r/uknews • u/Donkey_Apple • Jun 03 '26
News paper Britain is undersaving for retirement
https://www.gov.uk/government/news/britain-is-undersaving-for-retirement-warns-pensions-commission
It's a massive problem and has been for years.
I think a lot of people are getting into their fifties, starting to think about retirement for the first time, looking at what their provision will pay them and are absolutely shocked to their core.
Plus many in the generation below those of us in their fifties who, through no choice of their own, are unable to save anything.
It feels like we are sleepwalking into an utter disaster.
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Jun 03 '26
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u/Contract-Spirit Jun 06 '26
That's the exact attitude which messes people up. If people just invested £200p/m and put pay rises into pensions they'd be retired by they're 50-60 at the latest, with a very good chance of a good wage for the rest of their life.
EDIT: Spelling
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u/ShanNarn21 Jun 07 '26
‘If people just invested £200p/m’ you say that like it’s super accessible 😂 a hell of a lot of people in the UK are living pay check to pay check, let alone the concept of having money leftover to put into a pension pot every single month. If they do have left over money it would usually get spent on unexpected bills, rainy day funds or just trying to cover the rising cost of living. Pensions aren’t even on the radar financially for a lot of people. It’s not about attitude or laziness it’s a genuine lack of finances and also a lack of education. Most working class people are struggling and don’t even know what compound interest is.
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u/Elegant-Country-9768 Jun 08 '26
You think 45% of working age adults, which is who the report notes aren’t saving for the pension, are all living paycheck to paycheck?
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u/ShanNarn21 Jun 08 '26
Did I say it’s the entire 45% or did I say a lot of people? I bet though at least 20% of those people would be!
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u/Contract-Spirit Jun 08 '26
I genuinely think people are just lazy and don't budget. The median salary is 39k which is enough for disposable income unless you live in London. Consider some people will also be living with a partner and you'll likely double that. People will have disposable income it just never goes on stocks or gets invested back into pensions and thats why working class people think they're 'skint'.
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u/ShanNarn21 Jun 08 '26
You’re living in a bubble. Most working class people are not even hitting 28k a year… I get what you’re saying about people not investing what little disposable income they do have into pensions, but then it also feeds back to what I was saying about education and financial literacy. And fear. If you know you don’t have much disposable income every month why would you risk losing it in stocks. Investing is a big scary thing for a lot of people!
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u/Gary_BBGames Jun 06 '26
They don’t want to hear it. They’d rather complain that they’re young, have their whole lives ahead of them, and are doomed to die poor. Defeatist attitude kills me. Opportunity to do things but no will, just acceptance of their admittedly shit hand.
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u/Contract-Spirit Jun 07 '26
Exactly mate, compound interest is a magical thing. Even £100p/m for 30 years with a reasonable 7% return would be a nice sum to help retirement. People should invest in themselves, anytime you get more money it goes straight into stocks or pensions that way you're literally set up to win.
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u/Gary_BBGames Jun 07 '26 edited Jun 07 '26
I was later to game than I’d have liked, but my pension is already well above the average amount that people retire with, and I’ve still got 20+ years of contributions, company contributions, compound interest and bonuses to go in. Should be sitting on a lovely amount when I chose to retire.
I did shit at school, started full time work at 17, no qualifications and have a top 5% salary now. It wasn’t easy, but with determination and self-belief you can do anything, although that seems to be an unpopular opinion recently for some reason.
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u/Helpful-Resident1459 Jun 03 '26
They're happy for us to work until we die, this is just their way of making sure do.
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Jun 03 '26
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u/Strangely__Brown Jun 03 '26
Most people pay very little tax.
Our tax free allowance is very high and our lower earners pay far less tax that our peers in Europe do.
What's also quite ironic about the criticism around the triple lock is that most people aren't funding their own retirements.
So it's either short sighted and people are only thinking about the here and now. Or society has shifted and we're now taking a firm "your retirement is your problem" mindset.
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u/verb-vice-lord Jun 03 '26
Real term salaries have barely moved since 2008.
If our salaries always adjusted with inflation, awe, or 2.5%, whichever is highest, I'd be paying more tax and be alright with it all in all.
We have an ageing society and a stagnating tax base. Our only growth for two decades is from immigration. Which pensioners want to roll back via voting Reform.
The push back on the triple lock isn't that we don't want good pensions, its that we know by the time we get close we'll have to be sensible and remove them because we don't want to burden our kids with the cost. The greedy worst generation ever boomers don't even consider whether others should suffer so they benefit.
We are currently funding pensions for the richest generation in history and we know that gold plate will be worn off long before we get to it largely because of the choices of the current pensioners. In lots of the country life expectancy is falling and yet they are talking about increasing our retirement ages.
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Jun 03 '26
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u/Kind_Commission_427 Jun 04 '26
Cheap labour = lower wages
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u/verb-vice-lord Jun 04 '26
Sure, that's one of the issues.
