revtothelimit - motorbike forum

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.

Potter wrote: Tue Feb 20, 2024 12:03 pm

Horse wrote: Tue Feb 20, 2024 11:55 am

Potter wrote: Tue Feb 20, 2024 11:41 am 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 ...

Potter wrote: Sun Feb 18, 2024 10:53 am 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.

Potter wrote: Tue Feb 20, 2024 12:30 pm £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 ?

Potter wrote: Tue Feb 20, 2024 1:09 pm

weeksy wrote: Tue Feb 20, 2024 1:03 pm

Potter wrote: Tue Feb 20, 2024 12:30 pm £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.

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.

Potter wrote: Tue Feb 20, 2024 1:29 pm 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.

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.

Potter wrote: Tue Feb 20, 2024 1:09 pm
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.

Potter wrote: Mon Feb 19, 2024 3:14 pm 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.

Potter wrote: Sun Feb 25, 2024 5:46 am 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.

Count Steer wrote: Sat Feb 24, 2024 4:28 pmIndividuals seeking a comfortable retirement should now expect to spend £43,100 a year,

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

Count Steer wrote: Sat Feb 24, 2024 4:28 pmIndividuals 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!

Horse wrote: Sun Feb 25, 2024 2:38 pm
Hmmm ... I wasn't spending half of that when working ... Need to up my game now retired!

Same here!

Bustaspoke wrote: Sun Feb 25, 2024 3:01 pm

Horse wrote: Sun Feb 25, 2024 2:38 pm
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

Horse wrote: Sun Feb 25, 2024 2:38 pm

Count Steer wrote: Sat Feb 24, 2024 4:28 pmIndividuals 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!

My view is that people don't actually keep tabs on what's really going out....particularly when there are 2 of them.

Count Steer wrote: Sun Feb 25, 2024 3:32 pm

Horse wrote: Sun Feb 25, 2024 2:38 pm

Count Steer wrote: Sat Feb 24, 2024 4:28 pmIndividuals 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!

My view is that people don't actually keep tabs on what's really going out....particularly when there are 2 of them.

Well, my own 'into the bank' amount was about half of that, so ... ?

Horse wrote: Sun Feb 25, 2024 4:01 pm

Count Steer wrote: Sun Feb 25, 2024 3:32 pm

Horse wrote: Sun Feb 25, 2024 2:38 pm

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

My view is that people don't actually keep tabs on what's really going out....particularly when there are 2 of them.

Well, my own 'into the bank' amount was about half of that, so ... ?

Dunno Hoss but, tbf, most 'how much do I/we need...?' guides usually work on the appropriate fraction of in work earnings needed to avoid retirement shock rather than a 'comfy' figure. (One mans comfy is another man's crusts and gruel). 2/3rds in the initial years springs to mind.

Obvs if people have been living on 40p a month and Greenshield stamps for 40 years, £43k is going to be quite acceptable.

Count Steer wrote: Sun Feb 25, 2024 4:23 pm

Horse wrote: Sun Feb 25, 2024 4:01 pm

Count Steer wrote: Sun Feb 25, 2024 3:32 pm

My view is that people don't actually keep tabs on what's really going out....particularly when there are 2 of them.

Well, my own 'into the bank' amount was about half of that, so ... ?

Dunno Hoss but, tbf, most 'how much do I/we need...?' guides usually work on the appropriate fraction of in work earnings needed to avoid retirement shock rather than a 'comfy' figure. (One mans comfy is another man's crusts and gruel). 2/3rds in the initial years springs to mind.

We'll be ok, but not flush. Filly will get a good pension when she retires, and I will get the state pension, both later this year. After that, if my three 'savings' pension pots recover, I'll stick them into a drawdown option.

We're not totally frugal, but won't fritter either. Foal has been advised that previous largesse and support won't be forthcoming beyond commitments already made. Reductions already made in regular outgoings too.

We've planned to ensure a reasonable lifestyle is not just possible but relatively 'easy'. If it hadn't been, I wouldn't have let Filly put in her notice

Potter wrote: Thu Mar 07, 2024 12:04 pm In the budget they announced a new £5k ISA allowance, so that's £50k a year between a couple.

Plus some NS&I fixed deposit schemes, it said they will be three year products for now, but they're taking a long term view of things, so if I can tie a million quid up in an NS&I 5% fixed deposit for the next three years I'll do that for my retirement income, it's an easy guaranteed 5%.
If I could I'd sign up for 40yrs and that would be me very happily tucked up with a retirement income.

Hopefully they use it exactly for people like me who want to create a very simple pension from a fixed deposit income stream.

So, and please correct me if i'm wrong here, they are once again opening up doors for people who already have a fair chunk of money to be able to make more money for doing fuck all?

Right?

Greenman wrote: Thu Mar 07, 2024 12:54 pm

Potter wrote: Thu Mar 07, 2024 12:04 pm In the budget they announced a new £5k ISA allowance, so that's £50k a year between a couple.

Plus some NS&I fixed deposit schemes, it said they will be three year products for now, but they're taking a long term view of things, so if I can tie a million quid up in an NS&I 5% fixed deposit for the next three years I'll do that for my retirement income, it's an easy guaranteed 5%.
If I could I'd sign up for 40yrs and that would be me very happily tucked up with a retirement income.

Hopefully they use it exactly for people like me who want to create a very simple pension from a fixed deposit income stream.

So, and please correct me if i'm wrong here, they are once again opening up doors for people who already have a fair chunk of money to be able to make more money for doing fuck all?

Right?

But that's a large chunk of people now... You only have to look on here to see that people without money are the minority these days.