[This is an edited re-post of a topic that existed before the forums were hit by a virus in June 2005. Please feel free to add comments]
Are you going to bother saving for a pension? Any savings plan will probably be destroyed by an economic depression.
[PVpost] Pensions
Moderator: Peak Moderation
[PVpost] Pensions
Last edited by PVPoster1 on 24 Aug 2005, 06:03, edited 1 time in total.
I recently started a pension only because the terms offered were
so favourable - ?2 from the company for each ?1 from me. I am
not relying on it to return even the low payouts it is projecting, I
see it more as a lottery ticket. I do not know how to save for the future
with any confidence, I am spreading my bets and increasing my
self-reliance. Pay of your mortgage and learn to grow spuds!
so favourable - ?2 from the company for each ?1 from me. I am
not relying on it to return even the low payouts it is projecting, I
see it more as a lottery ticket. I do not know how to save for the future
with any confidence, I am spreading my bets and increasing my
self-reliance. Pay of your mortgage and learn to grow spuds!
I don't pay any money into my own pension. My company pays 5% of salary regardless, so I just leave that as it is. I don't expect to get any money from it at all, as the world will be a very different place when I reach 60, after the oil crash and destruction of our current economic system.
My pension"" is going to be learning skills that will keep me useful and employable (even if only as a teacher) in my old age. What these skills are depends on what we think the world will be like after Peak Oil has passed but thing like renewable energy growing food making efficient buildings are possibilities
My pension"" is going to be learning skills that will keep me useful and employable (even if only as a teacher) in my old age. What these skills are depends on what we think the world will be like after Peak Oil has passed but thing like renewable energy growing food making efficient buildings are possibilities
Even if you could expect to reach the age of 65 and draw the pension that you are creating it will not be enough to live on. I am between 63 and 64 years old. I have a paid up Private Pension policy that at the last valuation two weeks ago was considered to be worth ?157,000. I have asked for and been given a quotation for an annuity, fixed as an annual sum for the rest of my life, starting before Christmas this year. How much have I been offered? - ?8,400 per annum, which will be subject to full Income Tax.
There is an advert on TV where a young lady tells the world that she is 43 but feels 17 and is uninterested in anything financial. If she wants to retire at age 60 she has 17 years to create her pension fund. Given my figures if she wants a pension of ?10000 a year she will have to create a fund of at least ?220000 (women live longer than men and the actuarial tables give a lower pension for the same money as a man at the same age). Thus 220000 divided by 17 equals 13000. So she would have to save ?13000 a year between now and when she is 60 to create the pension fund. Given those figures she would have to earn at least ?17500 a year gross just to support that level of saving.
Is it any wonder that the young are not interested in creating a pension fund?
And before you tell me that there would be interest on the fund let me tell you the truth about that myth too. My policy was created by transferring the fund from my employer to an insurance company in 1998. I transferred ?154000 in 1998 which is now worth ?157000. So the insurance company has made me ?3000 in interest in the last 6 years on an investment of ?154000. As a matter of interest work out how much it would have made not putting it into the hands of experts but putting it into a building society account at 1.5% compound interest (which the law does not allow us to do because we are not to be trusted to invest our own pension money!!!!!). Correct - it would have made much more! Again I say is it any wonder that the young are not interested in creating a pension fund?
Go check your own pension fund very seriously if you feel that you must have one. Be prepared to be shocked though!
There is an advert on TV where a young lady tells the world that she is 43 but feels 17 and is uninterested in anything financial. If she wants to retire at age 60 she has 17 years to create her pension fund. Given my figures if she wants a pension of ?10000 a year she will have to create a fund of at least ?220000 (women live longer than men and the actuarial tables give a lower pension for the same money as a man at the same age). Thus 220000 divided by 17 equals 13000. So she would have to save ?13000 a year between now and when she is 60 to create the pension fund. Given those figures she would have to earn at least ?17500 a year gross just to support that level of saving.
Is it any wonder that the young are not interested in creating a pension fund?
And before you tell me that there would be interest on the fund let me tell you the truth about that myth too. My policy was created by transferring the fund from my employer to an insurance company in 1998. I transferred ?154000 in 1998 which is now worth ?157000. So the insurance company has made me ?3000 in interest in the last 6 years on an investment of ?154000. As a matter of interest work out how much it would have made not putting it into the hands of experts but putting it into a building society account at 1.5% compound interest (which the law does not allow us to do because we are not to be trusted to invest our own pension money!!!!!). Correct - it would have made much more! Again I say is it any wonder that the young are not interested in creating a pension fund?
Go check your own pension fund very seriously if you feel that you must have one. Be prepared to be shocked though!
Nobicus is quite right. Saving for a pension in a non-growth environment is hopeless.
But why do we need a pension at all? Look back 100 years and almost nobody had a pension as such. So how did they managed?
The answer is multi-generation households.
Feeding grandma and granddad actually adds very little to the cost of the food you buy. Similarly it costs little to house grandparents in the spare bedroom. It costs little more to transport them as part of the family, etc, etc.