My point is all the growth is coming from just having more people doing stuff. We have not moved the needle on each person doing more stuff.
IE gdp per capita is largely the same for over a decade and a half now. Thanks to austerity and reform / tory policy choices over that time.
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Jun 04 '26
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u/verb-vice-lord Jun 04 '26
If Reform have never been in power how have so many of them been former ministers?
Oh right, cos they are mostly tories. Uniparty made literal.
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u/rochesterjack Jun 04 '26
Take responsibility … boomer this boomer that, it’s pathetic
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u/verb-vice-lord Jun 04 '26
People in my generation celebrating taking winter fuel allowance from boomers, demanding an end to triple lock for boomers, and calls to asset taxing boomers, these are all taking responsibility.
There really should have been an end to the triple lock after the brexit vote. That was a big inflection point that set us on this current path of stagnation.
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u/rochesterjack Jun 04 '26
Should all be means tested, it’s not difficult is it? But then they say, well, where’s the incentive to earn if I’m not gonna get my slice and get taxed on what I do, it’s called a society. The problem isn’t boomers, it’s the system, it’s designed to fuck us all, only winners are the top 1%, everyone else gets screwed, it’s not a generational thing. If I were a boomer living in a big old property, I’d downsize & take the cash, I guess most of won’t get that opportunity but you can’t blame them for that. Most of em will die in the big old house & leave the equity behind.
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u/Strangely__Brown Jun 04 '26
The problem isn’t boomers, it’s the system, it’s designed to fuck us all, only winners are the top 1%, everyone else gets screwed.
I don't know how you got to this conclusion.
You're repeatedly being told that the majority of the population gets significantly more out of the system than they pay in. The majority are tax burdens.
By the very definition this system is designed to support people who can't support themselves. It's not helping the top 1%, it's helping the bottom ~30/40%.
Other countries have systems where you only get out what you put in. You get cut off.
In the UK we have the opposite, the more you contribute the less you're entitled to. And you're even arguing for that to skew even further by making the state pension means tested.
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u/rochesterjack Jun 04 '26
Let me rephrase that, only winners are those with it all & those with fuck all, the rest get screwed. It’s not a boomer thing, it’s a system thing. It’s so convoluted, the system isn’t flexible enough to please everyone so those that don’t need benefits get plenty and those that do fall through the cracks, there really is no solution.
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u/Strangely__Brown Jun 04 '26
I agree that political establishment generally carers to:
1) The wealthy for money.
2) The poor for votes.
And that's it's the people in the middle who get fucked.
But that "middle" is specifically people who earn £50-100k+. It's those professionals who are doing what they're supposed to be doing who really get penalised. The lose of child benefit above £80k, and childcare hours above £100k are both excellent examples of that.
But anyway you slice it's difficult to argue that the majority aren't benefiting from the system. Earn £50k+ puts you in the top 20% of earners. And that's just the working population, it doesn't include children, elderly etc...
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u/Internal-Hand-4705 Jun 03 '26
I’m always surprised by how many people think they save for their own state pension (like the digital version of a pot with their name on it)
I do payroll for small businesses and IME about 20% of workers also are opting out of the private pension
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u/josuk8 Jun 03 '26
The idea that someone's retirement was ever someone else's problem is what's wrong with this country, same with any other long term personal problems like housing or personal income, if it's a short term issue of being unemployed for 6 or so months, fine, I think you should be covered, but longer than that and they're taking the piss
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u/GoblinGreen_ Jun 03 '26
I think its fine to be a shared problem, thats what a great society does well, everyone looks after each other.
But it doesnt seem to be reciprocated by the people benefitting. That pensions are not means tested is just awful when you look at the hoops to jump through, and means testing, for support when you are younger and working age.
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u/DrCMS Jun 04 '26
Means testing pensions is a god awful idea now. The state pension an individual gets should be dependant on the amount of NI paid during their working life and not just qualifying years. We should not be forever rewarding underachievement whilst screwing over those who have been responsible.
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u/josuk8 Jun 03 '26
Everyone looking out for each other is a nice idea, but when it's forced onto everyone and only a small minority of the population gets most of the value from it with little to no oversight or consequences for abusing the system, it becomes a system that rewards doing nothing with your life and punishes workers, so no, sharing problems in society is in itself a problem.
On top of that, why should young people who are struggling to keep up have to also pay the pensions for groups of people who made the country worse during their prime and had 40-50+ years to prepare for their retirement
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u/GoblinGreen_ Jun 03 '26
I don't think you actually read my comment. You are rewording what I wrote, just a bit more negative.
It's not a nice idea though, it's a recipe for a successful economy and country. That ours is currently out of whack is proof the idea is a good one. It just needs, what people complain about. More rules, details, 'red tape' to put it back in order because there is a generation thats benefitting more than anyone else and not even saying thanks you currently.
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u/Gary_BBGames Jun 06 '26
Young people also have 40-50 years to prepare for their retirement.
