Is that all? I thought the number would be much higher.
Destiny7655 on
The only way to do it with DC pensions is to go the Australia route and mandate much higher contribution levels and no opt-out. The UK version has too much leeway that let people off contributing, and it’s not on their full salary either which makes it impossible to get the size of pension people need. The state pension is also totally unlinked from earnings over your lifetime which is kind of bonkers.
Take person A who could theoretically work but doesn’t and gets universal credit (or prior equivalents) for 20 years. They get a full state pension of £13k a year.
Take Person B who works for 10 years, has 5 kids 3 years apart each and so gets 25 years of NI credits. They get a full state pension.
Take Person C who is a low earner throughout their life on minimum wage and works ~20 hours a week. They’re above the lower earnings limit so qualify as though they paid NI even though they don’t. They won’t earn enough to contribute to a DC pot. So they end up with a full state pension and nothing additional even though they’ve worked much more than either Person A and Person B.
Random_Guy_47 on
If they want people to save for retirement they’re gonna have to pay us more.
Wages have stagnated for so many years there’s no money left to save for retirement.
Sonchay on
Without having the time to look at the calculation methodology right this moment, I’d be interested to see the interaction between unemployment/benefits, part-time and so on. Because if you work full time minimum wage, with a basic auto-enrolment pension, then working 40 years and an annualised 7% rate of return nets you a pot of over 400k.
So the system works pretty well for those who are enrolled it, I wonder how much this problem is driven by opt-outs or people simply not having the available jobs or hours to begin with.
Salty_Substance_2477 on
There’s a shock – weren’t we supposed to have had a liveable pension off the government. All of them have spent our money and left us with very little. At what point are we now supposed to save more than we earn to get what we were due?
NearbyPrune3411 on
“not saving enough” implies there’s anything left to save
insomnimax_99 on
We can’t save up for our pensions when we’re being milked dry to also fund the pensions of boomers.
wkavinsky on
When you can barely afford food and housing in the now, thinking about 40 years in the future you becomes an afterthought, as it must.
Fix the cost of living, cost of housing, and the wages so shit that a vast swathe of the working population requires government top-ups, and more people will save for retirement.
DMBear89 on
Oh gee, it’s almost like theres a cost of living crises going on.
Ambitious-Calendar-9 on
Well yeah, how are you supposed to when the cost of living is so astronomical and wages are so low that it’s really not feasible for many people?
mturner1993 on
Doesn’t help a lot of people don’t understand it / see the state pension as easily enough to live off. Which isn’t true of course.
Supergoose5000 on
40 here. Not a chance in living hell will I save the million quid I need to retire at a decent age. Long as I can put 20k together I can bugger of the Switzerland and jump in the suicide booth when I’ve had enough.
TheGloamglozer17 on
That’s me! But I’m just here for a short time, not a good time.
Momo-Velia on
Ah yes, let me save for retirement while struggling to make ends meet on a wage that’s under £30K a year
Geepandjagger on
I keep reading stories that 30% of people couldn’t deal with an unexpected £500 bill so 15 million not saving enough to retire is a given don’t you think
Enderby- on
It’ll only get worse when Labour’s plan to end salary sacrifice comes into play in 2029. Thanks Rach.
SensitiveReindeer23 on
so we are paying the pension for current pensioners but when we come to retire, we will be expected to have saved on our own? So we would have paid out and got nothing in return, sounds great.
CoolJetEcho117 on
Surprisingly low. All the boomer I know are refusing to retire anyway so I’m hoping I feel the same. (Guess what: I’d retire today).
skinnydog0-0 on
No shit!
With rents taking up so much income there is no money left to live- let alone save!
peakedtooearly on
Only 4% of self employed people saving enough…
What a surprise after the government have spent the last two decades squeezing them.
TheWorldIsGoingMad on
Unfortunately the only way you can make people save for retirement is to make them suffer if they don’t. And if they ever means test the state pension that will just exacerbate the issue, after all who would bother saving for retirement then (other then the wealthy) ?
evenifihateit on
I am about a year and a half off repaying my plan 1 student loan and my intention is to just pay the monthly amount that costs into my pension instead once I can. But that’s not an option open to people replying plan 2(and all the rest) student loans, is it? People are really squeezed.
soulsteela on
At least 15 million people living hand to mouth, paycheque to paycheque can’t afford electricity and for some strange reason aren’t saving for retirement! It’s almost as if the treasury asked Boris to let in 1.5 million immigrants to depress wage demands in the U.K.
