Will You Be Hit by the Pensions Crisis?

Why is it that we're struggling to afford our relatively small state pension, when other countries across Europe pay a far higher state pension?

Our pensions got robbed, that is why.

Thanks to auto enrolment I’ll scrape through. I’m 50, I’ve 7 years left on my mortgage and my company pays double what I pay, and I pay 9%. This is made better by the fact I now earn a triple income through climbing the corporate ladder. On one hand, with an annuity my income when I retire will be half what it is now, but I’ll also be mortgage free. Plus, I’m in the share scheme so I’ll have around 40-50k of shares by the time I retire too… so I’ll make sure my house is future proofed in terms of energy by the time I retire, and that little pot will buy me a new car and get the the house fully redecorated/furnished.

So, if everyone was given £10k at birth, and it was invested at 8% ROI, by the time you retire it would be worth 1.7 million without making any contributions. Such a scheme would surely be better and cheaper than a state pension. Even better, the government gets to keep the money if you don’t survive long enough to claim it.

Load of rubbish Labour party want to means test accept you will be poor it is all an illusion they want to take all your money from your house not just 84k the young ones will have to work till your about 70 plus

i've heard a lot about moving funds within your pensions. I want to do it. But its a very daunting thing to actually do Especially when words i dont understand are being thrown around. I would love a video dedicated to how you do this with all the big companies.

What about the previous LTA and the replacements? It’s limiting.

Schools do not teach what money is, how it circulates, how it works, or how to use it as an investment tool. They only teach how to spend it. This is deliberate.

I'm doing 16% up from 3.5%

That initial hit did hurt ngl but 24m in and I'm used to it, I've decided that for each payrise I'm going to put half to my pension.

I'm also putting 10% into shares for the short term purchases.

I'm trying to get my mortgage down over then next 10 years then I'll be saving what was mortgage payment was.

Just hope its enough, it a worry.

I'm 41 and have only been doihg it properly for 2 years.

It's definitely a major concern.

Another great interview, well done guys

the population isn't shrinking, what a load of tosh. It's called immigration. Does this guy work for Kier Starmer?

Hi, any advise on who to go with for the junior sipp and adult sipp please

I'm 42 and in my 30s I worked in Australia for five years. Since then I've always wondered why the UK haven't got a similar system. It's so simple, and results in the whole population investing responsibly in funds that basically mirror Vanguard ETFs. Unlike here, the system sets people up for success, and does the thinking for you. So instead of the UK ponzi-esk cross generational pension system people have a real fund invested in their name, built on the money they earned, and they can view online. Basically Vanguard for the masses. Where's my pot in the UK? Oh it's paying for my father's fifth pension! And I'm in the generation who got screwed out of them.

Lol and liebour are about to raid future pension savings....

So you said liebour instigated auto enrollment and now they are penalising pensioners... long term plan I think so..

Great podcast. Really enjoyed it. Drawdown options is such a big decision. Glad i have over 20 years to decide 😂

Choice is get a house, pay it off just before retirement and then sell because tiny pension cannot pull the house or rent for life and get OK pension? Full time professional MEng.

Two dB pensions one I was in for 23 years I put 7.5% company put in 17.5% that was good and an other dB pension that was free put nothing in lovely being born at the right time was very handy and retiring at 55 even better 😁

The other issue with migration is recent waves the absolutle majority are not paying into the state so they are just a burden on the tax payer which will collapse the pension system faster.

I wish school showed me examples of compound interest off a modest salary or if you bought a older car and not a new one on monthly payments and used the payments to invest in index funds and show you practical differences that then can be life changing long term. I am 36 now so hopefully not too late got max match rate for pension and also a stocks and shares snp 500 T212 ISA and ultimately living on less than I earn. My work friends are consumed by the latest things clothes tech cars klarna buy now pay later rubbish. i am glad for these videos that have changed my mindset and value of money.