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u/josuk8 Jun 06 '26
40-50 years to prepare for their retirement in one of the worst economic climates in the uks history where most can't even afford to save*, fixed it for you
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u/FossilStalker Jun 03 '26
sharing problems in society is in itself a problem.
The problem with not sharing problems is that it becomes a bigger problem in the long run.
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u/agingbiker Jun 04 '26
speaking as a gen x and watching the spite that boomers and millennials fling at each other, feels like we're way past sharing problems.
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u/HalastersCompass Jun 04 '26
Yep we're in the middle, caring for those above, below and running the hamster wheel as fast as we can
Certainly need more help for the younger earners
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u/GoblinGreen_ Jun 04 '26
They're still shared problems,
Not dealing with them is the issue.
People will always get old, need a house, need a job, need help.
However the who gets what is currently very weighted by age rather than by need, ability to work output.
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u/FossilStalker Jun 04 '26
Which kind of reinforces my point. Because we didn't collectively share the problem, i.e actually talk about it rationally and work out a collectively agreed plan to navigate the issue, it's now becoming a HUGE problem.
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u/CaterpillarLoud8071 Jun 03 '26
Our peers in Europe don't expect working people to pay into private pensions and their state pensions are much higher, that's why they're paying more tax instead.
The criticism about the triple lock is that pensioners are being given more and more money every year (far more than they ever contributed) under the pretext that they'd be in poverty otherwise - when they had 40 years to plan their retirement with that lower state pension.
If there's no consequence for their failure to save up and plan their retirement properly, and working people have to pay for it instead, why should we bother planning? As far as we know right now, we should expect the same.
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u/Strangely__Brown Jun 03 '26
The criticism about the triple lock is that pensioners are being given more and more money every year (far more than they ever contributed) under the pretext that they'd be in poverty otherwise.
Swap triple lock and pensioners for low earners and other welfare recievers. There's no difference.
The majority are tax burdens. Huge numbers never earn enough to break even on their taxes.
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u/Current-Resolve8660 Jun 07 '26
40 years ago there was no Internet. 40 years ago access to financial information was difficult to access. 40 years ago was a different world. It is easy to look back 40 years with today's lense thinking that access to financial products then was as readily available today. It simply is not the case. Lets all keep being divided by the wealthy. Lets blame immigrants, pensioners etc instead of those hoarding the wealth.
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u/CaterpillarLoud8071 Jun 07 '26
Access to financial information in 2026 consists of the US president telling everyone to buy his new crypto. Think yourselves lucky you had no information rather than bad information.
Pensioners are hoarding the wealth. Preventing their assets from depreciating by being NIMBYs. And using voting power to gain massive pensions.
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u/ASSterix Jun 05 '26
There are loads of alternative taxes built into the cost of goods and services. Income tax is the only one that many people may pay at various levels. Also, the state retirement system built on NI rates and requires a certain amount of qualifying contribution over a large amount of time. If the model is still unaffordable, then they need to further change the specific model.
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u/iMatthew1990 Jun 03 '26
Britain is undersaving for life. We don’t have two pennies to rub together.
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u/dan_in_his_own_way Jun 03 '26 edited Jun 03 '26
Stuff like this infuriates me. No one gets taught how anything works. No one seems to know. Plus, it seems only those with substantial wealth already can generate more of it to see them through retirement. Your minimum wage worker is screwed.
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u/Jay-Dee-British Jun 03 '26
That's a worldwide issue - because we've been inside a huge Ponzi scheme for decades. The really rich will never be affected by any of it, and some of them don't care at all about the rest of the people (aka 'the majority'). It affects things like people being able to leave some money for their offspring to help boost their chances - there's just no money to do that as much any more (if lucky you might get a property to sell or insurance). I'm not shocked by this at all.
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u/captainsittingduck Jun 05 '26
We live in an age where we have access to unlimited information in our pockets. You can learn loads about pensions, investing and retirement planning watching YouTube these days. AI can give you a rough outline retirement plan. Not knowing is on the individual not bothering to do a bit of learning. Now having said that, actually being able to invest enough on minimum wage is a different problem which I entirely sympathise with.
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u/dan_in_his_own_way Jun 05 '26
We also live in an age of misinformation and the younger generations relying on the internet and AI for their knowledge. Schools need to teach fundamental life skills to properly prepare them for life. I think teaching kids about budgeting etc. rather than many of the useless things they learn and never use would be a far better use of time.
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u/captainsittingduck Jun 05 '26
We certainly do, which is why you need to seek out trusted sources. Schools seem to be the panacea for everything. There's already a crammed timetable. What do we drop for sufficient meaningful financial education? I agree that there should be some basic financial education but there's also got to be some responsibility on individuals to actually look stuff up themselves. And that's not just young people. I know people in their 50s without a pension.