On the contrary, grandparents can be very useful in all kinds of ways up to a very high age - live in nanny, some cooking and food prep, some cleaning, as a burglar alarm, dog walker, restraining influence on inexperienced parents, informal education of the kids and I don't know what else.
Of course, when old people get very old and very sick, then they themselves need looking after (currently by social services and hospitals at astronomic costs). In my view, post peak oil, the current (disgraceful) artificial prolongation of life at virtually all costs\, will not continue. Old people will be allowed to die when their body gives up and consequently life expectancy will reduce by several years (and more due to other factors)
So I see this as the new social contract between generations. It will be seen as the next generations responsibility to look after, feed and house their parents\, as is the case now in various third world societies. We may even see the introduction of a kind of 'alimony' payments by children that are unable or unwilling to do so.
Something to look forward to
But why do we need a pension at all? Look back 100 years and almost nobody had a pension as such. So how did they managed?
The answer is multi-generation households.
Feeding grandma and granddad actually adds very little to the cost of the food you buy. Similarly it costs little to house grandparents in the spare bedroom. It costs little more to transport them as part of the family, etc, etc.
On the contrary, grandparents can be very useful in all kinds of ways up to a very high age - live in nanny, some cooking and food prep, some cleaning, as a burglar alarm, dog walker, restraining influence on inexperienced parents, informal education of the kids and I don't know what else.
Of course, when old people get very old and very sick, then they themselves need looking after (currently by social services and hospitals at astronomic costs). In my view, post peak oil, the current (disgraceful) artificial prolongation of life at virtually all costs\, will not continue. Old people will be allowed to die when their body gives up and consequently life expectancy will reduce by several years (and more due to other factors)
So I see this as the new social contract between generations. It will be seen as the next generations responsibility to look after, feed and house their parents\, as is the case now in various third world societies. We may even see the introduction of a kind of 'alimony' payments by children that are unable or unwilling to do so.
Something to look forward to
As Paul says, it was the family who looked after the older members in days gone by and it was by having large families that this could be achieved without a pensions system. It is very interesting therefore to see in another discussion group (Post-peak manifesto), that many people are suggesting that we should limit the number of children in a family to reduce the burden that having more people will place on the system in the coming years. It raises the question then of who will suffer the most as matters get worse - people with a few children or people with no children? It also raises the issue that many familes will have to 'die off' if the UK is to reduce its population to a more sustainable level.
By the way, I now pay nothing into my personal pension and I have two children who I hope will be able to look after me a bit when I get older.
By the way, I now pay nothing into my personal pension and I have two children who I hope will be able to look after me a bit when I get older.
Years ago, before I found out about Peak Oil I worked for a firm that specialised in pensions, I was young at the time and asked them for some honest advice - they all said don't get a regular pension they are all a racket"".
They did not have one themelsves despite building carears on selling them to other people...
I never had faith that a pension scheme would deliver on it's promises and thats before you factor in Peak Oil.
I'm sorry that nobicus's pension has not lived up to expectations but he's probably luckier than many - the income he will get from it will at least give him something back on all thoses years of payment.
How many people will pay in to schemes for decades and get ZERO back from them? This has happened to some people already.
When you look at where all the pension fund money goes what it is used for you know it's a huge risk anyway regardless of PO
They did not have one themelsves despite building carears on selling them to other people...
I never had faith that a pension scheme would deliver on it's promises and thats before you factor in Peak Oil.
I'm sorry that nobicus's pension has not lived up to expectations but he's probably luckier than many - the income he will get from it will at least give him something back on all thoses years of payment.
How many people will pay in to schemes for decades and get ZERO back from them? This has happened to some people already.
When you look at where all the pension fund money goes what it is used for you know it's a huge risk anyway regardless of PO
Due to a rise in the market and the fact that I didn't start my pension until this year I actually achieved just over ?9,000 a year. I also agree about looking after older family members. My mother-in-law (now 89) has lived with us for 23 years. When she came to us it was reckoned that she had about 6 months to live! There have been some tensions but these were over in less than 48 hours and in general my wife, particularly, is pleased to know that her mother has no worries and can live out her life in comfort and happiness until she dies. I only hope that she goes before Peak Oil bites very hard. The thought of having to create a life and take care of a nonagenarian as well sometimes causes me some concern."
As for the large/small family debate, I think I have found the optimum
solution - adopt someone else's kids! Of course they are too young
at present to realise that they are my back-up pension scheme
I anticipate looking after one of my parents in the near future.I feel for nobicus. I grew up in a family with one, and for a while,
two very old grandparents, and it was a big burden on my mother
to cope with them and three children, one disabled. It also cramped my
style as a teenager!
As for the large/small family debate, I think I have found the optimum
solution - adopt someone else's kids! Of course they are too young
at present to realise that they are my back-up pension scheme
i started a pension at 18 (now 36) with equitable life. I too was fortunate to have a employer who contributed to this.
As we all know, the shenanigans surrounding EL a few years ago have decimated what I have invested. There has been practically zero growth, I get shafted if I take my money out and I get shafted if I leave it in.