The thought of the government having a slice of my pension to piss up the wall turns my stomach

Bible said three score years and ten is man’s life expectancy…… so no we are not living longer

The problem with the UK state pension system is just as you said their is no pool of money. Their should be a pool of money as the working citizens have paid into a pool of money, but the government has mismanaged it and already spent it.

We may be at a very precarious position, as rumours circulate about the state UK pension becoming means tested. Depending on when a means test would kick in, there may be a nunber of individuals who have barely crossed a certain threshold, thus losing their right to a state pension. I'd be interested to hear the opions of others about this.

There is no way out at this point, this guy is deluded if he thinks economic growth and spending cuts will work. It’s QE to infinity at this point

I am sooooooo sick to death of so called self anointed experts saying people’s pension plans aren’t enough: here’s the deal - most will no longer have a mortgage! 12k state pension + 12k private pension (from a £150k annuity fund) puts you in a perfectly nice place (as you have modest outgoing) and assuming that most of us actually don’t want to start jet setting all around the world to places such as Bangkok. This extreme hackneyed cliche nonsense that has been spewed out for the last 30 years about 20% of your salary needs to be in a pension nonsense. I’m sick to death of it. This crap is still alive and well in 2024 Geez give me a break.

I'm 25. Pensions will not exist when I retire, nor will this country as a functioning entity. You guys are blind

Young people who probably will never ever see a state pension, would be able to save more for their retirement, if they shouldn’t have to pay taxes for promise of state pension which they won’t get. It’s easy to say save 12% for pension, but with this cost of living crisis, and the state of our economy, it is really hard. Everything goes up, including taxes. The only thing that stays the same or even decreases is all kind of allowances. Meaning less and less spare money to invest.

With regards to housing, it would be great to have own home, but it’s UK, repairs costs tone of money, poor standard of our housing means sky high energy bills etc. First someone should implement proper standards, as UK houses are really poor quality, and u need to fix them as soon as u get the keys -.-

Tom was fantasitc on this podcast. A fountain of knowledge, really articulate easy to listen to. Thanks Tom for your time and valuable perspective!

Hey, I've watched this video a few times, I have also logged into my workplace scheme to see If I can do a partial transfer but it seems they don't want to let go of the funds without stopping payments :(

"You can only transfer if contributions are no longer being made to your PENSION COMPANY NAME retirement pot, either by your employer or yourself."

Am I stuck?

Why are the self employed not mandated to pay in to pension? If their employer is themselves then they should be paying in for their employee (themselves) as in any other company.
I dont understand why this is not happening still

Did you know that if you don't own your house and you're eligible for Universal credit.

You can increase your private pension contributions to the roof like 70 or 80 %... THEN your "take home pay" will be considerably less, THEN your universal credit will go to the roof...


And because of that you can contribute £10k or 15k(ish) every year in your pension pot as long you're eligible for benefit...


And it is completely legal strategy because the benefit doesn't take in consideration AT ALL the amount you old in sipp or private pension.


Then you transfer your private pension pot to an SIPP

And you buy your own asset through your sipp like defensive strategy (etf world/emerging marker) or defensive stock....

All your stocks and etf paid by the government 🎉

Thanks me later 😅🫂

25x70,000 is 'only' £1.75m btw not £3.5m ;)

Thank you guys!!!

great interview, you raise some really good long term and wider issues. I had only ever considered my personal situation. and I havent always contributed. I am lucky to have a good sized pot, and 7 years to contribute heavily. the country as a whole has a big problem. I will be encouraging my children in their 20's to act, i would bet there wont be a state pension when they need it.

Clarification on Australian retirement system
1. There are about 500 Superannuation Providers (Pension) in Australia
2. There are 3 primary pillars
a. Aged Pension (means tested and asset tested) with sliding scales for each. For example, assets of more than about $AUD 1 million is the cutoff and excludes the family home.
b. Superannuation payments made by employers (originally to reduce wage rises in 1992). These are mandatory and will be 12% of income from 1 July 2025.
c. Voluntary contributions by employees. Payments can be made either as pre-tax or post-tax (deductible in the year of contribution)
The system is now portable.
It also uses the following taxation treatment
Taxation on entry with 15% on payments
Taxation during the accumulation phase on earnings of 15%
During the retirement phase, all earnings are tax exempt.

