Off Topic The cost of living

I'm on about the fact that there was a really big run up in prices after they announced it was ending as people rushed to take advantage

 

Dunno what age you intend to retire but factoring in the state pension to replace a chunk of drawdown income can essentially increase your estimated income per annum between, say, 55 and 68, possibly allowing for an earlier retirement. Use the State Pension as a guaranteed backstop to a pension pot you overdraw on in the initial years of retirement.

 

We bought our house a few years ago. The people who owned it before us had it for two years and made £40,000 on it, without doing any work. We’ve been told it’s increased the same amount while we’ve been here. Thing is, it’s only a small two bedroom house, so if we decide to have another child we have to move. Three or more bedroom houses where we live are going to set you back at least £280,000, and that’s when you make the compromise of living in a less desirable area and willing to do renovations (with all disposable cash estate agents think you’ll have left over). I don’t know how we’ll make the jump up, or how anyone would be able to buy our place like we did.

 

I felt the same way as you and planned in a similar way but I do remember getting the letter saying that, from next month we're giving you this much a week, (in my case 230-odd), every week, for ever, you don't have to do anything and it goes up every year. And I thought, hmm, thank you very much, I'll take that!
And as Ernie's posted, it means you can offset what you take from your drawdown (if you have that). Kind of a double whammy.

 

It was called MIRAS .
Mortgage Interest Relief at Source .
It was claimed by both joint mortgage owners but got reduced to one which resulted in a rush to buy houses .

 

I had same situation and for the same reason - but actually lost money.

If you're earning £70k as a couple/family in London, you're better off not working at all (or under X amount of hours a week) and getting housing benefit, council housing, full kindergarten places and the rest of the works - hence why many don't - the system is messed up, as is accommodation.

 

And that's why the Triple Lock is not excessive - it's needed in order to make sure that, over time, the State Pension increases to something more meaningful.
Auto enrollment has been a great move too. As someone else said, it should be mandatory (at least at the minimum level). People have to take some personal responsibility for their future, not rely on the government to provide for them.
For any younger ones on here, please take these things seriously. They are so important. And the decisions you make NOW make will make such a difference to yours (and your families) future, due to the effect of compounding. Make sure you are in your company pension (assuming you have access) and if possible start sensibly investing even a small amount each month into a well diversified low cost investment fund (in an ISA wrapper) for the long term (and/or into a cash LISA if you haven't got a first property yet). Yes, I know it's hard atm, but these things are so important.

 

I think unless you worked for a company that offered a good pension scheme retiring early is out of reach for most .
My working life hasn't been one straight path I've had lots of periods out of work which made regular contribution impossible .

 

Yes good advice .

 

In Australia we are paid superannuation which is 11-12% loading on top of your salary (it's been building by 0.5% over the last few years so think it's at 12% from the coming financial year) paid by your company into a managed fund that you cannot draw down until you retire (I think there was some option to use super to purchase property but think they've gotten rid of that, or hope they have), with the idea then being when you retire that you set a 'salary' that it would pay out to you on a monthly basis that is (hopefully) drawn from dividends from the funds you have invested, so the fund balance does not actually reduce materially over your retirement. This is mandatory for all companies in Aus.

Is there not something like that in the UK?

 

I'm on track to retire at 57 and that's my aim. All my calacs are based on only my DB pension/stocks and shares etc If and when I get a state pension it will just be a bonus on top that I'll gladly take. But it's never taken into account in my planning

 

I find the old age pension a really good top up for my University pension. I get 1/4 of my Uni salary (index linked), plus a fixed amount from a small private pension plus my old age pension which makes me reasonably comfortable. I also have another private pension I haven't drawn yet. My wife has not reached pension age (retired early, the NHS were killing her) but gets 50% of her NHS nurses salary (index linked).
I wouldn't want to try and live on my State Pension alone but, of course, many have to. They have my sympathy. How much you get depends upon SERPS but this is not the place for an explanation of that.

 

Oh I'll definitely take it when it comes, I'm just not taking it into account when planning. It's just a bonus

 

That's wild to me!

 

You can, as far as I'm aware, opt out of it as well which I think is ridiculous and should be stopped

 

What would be the benefit? Would your employer pay you the amount instead? Here because it's a loading on top of your salary there's no impact to you whether it's paid or not (other than, obviously, when you retire). You can even make voluntary additional top ups which come out of your pre-tax salary (so basically means you get taxed less AND get more returns in your super) and I believe the government matches any voluntary contributions.

 

TBF I'm the same, I keep saying I'll retire at 57. But I think it'll be more likely retiring from full time work and still doing things on a consultancy basis etc when I choose to.... But a lot can change in 20yrs