If only there was some kind of solution, like for example the people in charge could try doing their best for everyone! But that’s just not on the cards and this mystery of a lack of retirement preparedness I’m sure will continue, maybe we need some fucking lord in a committee that costs millions to examine the issue before they blame us.
ExiledBastion on
This is why I don’t think I’ll ever leave the public sector. I transferred in 5 years worth of 7% (plus the 5% from employer) pension contributions from my previous job to the Local Government Pension Scheme. It bought me the equivalent of just over 1 year’s LGPS accrual (which I contribute 6.8% of pay to).
It’d have to be a hell of a payrise to make giving that up worthwhile.
ANTH040 on
I wonder why that is? People have a choice enjoy themselves or save. They can’t afford both unless they are lucky enough be paid above minimum wage.
Altruistic-Bat-9070 on
And labour are currently going after salary sacrifice that will make the problem even worse. I voted labour but their current plan to maintain their headroom above all else is just insane imo.
srubbish on
The pension scam has run its course. The next one will be “you need to actively INVEST to prepare for retirement. We’ve set up schemes to make it easy for you.’
Cosmicshimmer on
Nothing to fucking save! Are they joking?! Literally everything has gone up except wages and they expect us to be able to save when we can’t even afford to live NOW.
MechanicFit2686 on
The issue is that even if you have the default pension contributions (3% employer, 5% employee, etc) that won’t be enough for a comfortable retirement. You need in the region of 12-15% contribution to get anywhere near there. And all the risk is now on you thanks to Gordon Brown killing off all the final salary schemes.
I have a lot of sympathy for anyone struggling to put anything by for retirement. At the same time I see a lot of people who could contribute and aren’t because they just haven’t thought about it. The self employed are often particularly bad at this especially people working physical jobs which you may not be capable of doing up to the state retirement age.
PsychoticDust on
I earn £41,200. I have no debts, I save every month and I live within my means. I cannot afford a home where I live. Reddit usually counters by telling people like me to move up north, but that doesn’t work with the sheer number of people in my situation. I already earn more than half of the country, I shouldn’t be in this position.
No idea how a pension is going to be any good to me, when I’ll have to keep working forever to keep paying increasingly high rent. What happens when I’m physically no longer able to work? It feels like no government has the will to solve what is going to be a very bad issue in just a few decades time.
Metal-Lifer on
another 25 years till i retire, by that time AI apocalypse, WW3, Covid 4, or some environmental disater will have happened and there will be nothing left in the pot
Potential-Bird-5826 on
Hire me, then i’ll start saving. Can’t do shit on UC
Inside_Performance32 on
This involves having money left over to save , especially when rent is 70% of your pay if you love anywhere near London .
Satyriasis457 on
Retirement? At this rate inflation and austerity will wipe out every bit of savings. Soon a pack of noodles will cost £5
Azakaa on
Well… Labours policy to hit private sector pensions with changes to the salary sacrifice schemes will make that number far higher.
trmetroidmaniac on
>Highlighting the risks to personal finances later in life, it said about 30% of private pension pots were accessed at the earliest possible opportunity, with around half of savings taken out in full. Nearly half of this money was spent on large expenses like a car, holiday or renovations.
I think people are just bad with money. They see £££ and make irresponsible decisions.
coltoncruise81 on
Save what? I can barely make it to pay day as it is.
Winter_Cabinet_1218 on
Yeah because cost of living is too high. No point in saving for tomorrow if you’re not going to survive today
VeryNearlyAnArmful on
After rent, transport costs, fuel bills, tax and rates there’s just enough left to eat. No luxuries, no holidays, second hand clothes.
Now what?
Winter_Cabinet_1218 on
With increased cost of living there’s no point in saving for tomorrow if you’re not going to survive today
drewbles82 on
probably cuz at the rate we’re going, we either won’t be alive to see pension age, it’ll keep going up to a point where we’ll be dead long before we can claim it or there won’t be any
ManQu69 on
Hmm save for the future or pay for heating , food you know, to live?… I’ll just pay to live and worry later
Substantial-Bake6521 on
Love these randomly stupid conclusions. Yeah we’re paying for the basics so can’t afford to save more.
megalo53 on
Salaries don’t increase in real terms for 20 years: “why are irresponsible Brits not saving money for their retirements?”