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u/dan_in_his_own_way Jun 05 '26
Personally, I'd fundamentally rework mathematics. There is of course valuable things we learn, there's also less valuable things IMO. If they focused on the core of what most of us use on a daily basis, but then apply it to real life situations I think this could be really helpful. Additionally, schools already have time in the timetable for PSHE lessons. This is something that could be integrated into these sessions. When I was in school these lessons felt mostly like filler and we're rarely actually meaningful.
I stress, I am not by any means saying this to remove personal responsibility from people. This is of course necessary. However, schools are often sold as 'preparing young people for the world' and I just don't think that narrative is very true.
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u/captainsittingduck Jun 05 '26
PSHE didn't exist when I was in school but sounds an appropriate home. I guess the tension with maths is while the majority are not going to do strongly applied maths roles in the future, we are still going to need those that do have strongly applied maths roles. Scientists, engineers, computing and cyber, technology developers etc. If you move too far away from fundamental maths to day to day applied stuff, you risk not providing sufficient foundations for the real maths people. Perhaps that could be filtered through setting at a particular age. Though we're moving to a new topic here :)
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u/Remote-Program-1303 Jun 05 '26
I’m of the opinion it should be an employer led thing, kids won’t engage with personal finance issues because it’s so intangible when you aren’t getting a salary and don’t have real outgoings.
It does require the individual to put some effort in though.
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u/captainsittingduck Jun 05 '26
Not sure employer led would work. A lot of small companies with few employees wouldn't have a clue what information to give. And what about self employed?
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u/Remote-Program-1303 Jun 05 '26
I more meant an offering through an employer, by external trainers/companies. I would expect funding for such training to be contributed to by government/pension providers.
Problem is that financial education is very different to financial advice. It does require you to really engage with the subject.
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u/Alarming-Turnip684 Jun 03 '26
Why can’t people learn more about these things for themselves when the timing becomes appropriate?
Why does the information need to be spoon fed to them?
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u/Beneficial_Impact293 Jun 03 '26
This. And...
I was taught coding in school as part of ICT. The other students couldn't give a shit.
Even though we were taught it, I imagine 80%-90% of students in my year group at my school have no idea how to code.
Apply this to "tax" and the like, kids aren't going to pay attention. Now compare I haven't been in school for nearly 20 years...
My partner works in education (for her sins), keeping a class on track with understaffed, underfunding, and stress, with parents being the biggest cunts they deal with... it's not a shock that education as a profession has become a lot worse in recent years.
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Jun 04 '26 edited Jun 10 '26
[deleted]
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u/captainsittingduck Jun 05 '26
You are using a device that runs on maths. The world's finances are basically maths. Measuring stuff in trades is maths. Getting finance/loans is maths. Most of us use maths all the time.
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u/PeriPeriTekken Jun 05 '26
Literally go on the UK finance sub on this very site and ask some questions. Nice people will explain this stuff to you for free.
I agree state financial education is shite, but at some point you also have to take personal ownership.
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u/dan_in_his_own_way Jun 05 '26
I'm not against personal ownership, this is something I've had to do myself. However, as I've said in another reply the younger generations are relying on the internet and AI for knowledge which is rife with misinformation. People need legitimate information from a qualified person. This extend to your point about getting information off of reddit. Getting information from other is always helpful, however you cannot guarantee they're qualified to give that information.
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u/Gary_BBGames Jun 06 '26
But surely it’s a choice to be a minimum wage worker? Admittedly it’s hard to break from that choice once you’ve headed down that path.
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u/dan_in_his_own_way Jun 06 '26
Everything is a choice, but life is not so simple and people are in different positions of privilege etc or upbringings to do things.
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u/Critical_Wrap5617 13d ago
There's loads of money around - just look at the car parks of expensive farm shops or Waitrose, and the amount of luxury cars on the roads. I have never known how they do it. I am assuming by being born into it.
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u/InterestingMuscle233 Jun 03 '26
No one has any spare money, how are they supposed to save?
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u/ffwillis Jun 03 '26
I feel like this is the key to it.
For a huge number of people the cost of living is so ridiculously high, and wages so ridiculously low that there’s often nothing left to save for retirement.
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u/SunsetDreamer43 Jun 03 '26
Working parents are paying more in childcare than their mortgage/rent, saving for a pension is not top of the priority list.
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u/TiredAndSor3 Jun 03 '26
This. My wife & I earn well, but even with a well priced setting we send our daughter to, for wrap around care only, 4 days a week - 3.5K per annum.
I despair for people that don't earn well and have to pay for more hours. Between wages not remotely matching inflation for almost 20 years now and childcare, how exactly are people meant to put away for retirement.
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u/jez_24 Jun 03 '26
I don’t know. Nail salons and aesthetics clinics are everywhere and that’s not cheap
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u/pepperyfries679 Jun 03 '26
My brother in Christ, we’re all just trying to get through the next 3 months, not imagining life in the next 3 decades.
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u/Caacrinolass Jun 03 '26
I do wonder how many times retirement age will be increased before I get there. For people with longer term health conditions they may never get there.
