Pension stuff, how's it all looking ? HAve you prepared ?

[mangocrazy]

For me, the question is why is your electricity/water/gas so expensive?

Profit. For example, British Gas profit was…. …£751m in 2023.

So, about £28 per UK household.

As BG has a UK market share of approx 20%, the annual profit per household supplied is £140

[Horse]

Profit. For example, British Gas profit was £72m in 2022, £751m in 2023.

https://www.theguardian.com/business/20 ... s-centrica

On what turnover, i.e. what % was profit?

You Google it, I couldn't care less.

You obviously care a bit because you stated 'profit' and gave figures.

FWIW, one source says:

The profit boom was largely thanks to a tweak to the regulator Ofgem’s energy price cap that allowed the supplier to recoup some of the costs of supplying its 10 million customers during the energy crisis.

Ofgem’s controversial decision to allow energy suppliers to claim greater profits from hard-hit customers via the energy price cap also led to a windfall for EDF Energy and Scottish Power.

Another notes:

Centrica previously cancelled its final 2019 dividend payment and made no payouts to shareholders in 2020

'Operating margin' for BG Energy
2022 1.9%
2023 8.2%

[JackyJoll]

Profit. For example, British Gas profit was…. …£751m in 2023.

So, about £28 per UK household.

As BG has a UK market share of approx 20%, the annual profit per household supplied is £140

Yes that sounds more valid.

[Horse]

As BG has a UK market share of approx 20%, the annual profit per household supplied is £140

Yes that sounds more valid.

So - very roughly - one month's payment. Tying in with the 8% profit.

[JackyJoll]

This is all very exciting, but it's got nothing to do with pensions or whether you're prepared for retirement.

We can fit an anti-big business rant in anywhere.

[Horse]

This is all very exciting, but it's got nothing to do with pensions or whether you're prepared for retirement.

Ìt does if you consider contingencies.

Edit:
From one side, consumers, bills rocketing. From the other side, shareholders and dividends - or not.

[Mr. Dazzle]

Is that profit before or after the 75% (I think?) tax energy providers pay.

I'm not actually that interested, I'm just pointing out it's a complicated interlinked subject.

[Horse]

This is all very exciting, but it's got nothing to do with pensions or whether you're prepared for retirement.

Ìt does if you consider contingencies.

Edit:
From one side, consumers, bills rocketing. From the other side, shareholders and dividends - or not.

Perhaps, but if you've failed to provision to even pay your gas bill during retirement then you're so bolloxed that taking part in the conversation isn't going to help you much.

I doubt many people on low pensions would have been "meh, it'll be fine" at the fluctuations in fuel prices over the last couple of years.

And this loops back to the 'how much?' question. Remind me who asked that ...

What is the average pension pot for a fifty year old person?

Actually, I'm being a bit unfair. You're probably not an average person. But the same things apply.

[weeksy]

£3-5k now won't be worth £3-5k in twenty-five years time.

Surely your £3k is still going up as it's invested now ? I'm making assumptions here, but surely your pension once you start taking it doesn't just stop at that figure forever ?

[weeksy]

£3-5k now won't be worth £3-5k in twenty-five years time.

Surely your £3k is still going up as it's invested now ? I'm making assumptions here, but surely your pension once you start taking it doesn't just stop at that figure forever ?

I don't have much of a pension, probably £60k all in, so my retirement will be funded by savings and investments, which aren't guaranteed to rise with inflation, unless I buy an annuity with some of it, but even those aren't guaranteed after a time.

It's was more of a generalisation question than specific to you.

So if my pension is £3000 a month, i'm guessing as time goes on that goes up too ? (assuming markets work in your favour) Rather than just being a set figure of £3000.

[JackyJoll]

A small part of my work pension is Additional Voluntary Contributions. The main part is final salary.

The AVC is treated pretty much like a pension scheme with an actual pot of money. The amount they offer always sounds disappointing.

I took the AVC as an annuity. There were many choices. Linking it to inflation was optional and significantly reduced the monthly income.

Letting my (younger) Mrs have a 50% widow’s pension should I croak, was another option which significantly reduced the income.

My drinking loads of units increased the annuity, as did my asthma. My not smoking decreased the annuity.

[JackyJoll]

there are some things in the small print that I don't like, such as the payments only being guaranteed for a certain length of time, then they might go down.

In my own case I got the income guaranteed until death. That’s another thing that reduced the annuity.

[JackyJoll]

Annuities are low because they are going to pay what is agreed, no matter badly interest rates and the market perform and (in cases like mine) no matter how long the beneficiaries live.

I did it out of curiosity as much as anything. It involved about 4% of the theoretical fund.

[JackyJoll]

I don't have much of a pension, probably £60k all in, so my retirement will be funded by savings and investments, which aren't guaranteed to rise with inflation, unless I buy an annuity with some of it, but even those aren't guaranteed after a time.

I can’t remember if you said you pay tax in the UK. One of the reasons resident Brits talk about pensions a lot, is that putting money in a pension can get you out of paying higher rate income tax.

[Count Steer]

Anyway, just out of interest, what do you reckon is enough to retire with?
(if your house is paid for, you have no debt and you have sensible expectations)

This popped up today. https://www.fidelity.co.uk/markets-insi ... SDaNrdenfM

It's a tad long-winded but I thought you might be interested in this bit:

How much will you need for a decent retirement?

New estimates of retirement were published by the Pensions and Lifetime Savings Association (PLSA) earlier this month. Individuals seeking a comfortable retirement should now expect to spend £43,100 a year, up by 15.5%.

At Fidelity, we recently ran some calculations based on retiring at age 65 with the aim of delivering income of £43,500 a year, escalating with inflation. 

The individual would receive the current full State Pension from age 67, £10,600 a year today, reducing the income they need from investments to £32,882.

A woman would need to accumulate £640,000; a man would need less, £600,000, due to their shorter life expectancy. This is based on the income rising with inflation at 2% and assumes investment growth of 5% gross with 1% fees and with no plan to pass on an inheritance.

Life expectancy is assumed to be 20 years for a man and 22 years for a woman. But if the man lived to 92 rather than 85 they would need to save £750,000 - an additional £150,000.

Variables in investment returns can also warp the maths. If annual returns were as poor as 2%, the man would need £810,000. If markets were kind and he notched up 8% gains he would need only £460,000.

Finally, we can’t forget inflation. If the Consumer Prices Index, or CPI, settled over the very long-term at 4%, the sum needed would leap to £803,000.

[Count Steer]

My FA did the calcs on his fancy sheet and he reckoned to absolutely guarantee £40k a year, every year, (based on historical performance over the last one hundred years) you'd need a pot of just shy of a million, but you can do it with less, the one million figure is a worst case scenario.

The thing with some of these calculators is that the money is still generating the, nominal, £40k pa the year you fall off the perch. If you want to wind down the capital £1M will last 25 years if you spend £40k pa and get no return on investment. (Ignoring inflation).

FAs and Fund Managers don't like the idea that you can just spend it.

[JackyJoll]

Individuals seeking a comfortable retirement should now expect to spend £43,100 a year,

About £51,000 gross, according to the podcast. Gosh!

[Horse]

Individuals seeking a comfortable retirement should now expect to spend £43,100 a year,

Hmmm ... I wasn't spending half of that when working ... Need to up my game now retired!

[Bustaspoke]

Hmmm ... I wasn't spending half of that when working ... Need to up my game now retired!

Same here!

[Horse]

Hmmm ... I wasn't spending half of that when working ... Need to up my game now retired!

Same here!

If it was funded adequately, I'd be willing to give it a go