CuteHonkGoblin5 on
It would help us to save enormously if our landlords, electricity companies and council tax didn’t take so much of our money
roidbro1 on
Truly delusional assumptions being made by everyone here that a civilised working society will still even be around in 10- 20 years -30 years.
Look at what the science and experts are telling us.
The governments own assessments it had to effectively hide to avoid causing public unrest and further probing in to the very dark future awaiting us.
As a nation so dependent on foreign imports. We are so close to collapse, you can basically feel it.
46 Comments
Is that all? I thought the number would be much higher.
The only way to do it with DC pensions is to go the Australia route and mandate much higher contribution levels and no opt-out. The UK version has too much leeway that let people off contributing, and it’s not on their full salary either which makes it impossible to get the size of pension people need. The state pension is also totally unlinked from earnings over your lifetime which is kind of bonkers.
Take person A who could theoretically work but doesn’t and gets universal credit (or prior equivalents) for 20 years. They get a full state pension of £13k a year.
Take Person B who works for 10 years, has 5 kids 3 years apart each and so gets 25 years of NI credits. They get a full state pension.
Take Person C who is a low earner throughout their life on minimum wage and works ~20 hours a week. They’re above the lower earnings limit so qualify as though they paid NI even though they don’t. They won’t earn enough to contribute to a DC pot. So they end up with a full state pension and nothing additional even though they’ve worked much more than either Person A and Person B.
If they want people to save for retirement they’re gonna have to pay us more.
Wages have stagnated for so many years there’s no money left to save for retirement.
Without having the time to look at the calculation methodology right this moment, I’d be interested to see the interaction between unemployment/benefits, part-time and so on. Because if you work full time minimum wage, with a basic auto-enrolment pension, then working 40 years and an annualised 7% rate of return nets you a pot of over 400k.
So the system works pretty well for those who are enrolled it, I wonder how much this problem is driven by opt-outs or people simply not having the available jobs or hours to begin with.
There’s a shock – weren’t we supposed to have had a liveable pension off the government. All of them have spent our money and left us with very little. At what point are we now supposed to save more than we earn to get what we were due?
“not saving enough” implies there’s anything left to save
We can’t save up for our pensions when we’re being milked dry to also fund the pensions of boomers.
When you can barely afford food and housing in the now, thinking about 40 years in the future you becomes an afterthought, as it must.
Fix the cost of living, cost of housing, and the wages so shit that a vast swathe of the working population requires government top-ups, and more people will save for retirement.
Oh gee, it’s almost like theres a cost of living crises going on.
Well yeah, how are you supposed to when the cost of living is so astronomical and wages are so low that it’s really not feasible for many people?
Doesn’t help a lot of people don’t understand it / see the state pension as easily enough to live off. Which isn’t true of course.
40 here. Not a chance in living hell will I save the million quid I need to retire at a decent age. Long as I can put 20k together I can bugger of the Switzerland and jump in the suicide booth when I’ve had enough.
That’s me! But I’m just here for a short time, not a good time.
Ah yes, let me save for retirement while struggling to make ends meet on a wage that’s under £30K a year
I keep reading stories that 30% of people couldn’t deal with an unexpected £500 bill so 15 million not saving enough to retire is a given don’t you think
It’ll only get worse when Labour’s plan to end salary sacrifice comes into play in 2029. Thanks Rach.
so we are paying the pension for current pensioners but when we come to retire, we will be expected to have saved on our own? So we would have paid out and got nothing in return, sounds great.
Surprisingly low. All the boomer I know are refusing to retire anyway so I’m hoping I feel the same. (Guess what: I’d retire today).
No shit!
With rents taking up so much income there is no money left to live- let alone save!
Only 4% of self employed people saving enough…
What a surprise after the government have spent the last two decades squeezing them.
Unfortunately the only way you can make people save for retirement is to make them suffer if they don’t. And if they ever means test the state pension that will just exacerbate the issue, after all who would bother saving for retirement then (other then the wealthy) ?
I am about a year and a half off repaying my plan 1 student loan and my intention is to just pay the monthly amount that costs into my pension instead once I can. But that’s not an option open to people replying plan 2(and all the rest) student loans, is it? People are really squeezed.