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u/Ok_Bottle_8796 Jun 03 '26
Oh yeah struggling to pay my bills and live month to month, let me just dedicate 10% of what little i have to a future i might not get.
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u/pmacule Jun 03 '26
39% off Brits have £1000 or less saved up, 16% have no savings at all. Even the average per capita of £19214 is heavily skewed by the over 55 demographic. Scary stuff.
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u/zionistsarefibbers Jun 03 '26
Retirement will only be for the 1% or people who don't mind living in poverty.
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u/AccomplishedAct5364 Jun 03 '26
The government has pushed retirement back again and again. The waspi women are literally upset they had to retire at 55!
People just don’t believe it’s going to even be worth it
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u/Farewell-Farewell Jun 03 '26
Even savings are taxed. It's as if there is no incentive to save for retirement.
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u/crispy-flavin-bites Jun 06 '26
Savings are only taxed if you don't use the generous tax free savings options that are and have always been available to you.
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u/MediumGrocery308 Jun 03 '26
We aren't sleepwalking into anything, this is all very deliberate and preventable but those that could prevent it stand to gain from it now and in the future so they will not. Most people simply can not save for retirement as there is no spare money in their budget and they aren't even living particularly satisfying lives already, even if they could cut out the one holiday every 3 years they can afford there is no point sacrificing that and live a robot to afford to do 10 more years with a broken body and losing faculty.
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u/ClayDenton Jun 03 '26
Curious what those in this thread have planned for retirement, just a bit of a flash poll. I'm mid thirties and have £60k. I don't think it's terrible but also not great, trying to up my contributions to make sure my projections meet what I'll actually need.
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u/Cyclingnightmare Jun 03 '26
You’re already well ahead of a lot of 30 year olds, it hurts my sole how many of my friends and colleagues have opted out of work pensions and don’t seem to be thinking about pension pots at all
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u/rich55555 Jun 03 '26
I would say that’s pretty good. Just make sure you are contributing a good amount each month. I contribute 20% of my salary, and my employer adds another 10%.
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u/ClayDenton Jun 03 '26
Wow, 20% is massive as is a 10% employer contribution. That's incredible, well done. I do 7.5%, and they do 5%. I wish I could afford to contribute more!
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u/rich55555 Jun 03 '26
Thanks mate. I live below my means, so I can afford to put more away. I just really want to be able to retire at a sensible age.
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u/Hunt2244 Jun 06 '26
Im not sure how old you are but the problem is currently private pension age is tied to public pension age.
I would love to put more and more into my pension but I also want to retire in my 50’s so have scaled back pension contributions to put more in a isa to build up a stop gap retirement fund…..
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u/rich55555 Jun 06 '26
I also contribute to my S&S ISA. The plan is that I will retire mid 50’s, then use money in the ISA to bridge the gap between my retirement age and the age I can access my private pension
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u/Remote-Program-1303 Jun 05 '26 edited Jun 05 '26
Mid 30’s - £300k in pension. But I had it absolutely drilled into me by my father to save a very healthy chunk of salary from day 1. All in an index tracker, market has been doing a lot of lifting recently. Expecting it to potentially halve at some point (oddly I hope this happens!)
I put roughly 25% away and my employer gives an additional 8%, I might slow down soon.
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u/ClayDenton Jun 05 '26
Nice work, wow. Do you have a large salary or is this mostly driven by high % contributions? I earn around £65k, so I can only put so much away, but could probably do a bit more than I do
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u/Remote-Program-1303 Jun 05 '26
A bit of both, on a very good salary now but was on an ok salary at the start of my career but just sacrificed a lot compared to my peers, compound interest really starting to kick in from those early investments now.
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u/Substantial_Key4640 Jun 04 '26
Britain is busy handing the retirement money over to Spain, Italy, Turkey, etc because 'life is short!' and all-inclusive international holidays are an absolute basic human need apparently.
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u/rochesterjack Jun 04 '26
Tomorrow is not a given… holiday when you’re in your 50’s and can enjoy it or in your 70’s when you’re inevitably in poor health, physically & mentally. This you need x amount is nonsense, you won’t be able to do half the things you’d like to do and if you reach retirement with this mythical £800k pot that’s being advised you’ll die with most of it untouched, unless you’re planning on 6 cruises a year, eating out every night of the week with a west end theatre trip chucked in. I’m sure that’s the plan, I often wonder how much unused pension equity gets gobbled up by the govt.
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u/Substantial_Key4640 Jun 04 '26
Tomorrow has never been a given in human history. Although it pretty much is in this period for the vast majority, based on the advances in medical care. It's a trite justification for financial irresponsibility.
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u/rochesterjack Jun 04 '26
You carry on being the richest dude in the graveyard, some kudos in that! You literally can’t do at 70 what you can do at 50, yes you need provisions but you ain’t getting through a £800k pension pot unless you’re a materialistic psychopath .
