Pensions

angelic upstart

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Why is pension provision so poor in the UK?

Why do so few consider their retirement options and plan for their futures?

Why is the state pension so low when compared to our European counterparts?
 
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Terryhall

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Why is pension provision so poor in the UK?

Why do so few consider their retirement options and plan for their futures?

Why is the state pension so low when compared to our European counterparts?
Have to say I never really thought about it much in the UK, but in Switzerland there is a very clear "3 pillar" model to your pension

Pillar 1 - from the state (e.g. the UK state pension)
Pillar 2 - employers contributions (e.g. the UK workplace pension scheme - part of this is compulsory payments from your employer, part is the voluntary piece that you contribute from wages)
Pillar 3 - voluntary additional contributions (e.g. private pension pot - these are also fully tax deductible here)

I guess in the UK by "default" you would get pillar 1 and part of pillar 2 - but not everyone does the voluntary employment contributions under pillar 2, and not many seem to do the completely voluntary contributions under pillar 3.

That said I suppose the options are all still out there, it's just that the onus seems to be more on the individual to go out and find out about it, rather than on the state to point out the information (that said there are recent TV ads for workplace pension contributions etc.)
 

angelic upstart

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Terry, we have the same 3 tier structure to an extent. I found out that 68% of the self employed do not have any pension at all. Leaving them with the less than generous state pension.
 

Terryhall

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Terry, we have the same 3 tier structure to an extent. I found out that 68% of the self employed do not have any pension at all. Leaving them with the less than generous state pension.
Yep, that's what I was meaning - the same structure is more or less there - just people either do not know about it, or do not take advantage of it.

The 2nd pillar here also serves as a sort of life insurance / disability insurance, e.g. in the event of my death or serious injury leading to inability to work, the pension pays out accordingly. The third pillar too. When I first moved over here I went to the bank to ask about life insurance products and was sold a 3rd pillar account, and took me a fair bit of time to figure out why - mainly because I just had no idea of how the UK pension system actually worked until I arrived here and thought about it from the outside.
 

Jason H

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Terry, we have the same 3 tier structure to an extent. I found out that 68% of the self employed do not have any pension at all. Leaving them with the less than generous state pension.
My stepdad is in something of a position like that, he decided to be cash/asset rich rather than having a big pot of pension money to retire to.

Pension provision is relative though, innit. Our pension provision is infinitely better than most countries. Some countries (you mention Greece) have overdone it.

The biggest failing in this country (not sure about others) is in not having heftily increased the state pension age years ago in life with life expectancy.

Going by Terry's pillars, I'm currently in the first two - got a pension through my employer.

There is a fourth pillar, inherited wealth. When the in-laws pop off (they're 82 and nearly 80) we'll have a very nice little nest egg, thankyou very much.
 

Terryhall

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Good link here on workplace pensions - there are two sides to it - the employers contributions (which I think are compulsory?) and the employees contributions (which I think are voluntary and need pro-active involvement by the employee to kick this off)

https://www.gov.uk/workplace-pensions/about-workplace-pensions

I think per default everyone (depending on the employer) gets the employer contributions paid into the pot, but not everyone knows about / does anything about the employee contributions. Where that gets messy is if you are self employed and then the whole thing becomes essentially voluntary contributions...
 
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