At least 15 million people living hand to mouth, paycheque to paycheque can’t afford electricity and for some strange reason aren’t saving for retirement! It’s almost as if the treasury asked Boris to let in 1.5 million immigrants to depress wage demands in the U.K.
If only there was some kind of solution, like for example the people in charge could try doing their best for everyone! But that’s just not on the cards and this mystery of a lack of retirement preparedness I’m sure will continue, maybe we need some fucking lord in a committee that costs millions to examine the issue before they blame us.
This is why I don’t think I’ll ever leave the public sector. I transferred in 5 years worth of 7% (plus the 5% from employer) pension contributions from my previous job to the Local Government Pension Scheme. It bought me the equivalent of just over 1 year’s LGPS accrual (which I contribute 6.8% of pay to).
It’d have to be a hell of a payrise to make giving that up worthwhile.
I wonder why that is? People have a choice enjoy themselves or save. They can’t afford both unless they are lucky enough be paid above minimum wage.
And labour are currently going after salary sacrifice that will make the problem even worse. I voted labour but their current plan to maintain their headroom above all else is just insane imo.
The pension scam has run its course. The next one will be “you need to actively INVEST to prepare for retirement. We’ve set up schemes to make it easy for you.’
Nothing to fucking save! Are they joking?! Literally everything has gone up except wages and they expect us to be able to save when we can’t even afford to live NOW.
The issue is that even if you have the default pension contributions (3% employer, 5% employee, etc) that won’t be enough for a comfortable retirement. You need in the region of 12-15% contribution to get anywhere near there. And all the risk is now on you thanks to Gordon Brown killing off all the final salary schemes.
I have a lot of sympathy for anyone struggling to put anything by for retirement. At the same time I see a lot of people who could contribute and aren’t because they just haven’t thought about it. The self employed are often particularly bad at this especially people working physical jobs which you may not be capable of doing up to the state retirement age.
I earn £41,200. I have no debts, I save every month and I live within my means. I cannot afford a home where I live. Reddit usually counters by telling people like me to move up north, but that doesn’t work with the sheer number of people in my situation. I already earn more than half of the country, I shouldn’t be in this position.
No idea how a pension is going to be any good to me, when I’ll have to keep working forever to keep paying increasingly high rent. What happens when I’m physically no longer able to work? It feels like no government has the will to solve what is going to be a very bad issue in just a few decades time.
another 25 years till i retire, by that time AI apocalypse, WW3, Covid 4, or some environmental disater will have happened and there will be nothing left in the pot
Hire me, then i’ll start saving. Can’t do shit on UC
This involves having money left over to save , especially when rent is 70% of your pay if you love anywhere near London .
Retirement? At this rate inflation and austerity will wipe out every bit of savings. Soon a pack of noodles will cost £5
Well… Labours policy to hit private sector pensions with changes to the salary sacrifice schemes will make that number far higher.
>Highlighting the risks to personal finances later in life, it said about 30% of private pension pots were accessed at the earliest possible opportunity, with around half of savings taken out in full. Nearly half of this money was spent on large expenses like a car, holiday or renovations.
I think people are just bad with money. They see £££ and make irresponsible decisions.
Save what? I can barely make it to pay day as it is.
Yeah because cost of living is too high. No point in saving for tomorrow if you’re not going to survive today
After rent, transport costs, fuel bills, tax and rates there’s just enough left to eat. No luxuries, no holidays, second hand clothes.
Now what?
With increased cost of living there’s no point in saving for tomorrow if you’re not going to survive today
probably cuz at the rate we’re going, we either won’t be alive to see pension age, it’ll keep going up to a point where we’ll be dead long before we can claim it or there won’t be any
Hmm save for the future or pay for heating , food you know, to live?… I’ll just pay to live and worry later
Love these randomly stupid conclusions. Yeah we’re paying for the basics so can’t afford to save more.
Salaries don’t increase in real terms for 20 years: “why are irresponsible Brits not saving money for their retirements?”
It would help us to save enormously if our landlords, electricity companies and council tax didn’t take so much of our money
Truly delusional assumptions being made by everyone here that a civilised working society will still even be around in 10- 20 years -30 years.
Look at what the science and experts are telling us.
The governments own assessments it had to effectively hide to avoid causing public unrest and further probing in to the very dark future awaiting us.
As a nation so dependent on foreign imports. We are so close to collapse, you can basically feel it.