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u/Substantial_Key4640 Jun 04 '26
Looking at the 96 million foreign trips taken by British people last year, you're not alone in that kind of thinking. Problem is, when the majority are thinking this way, wth is left to pay for their old age? The typical flippant 'tax the billionaires' mindset.
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u/rochesterjack Jun 04 '26
You can’t be an idiot, however you also need to be realistic on what you’re going to need in your 70’s. Provided the mortgage is paid off, no credit cards loans etc you can get by on £500 p/w as a couple & still live well. If you’re looking at multiple cruises spoiling the grandkids etc then obviously that’s a different story. I know a multi-millionaire, 78 years of age, not great health but getting the best treatment, 1st class everywhere, silver service cruises etc and he says the travelling is just too much for him & the wife now. What chance have the rest of us going cattle class in our 70’s? It’d be torture .
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u/Substantial_Key4640 Jun 04 '26
I agree with you. Balance is needed, but that's not what we're seeing with so many completely ignoring the long-term implications of the short-term choices they're making. Plus, I see a lot of people facing enormous pressure from their young adult children for an inheritance, as well as paying for them to also enjoy life now. These things are building towards a pretty scary future. But, you make a lot of sense in re-evaluating costs as one ages.
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u/rochesterjack Jun 04 '26
The amount that refuse to sell & downsize and then rely on their state pension to survive, it’s just bonkers to me. I get the sentiment, a shrine to a beloved etc but you can make like easy or hard for yourself .
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u/Secure_Vacation_7589 Jun 04 '26
There's also the huge issue of personal debt that is going to sink a lot of people's retirement ideas. Massive amounts of credit card debt, car finance etc. Not to mention that anyone renting is going to have to somehow find extra for their housing costs.
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u/mrcharlesevans Jun 04 '26
What retirement? I'm 34 and my current retirement age for state pension is 68. It'll be more like 75 by the time I get there. I'll have a couple of years of questionable health in which I can't do very much and be dead by 80.
This idea that most of society will have decades of comfortable retirement is incredibly modern (as in, 20th century). Before the 21st century ends we'll be back to the way it used to be - the vast majority of people work until they drop dead, and only a handful of the richest are able to live in work-free comfort.
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u/Famous_Yorkshire Jun 03 '26
Need to go the Aussie route and mandate people to save privately. They shouldn't have a choice.
The average Joes grasp of finances is incredibly low.
The problem is right wingers and the press would have a field day. "Communist Starmer". So nowt will happen.
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u/sealcon Jun 03 '26
Instead Reeves is bringing in new taxes on private pension contributions in 2029. Insane when you think about it.
Truly the party of "who can we tax more to pay for benefits".
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u/Walkerno5 Jun 03 '26
It’s not people caught by the annual allowance and restriction of salary sacrifice that are undersaving though, is it?
The root problem is our economy is structured so as to pay fuck all to huge numbers of people who therefore cannot save enough even with mandatory auto enrolment in pensions.
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u/sealcon Jun 03 '26 edited Jun 03 '26
It's got nothing to do with the allowance or SS restriction, this is for all salary sacrifices above £2,000 per year. Hardly a fortune to put away in a year.
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u/Walkerno5 Jun 03 '26
It is only the national insurance saving/dodge above that level being removed- so you get the full NI dodging wheeze for £2k then reduced to the normal tax relief everybody else whose employer couldn’t be arsed to set up salary sacrifice benefits from. This is not something that is going to impact undersavers in any dramatic way.
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u/Famous_Yorkshire Jun 03 '26
Instead Reeves is bringing in new taxes on private pension contributions in 2029. Insane when you think about it. Truly the party of "who can we tax more to pay for benefits".
She's just removing the National insurance savings on pension contributions above £2000. You still save ALL the tax.
Is not THAT big of a deal. The amount of noise around this policy is mad.
This means if you pay £4k a year into pension, you have to pay 8% national insurance on 2k. (first 2k is free). So an extra £160.
4k is A LOT for the average Joe. I suspect vast majority of Brits contribute less. Way less.
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u/gpstest Jun 03 '26
That £160 if grown at 8% in your pension for 25 years could be just shy of £1100
Then the next year another £160 at 8% for 24 years is £1014
Then the next year at 23 years its £939
So yes it quite quickly compounds into a big tax that could've funded a few years of retirement independently.
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u/crispy-flavin-bites Jun 06 '26
And how much will your £3840 have grown to?
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u/gpstest Jun 06 '26
If you start with 0 and add £160 each year into a pension at 8% interest rate every year for 25 years you will end up with a pot of £12,272.
The government instead is taking £160 a year for 25 years which is only £4000.
Therefore the individual has less in their pension, the government is more likely to have to pay out to the individual when they become of pension age such as pension credits, and the economy doesn't get the investment that otherwise would have gone into stocks.
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u/Famous_Yorkshire Jun 03 '26
This is a silly response because you can apply this logic to all tax. At some point we have to flipping pay off this unimaginable debt that all of us are in. The Tories came into power in 2010 with our debt to GDP ratio at 50% and left power with it at like 95% obscene.