Australia does NOT have a national insurance scheme, so the aged pension is funded out of general taxation revenue. We do not need to worry about replacement to fund future pensions
Australia is projected to use about 2% of GDP in 2050 to fund the Aged Pension. I hear horror stories about the UK and other countries

So how will you save for the pension that the government will never let you get old enough to claim?

Warren Buffet quote "Saving is not what is left after Spendiing, Spending is what is left after Saving"

Im 41 with £161k in my pension pot with 16% of annual earnings going in each year as top ups. Am i doing well?

Forward a link to Rachel Reeves👍

Brilliant podcast, superb guest. Thankyou Damien.

Default funds and NEST, I was in with them for 2 1/2 years and paid just the legal minimum, the company offered no matches for extra payments, no salary sacrifice etc. with my age I put extra payments into my personal pension ( an ex works pension) as the nest was only going to be worth £6-8 K by the time I retired.
I moved the money from the default investment system (I was 63) 70% was going into consolidation funds returning nil growth effectively. Moved it all into growth funds as have another DC scheme and DB scheme plus full state pension due.
This fund with Aviva has grown substantially over the year and a bit of now being in the growth fund.

Personal finance should be taught in schools 100%. The argument of it not being interesting to teens is bogus. I found many subjects dull and pointless in school, but doesn't stop them being taught. Even if you remember one or two things it's still more relevant than some of the other stuff you learn. Mortgages, pensions, loans are perfect modules of a finance subject that actually has some real world usage to everyone.

My wife and I have about £350K in ISAs, and it's difficult to get used to regular five-figure swings. I made £21K from market movements last month, but even that isn't very "enjoyable" for a variety of reasons, such as "Yeah, but the bubble is just getting bigger" or "I have years until retirement, so everything is more expensive." You have a persistent fear of the worse.


However, self-education, which includes seeing movies such as this one, is still beneficial to some extent. Additionally, a skilled market analyst such as Leah Alderman Foster who I do employ, creates a superbly balanced professional guide.

P.S. I play blackjack and side hustle poker, so it's not like I'm not accustomed to four figure swings. However, the market seems so estranged. and far removed from your actions. Particularly in poker, if you're winning, you know you have what it takes to get through any slump and weather any fluctuations. All you need to do with the market is buckle up and have faith in the procedure!

There are plenty of us in our early 60's who never were members of a defined benefit pension scheme, and who also couldn't benefit from the current rules on workplace pensions for the start of our careers. As a result, our pension pots are smaller than they could have been. It's also not true, although it is often repeated, that we are "all living for longer". In some areas in the UK, that may be true, but in others life expectancy is below the state retirement age, and has actually started to fall.

Worked in HK for 4 1/2 years and took all the money at low tax to put towards my house when I returned to UK last year. Now for last 18 months back in UK been putting 50% of my salary a year into pension via salary sacrifice along with work contributing another 13% on top along with giving me the NI savings back so i max out the £60k yearly allowance. Seems a no brainer when money would have been 40%+ taxed otherwise. Plan to is do that for 5 years and then take my foot off the gas so to say and let compounding do the heavy lifting. In my mid 30’s but want to take a low stress / low paid job when i hit 50 and then retire at 57/58 when i can access pension pot

My dad is in the exact same situation. Put a bit in his pension early on, but then basically stopped since he was a contractor, until a decade ago when he began working as an employee again. Then he realised how much he needed to save right now in order to retire in 10 years and have a good pension to live on.

To clarify- when you say your should save 10% of your income for retirement (including company contributions) - is that based on your gross or net salary?

Leaving bonus etc. out is not just a DC scheme thing most DB schemes didn't contribute on bonuses etc. either ( that's why employers like company cars etc. as perks)