At first I decided to leave it there but having come across Peak Oil recently I am now wondering whether even that is such a good idea. If there is turmoil in the markets and some of these investments go down the pan am I to suffer even further losses ?
As we all know, the shenanigans surrounding EL a few years ago have decimated what I have invested. There has been practically zero growth, I get shafted if I take my money out and I get shafted if I leave it in.
At first I decided to leave it there but having come across Peak Oil recently I am now wondering whether even that is such a good idea. If there is turmoil in the markets and some of these investments go down the pan am I to suffer even further losses ?
You will, as will most others.
But there is a way round it: SSAP or SIPS
Small Self-Administered Pension Scheme or Self Invested Pension Scheme
(the firs is if you are self-employed/ company run, the second is for employees)
You can transfer any and all your existing pension schemes (except protected rights = SERPS), including the amounts paid in by your employer, put all the transferable value into one of these schemes and then invest them where YOU want to.
You can invest in agricultural land, which you then rent to local farmers at 100-150 per acre, or buy some woodland and just sit on it - when PO strikes, any productive land should either increase in value or at least retain its value in comparison to investment in houses or similar.
Maybe you are brave enough to invest in oil company shares or even in oil futures!
You can even use the money to finance your own new company (I believe, not too sure about this one)
Or just buy some bullion and hide under your bed. Gold, metals and minerals are all probably going to go up post PO.
But there is a way round it: SSAP or SIPS
Small Self-Administered Pension Scheme or Self Invested Pension Scheme
(the firs is if you are self-employed/ company run, the second is for employees)
You can transfer any and all your existing pension schemes (except protected rights = SERPS), including the amounts paid in by your employer, put all the transferable value into one of these schemes and then invest them where YOU want to.
You can invest in agricultural land, which you then rent to local farmers at 100-150 per acre, or buy some woodland and just sit on it - when PO strikes, any productive land should either increase in value or at least retain its value in comparison to investment in houses or similar.
Maybe you are brave enough to invest in oil company shares or even in oil futures!
You can even use the money to finance your own new company (I believe, not too sure about this one)
Or just buy some bullion and hide under your bed. Gold, metals and minerals are all probably going to go up post PO.
With my peak oil hat on I would say get out now, if that is possible.
However, if it is a UK pension you can't get out, only transfer the
money to another stock market based pension scheme, which will be
equally doomed, in which case you may as well leave the money
where it is. My wife is in the same boat. I transferred my pension
to an 'ethical' fund, which may or may not perform better. It might
be worth searching for a pension fund which specialises in more
sustainable development, or renewable energy, or somesuch.
If you find one, perhaps you could post details here!
In general, if you can, get out of debt, using any shares or long
term investments to do it. I am beginning to wonder if I should cash
in my endowment policy in the near future - It will never make the
money originally promised, and could well tank completely in the
next few years. Fortunately I do not need the money for a mortgage
any more.
Of course, if you take this advise, it is completely on your own head.
We are afterall a bunch of wacko doom merchants
However, if it is a UK pension you can't get out, only transfer the
money to another stock market based pension scheme, which will be
equally doomed, in which case you may as well leave the money
where it is. My wife is in the same boat. I transferred my pension
to an 'ethical' fund, which may or may not perform better. It might
be worth searching for a pension fund which specialises in more
sustainable development, or renewable energy, or somesuch.
If you find one, perhaps you could post details here!
In general, if you can, get out of debt, using any shares or long
term investments to do it. I am beginning to wonder if I should cash
in my endowment policy in the near future - It will never make the
money originally promised, and could well tank completely in the
next few years. Fortunately I do not need the money for a mortgage
any more.
Of course, if you take this advise, it is completely on your own head.
We are afterall a bunch of wacko doom merchants
My personal view is that gold/silver/platinum will also be worthless PO. You can't eat it or use it to make things with. Nor can you defend yourself with it. Those that believe in the worth of gold may well increase their desire to have yours in which case they will try to take it. Best buy yourself some skills. How about a weeks self sufficiency course at CAT. How about a short wave radio? You will be able to talk to the world even PO 'cos the batteries won't take much charging. How about a lap top and all the worlds books on DVD? Again batteries can be kept topped up for a few months/years. How about a mobile phone and a wind up charger (you did know that they make wind up chargers didn't you?). The satellites will stay up on automatic pilot for some years to come and provided the ground stations are kept going the phones will work. How about a 12 volt windmill system? How about a solar cell system? All might be much more use than gold and silver bars. Buy yourself a wood. Much more useful for making things than the equivilant value in platinum bars. Think on!!
While I agree that gold is of limited practical use, it has remained a good store of wealth for something like 5000 years. If rich americans see their dollars becoming worthless they are likely to rush to buy gold to protect their wealth. I'm planning on keeping at least a bit of gold in BullionVault. That way brinks will be defending it for me and if the collapse isn't quite as sudden/complete as some people fear I may come out the otherside able to buy up land at bargain prices.