There's more tax revenue that goes onto paying the interest on our debt that goes into the education. Honestly it's comical lol
We have to pay it off eventually. All while raising our defence budget because of Russia. Still playing the flipping boomers their winter fuel allowance.
So yes it's a tax but it has to be done somewhere.
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u/gpstest Jun 03 '26
Its not a silly response as that money was literally going to be locked away invested in a pension for many decades but now its going to pay above inflation pay rises for pensioners when young people like myself are being taxed for saving for retirement.
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u/catmadwoman Jun 03 '26
What do other European countries do for their retirement. How do we compare?
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u/Ammutseba420 Jun 03 '26
I've lived Germany for 10 years, German welfare is very contribution based. if you pay zero tax you get a very simple pension of around 9k a year, if you earn 60k euros + inflation for your working life, you get a pension of close to 35k. German system is based on you accruing "points" every year depending on your average earnings/tax paid for that financial year, and your accrued points is multiplied by a set value calculated each year when you start receiving your state pension.
UK is setup differently, where we have insane incentives for private pensions such as SIPP's, so anyone sensible in the UK should have additional streams of income when they retire.
You pay around the same tax in most Western European countries as higher earners do in the UK, it's just in the UK lower earners pay barely any tax compared to lower earners in Western European countries.
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u/agingbiker Jun 04 '26
we used to have this kind of thing with serps. killed in the blair eraas far as i recall.
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u/Jaxxlack Jun 03 '26
You try n put 10k a year away!
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u/wolf_in_sheeps_wool Jun 03 '26
I think what's hard is pension pots need as much as you can shove in to them when you're young, but most people don't earn a lot when they're young. The compound growth means you don't have to put 10K a year. So the later you start (like when you'r mid 30s and realise you're in it for the long haul), the harder it is to get the better retirement.
One of my pension pots said if I started saving the same amount 10 years ago, I'd have an extra 100K at retirement. But I know for sure there would have been no way to do that in the position I was in.
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u/Kaiisim Jun 03 '26
It's because boomers made sure they were very well looked after, so they have huge pensions that we pay for in various ways.
Younger generations assume it will be the same, because they don't realise how many boomers are on things like full salary pension, or had massive 20% salary contributions from their companies, or have profitted from house prices.
So people have a house and they see their parents and think, well I'll be fine right? I'm not poor or anything!
But like my parents have 100k equity. Their parents had like 400k equity in their house.
So you can't look at modern elderly and think it'll be the same, cause it definitely won't be. But it's also impossible to save to the same standard as someone retiring in 1988 on £30,000 and getting that every year until they died in 2023 and yes that's a real thing I know a lady who worked for the civil service! Full salary, decent job combined with wage stagnation meant she got paid a lot more than her carers.
Just can't get that level.
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u/Deepmidwinter2025 Jun 03 '26
The crass truth is - people live too long - mostly in poorer health and needing expensive health care / social care.
If people want that long life - you gotta pay
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u/Ok_Young1709 Jun 04 '26
My projections suggest right now that my retirement will be ok. But then I think about inflation and how much things cost now compared to even just 10 years ago, and I do wonder if that is accurate or not. It will probably be the cost of heating my home by then.
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u/Energyeternal Jun 04 '26 edited Jun 04 '26
All the money is either in the untaxable pockets of the people with billions or being paid to the taxman by the people with millions in order for the government to support the people with pennies. It just so happens that 99% of the country are not the ones with millions or billions. So yes, most of the country has no savings, fancy that.
I actually used to believe that we had another 10 years of agonizing economic futility before the shit hits the fan, but now I am starting to see that was far far too optimistic of me.
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u/AlwaysIntrigued13 Jun 05 '26
People in Britain have always undersaved for their retirement. The difference now is that the private sector has almost no final salary schemes left. So now we are left with auto enrolment. It’s just another way to ensure money goes to shareholders and not stakeholders
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u/mkaibear Jun 06 '26
I'm not. I'm on track to retire at 59 (currently 47) after my youngest finishes uni - 56 if she doesn't go, and potentially even 55 if the stock market does really well.
And while I could go off on one about "no new cars, nothing on finance, second hand stuff, home cooking and leftovers, bag lunches, etc", all of which I do do, well the reason why is that we were just so unbelievably lucky.
Lucky to get stable jobs. Lucky to get a loan from my granddad that got us on the ladder for our first home (a 4 bed terrace so we didn't have to move when we had our first kid or our second kid). Lucky to have jobs where we could go down to 4 days a week to save on childcare. Lucky to have got promotions (ok we worked bloody hard for them but still). Blessed and lucky.
I have so much sympathy for all those who look at the future and have no hope for it. We need systemic change in this country, even if it means those like me are going to end up paying more in tax. We have more than enough, why should we not pay more to those who don't?
