themselves, and you could end up with nothing.
Some would still insist in precious metals as the only real safe place to keep your wealth.
why we use Donkeys ??) are worthless I know mine is.....
