Are people saving enough into their pensions? | IFS Zooms In
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- Опубліковано 19 вер 2024
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Since the introduction of auto-enrolment over 10 years ago, more people than ever are saving into a workplace pension than ever before. However, new research from the IFS shows that approximately 30% to 40% of private sector employees (5 to 7 million people) saving in defined contribution pension schemes are on course to have individual incomes that fall short of standard benchmarks in retirement.
What changes should government make to the auto-enrolment policy? How much do people need to save? What about self-employed people?
To answer these questions, Paul is joined by Jonathan Cribb and Carl Emmerson from the IFS.
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Given recent graduates have £30k to £50K debt before they start work and some pensioners are paying £7k to £9k per month in care home fees a lot of people have "given up" on sensible financial management and have decided to "P*ss it against the wall". Also lots of these pensions companies are charging eyewatering fees for non company pensions.
Indeed. I'm interested to see what comes up in this video, but something that seems to go overlooked so often when people discuss what younger people 'should' be doing is... Reality.
I fucked around a bit (I.e. like most, didn't know what I wanted to do and wasn't happy to go right into a 'career' that I knew I'd hate), and also had the fortune of being university age and graduating around the time of the Financial Crisis.
I then worked via agencies, earning decent enough money (if we ignore agency fees/theft and whatnot) but nothing went into any pension. To get into my current career I had to do a masters/'conversion course'. So, greater graduate tax/saving/paying my way into an industry with a skills shortage. Makes total sense, because why wouldn't government make it difficult for people like me?
I've never been a particularly 'woo, children' person, and the state of the world has reinforced that, so newborns are probably a no. I'm looking another 33 years, should nothing change, until state pension age. I should spend most of that time earning over £100k.
Does it really make sense for me to stick loads into a pension? What can we really know about 3 decades time?
One thing is certain. UK governments will punish people who save enough for their retirement. The only thing that will give people the confidence to save more is a guarantee that politicians won't launch tax raids on pensions and savings. Currently the message is that those who defer consumption now will be punished for their sacrifice later.
Two points:
Employers need to be made to contribute more. 3% is not generous when you are being paid minimum wage.
The employee has no option as to the choice of the scheme provider. This choice can be made for reasons that do not benefit the employees. NEST for example levy eye watering charges of 1.8% on deposits. Employing a top heavy grossly overpaid board. This is not in the employees favour for growth.
My concern is a lot of assumptions about pension levels think people will have zero or very limited housing costs at retirement. Given the cost of housing so many more people will be in rented housing at retirement and those rents will be as high as ever. I worry it's going to be tough for a lot of people in 25-30 years
What's the point in saving when it looks like the younger generations will never get to retire?
This makes zero sense, you can't retire if you don't save you mean, if you choose not to save then you are choosing to not retire.
What about the economic impact of people saving money rather than spending it in the economy, particularly high earners?
why doesnt the govt just make it so that employers MUST offer the employees atleast 1% pay rise per year. many low paid workers on minimum wage never get pay rises
The minimum wage increases every year.
Would be very interested in a video on public sector pensions. I work in the NHS and am curious to know the future of it
I've been autoenrolled even though I pay a lot into a sipp through salary sacrifice but can't be bothered to change it, will merge the when I retire soonish
Why save if your punished for saving at retirement ? Pensioners that did wish they didn't has its cost them their winter fuel allowance for starters & maybe even the state pension down the line . One thing for sure is the 2.6 TRIlLLION Gold plated Civil service pensions are not going to be cut despite apparently having no money .
My “gold plated” local government pension has already had £26,000 taken from it. Government has saved paying me 7.9% of my salary now and save £26,000 in todays money in 2035 & 2036. Doing trust this government not to screw with it further.
You should also know that the local government scheme is very well run and is funded from the people’s contribution, not government money, but labour want to take over the schemes and move it centrally. So they’ll steal the money in the scheme and leave the liabilities.
Not all the public sector schemes are a drain on the tax payer.
Civil service employees will be losing the winter fuel payment too, I'm not sure what you're on about.
Pensioners who miss out on WFA are already losing out on pension credit. Nothing has changed
Save stu. In an ETF 100 dollars a month.
It will go nowhere for many years. Then it will go up like crazy.
And if you are saving/ have saved, you need to know it's worth it. That because you have saved instead of partying in Ibiza, you arent going to be penalised bybremovalnofvsrate pension.
Is this because self employed people were allowed to claim the state pension? I remember Mr Hammond not being able to increase the self employed NI contribution to compensate for the extra outgoing
I have a friend who is self-employed, makes £250k as a plumber (or, rather, a plumber who employs lots of other plumbers, so owns a plumbing firm). Doesn't pay anything into a pension. I asked him why, he simply invests in income generating assets instead. Primarily property.
Not everybody who decides not to invest in a pension is somebody who isn't investing for retirement, in his case he'll just have property income rather than an annuity or drawdown. He also has his firm, which if it continues to do well he could flog for a lump sum or pass down a generation whilst retaining a chunky share of it for the dividends.
Not everybody needs a pension, although I'd personally always have one of some sort of diversification.
without finishing the video the answer is no people are not saving enough for their pensions. My assumption is most people are only contributing the minimum, if they're even contributing at all.
no shit you get penalized for saving and trying to get a better income when your in the lowest bracket
Success is not built on success. It's built on failure, It's built on frustration. it's built on fear that you have to overcome. I pray that anyone who reads this will be successful in Life
You're correct!! I make a Lot of money without relying on the government. Investing in stocks and digital currencies is beneficial at this moment.
My advice to everyone is that saving is great but investment is the key to be successful imagine investing $8,000 and received $42,700.
Making money is the plan and with Bitcoin your plans can be accomplish
I really appreciate Mrs Clara Flint influence during this global pandemic Lock down
Same here, I'm blessed only. God knows how much I praise her, £32,000 every week! I now have a good house and can now afford anything and also support my family, and never will I forget to pay my tithes because God has been so faithful to me and my family
Nobody will save anything under a Labour government. Taxed out of saving.
What are you on about 😂😂 anyone with sense is still saving
@@jaju123456 - He's saying that people won't have the spare cash to save, obviously.
starver will steal it anyway.