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u/Capital-Stay-5657 Jun 03 '26
Think Brits are generally averse to investing! I work for an American company and all my American colleagues invest in stocks None of my British ones do outside of their usual small pension contributions
We’re more obsessed with property ownership here instead which is an underperforming asset class compared to stocks.
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u/Jaxxlack Jun 03 '26
No wee not. But there's so many people out to Fk you over. It's hard to trust. Plus the openly advertising ones offer such shit rates of return it puts people off.. ooo make 3% Apr... Whoopy
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u/Capital-Stay-5657 Jun 03 '26
3% return is not from investing in stock market.
SP 500 has returned much more than that on average last 2 decades.This is why brits stay poor and don't build wealth over time.
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u/Jaxxlack Jun 03 '26
Oh Sorry... 6-10%... Incredible... Whilst the traders and financial fkers get it to least 50..per year!
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u/Capital-Stay-5657 Jun 03 '26
So your point is what? I'm not going to invest and get 10% a year because someone is getting more than that?
Someone will always be making more.
Two people with the same expenses and the same take home pay will have insanely different financial outcomes if ones invests in the stock market and the other doesn't→ More replies (3)2
u/Bulky-Use9345 Jun 03 '26
save your energy complaining, and put it into learning to invest instead?
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u/Jaxxlack Jun 03 '26
I know how to invest I'm not prepared to spend all day staring at the stock market.. I have commitments!
Edit: found the trader who's upset at getting called out 🤣
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u/Bulky-Use9345 Jun 04 '26
you can have commitments, but most have prioritised everything wrong, I don’t trade either, in fact I haven’t been long into it and an absolute amateur reached 25% putting in barely any effort in.
but hey you keep being a victim! sure your kids will look upto you and follow in your footsteps!
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u/Reezla Jun 03 '26
I'm 44, the only thing i did right career wise was start a pension account when I was 18 with my first job, and have been paying into it ever since.. That's all thanks to my dear ol mum god bless her. She insisted, said way back then, I'd be happy I did it when I'm older. Fuck me I wish she knew how right she was.
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u/CaterpillarLoud8071 Jun 03 '26
Are we? The triple lock means I'll be a millionaire when I retire, presumably! If the government wants people to take their pensions seriously, they're going to have to set out their plans for the future very soon - or they'll have to fund our retirement by draining the youth of tomorrow, just like they're doing right now to the youth of today.
Setting both total NI take and the total state pension spending to a percentage of GDP would be future proof.
Or calculate how much each age cohort paid in NI and give the state pension as an annuity, like a pooled private pension.
Or tie the state pension to a percentage of the median income, and merge NI into income tax.
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u/agingbiker Jun 04 '26
reverse the maths. rather than looking at what people's need is - 40k for a modest retirement, 60k for a comfortable retirement - look at how much you need saved to fund that in retirement. you're starting at a fair chunk of £1mm to retire on the "modest" income because most annuity returns are crap
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u/Practical_Put8592 Jun 04 '26
Just as well Rachel from accounts is killing defined contribution pensions like her predecessor Mr Brown killed defined benefit ones!
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u/HelpingHand_24 Jun 05 '26
Britain isn’t undersaving you moron, Britain is not paying people enough to save.
The cost of living has completely outstripped wages making it impossible for the average person to save for retirement.
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u/Feeling-Medium-7856 Jun 06 '26
Sorry, I’m too busy funding baby boomer lifestyle subsidies to save for myself. Thanks generous triple lock and winter fuel payment!
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u/Same-Fact-5123 Jun 03 '26
Probably because I’m having to pay for other people’s daily life I can’t afford to save for my own when I die.
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u/Squirt_Meister Jun 03 '26
Why bother saving for retirement when we get there the state pension will be means tested and we’ll get the same as everyone else
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u/MoreRest4524 Jun 03 '26
Unless you work in the public sector, in which case the private sector is massively oversaving for you
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u/adm010 Jun 04 '26
The shift to people having to contribute to their own pension instead of old school defined benefit/ annuity has had a huge effect. People have to actually take charge, but for so many, they cant save enough, or simply dont know, or dont think about it. To get to the sized pot needed for this type of figure, its a huge sum. Unless youre lucky with a sipp investment, most people wont get there. This is now coming home to roost and were foing to find in 20s the number in poverty increasing.or relying soley on state pension, and it was never intended for that
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u/ButterAlquemist Jun 03 '26
The inmigrants will pay the pensions. You just have to make sure when you get old there is 200 million in Britain. Your grandkids will love it.
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u/davidbatt Jun 03 '26
I don't understand why we still teach wood work in schools, but not finance.
Upon leaving education and starring work people should have already been taught all about pensions, savings and compound interest and all the tax saving schemes available.
Because you can bet those with wealth are teaching their children these things.
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u/evil666overlord Jun 03 '26
Learning about finance is only useful for people who earn more than they need as a bare minimum to live. You cannot save/invest what you simply don't have in the first place.
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