Will We Ever Be Able To Retire? 

7:36, you have forgotten a very important factor - INFLATION

More and more people might face a tough time in retirement. Low-paying jobs, inflation, and high rents make it hard to save. Now, middle-class Americans find it tough to own a home too, leaving them without a place to retire.

I once watched a video on centenarians speaking of the benefits of living such a long life. One man, aged 105, said "It gives me great joy that I have got my own back on the thieving government by drawing my state pension for 40 years"!! Ha Ha!

So now we will not even get the pension, and with the NHS is broken, and the education system is broken, what exactly are we paying taxes for?

We have 9 million people who could work not working and the rest of us who work getting taxed to death… and apparently will be till we are dead. wtf happened to this country?

The prospect of retirement brings forth concerns about financial preparedness and the ability to maintain a comfortable lifestyle. Factors such as insufficient savings, uncertain market conditions, and increasing life expectancy contribute to the uncertainty. Seeking guidance from a financial advisor becomes pivotal in addressing these challenges and crafting a retirement plan that aligns with your goals.

Literally just looked at my pensions after watching this, saw that one has been losing money and switched immediately. Sometimes we just need that reminder! Keep up the great vids.

If anyone is relying on state pension for retirement you haven’t been listening to Damien carefully enough for the last 3 years

It's very simple, and has been going on for more than a decade. We are in late stage capitalism. Corporations own everything, and governments are underfunded. So what happens is they keep moving the pension age up, and health coverage down. So the average life expectancy matches the pension age. This means governments get to keep collecting a large portion of people's wages, while not actually providing any services for it. A levy on the people.

Let’s face it. The UK is screwed by all the free loading that is going on. We work hard to contribute into a system where someone that does nothing all their life can still get the same (or more) from the system.

Not a chance. I'm working to 67, nevermind 71 . . . I've worked since I was 16 , I'm now 37 , ill work until 60 , after that my mortgage will be paid and I'll sit on doll , stuff it !

You are truly fantastic 26 millennial here, on £31,000 putting 12% in my pension pot of £6.7k increasing awareness of pensions for young unsuspecting adults like me makes all the difference God bless

It’s also about stopping working in time to spend time with loved ones before they die as well. My loved ones are older than me and I am in poor health although I’m in my forties. So it pointless me struggling on working for as long as possible for the sake of a pension I’ll never get to receive. Everyone I love will be dead and I’ll be either dead or too ill to do anything anyway. And if I live a little longer and I’m broke then I’m not going to regret having spent the time with those I love. I just have to find the courage to stop working before it’s too late. Very hard to do while I’ve still got a mortgage noose round my neck though.

My working assumption is by the time I’m at state pension age (whatever it will be by then) they will make it completely means tested and I won’t receive it

In the UK we are dying soon then the last generation. Poor health care. Poor standard of living. So the government is removing their pension for the current generation. It's crazy.

Ideally they'd like you to retire, have a day or so to enjoy everything and then kick the bucket.

State pension is not a benefit…….35 years of my contributions says so……and I want it ASAP.

The explanation of the state pension being a Ponzi scheme has kind of blown my mind. It’s so true

I had another video made, but the Oscars (award show) blocked it. So, I am currently getting a bit creative with it and will drop that next week. I just wish to stress again that the advice to raise the pension age to 71 is from an independent think tank and not the government.

This might be the most important video on youtube for the UK population. I think it is criminal that our politicians do not think and act long-term akin to Damien’s pension plan. I had these exact same thoiught as Damien when I first read up on finance starting wth the Motley Fool book (years ago) and others since, that advocate low cost index trackers. Seeing as the government won’t do this for your children as it will not line their own personal pockets, I urge all parents to do their version of this for them. If you an afford it, £2880 per annum, £240 per month, while they are a child will sort their retirement completely. No matter your budget, every £1 you put away for them is £88 for them in the future!

Here we go, people who will work for a fraction of thier lives and retire on public sector pensions will decide the rest of us need to work until we are dead to pay for it.

When the beat drops, I'm killing myself.

theyve already started doing away with retirement. its called universal credit... you will work if you are deemed fit to work, until the day you die, if you are unfit you will get PIP

What they dont look at is people who have a physical demanding job ,Im 47 and my body is giving up now ,Virtigo, Arthritis in shoulders and lower back problems. Ill be lucky to keep going for another 10 yrs we dont all work indoors infront of a screen.

The way the NHS is going downhill only the rich will be living into old age.

Another problem much bigger than pensions is looming its called property rent. Currently up until now vast amounts of retirees end up owning their own home so no need for help with rent. If the current trends keep up the next generations of retirees will be renters with the privileged few owning their own homes. Rents are now becoming unaffordable by people in work on what historically were classed as well paid. Why would a generation of private renters whose bulk of their pay is going into pockets of private landlords to fund their retirement & what little they make scrape together to pay into a private pension just to see that continue to go into their landlords pockets. With no private pensions you will receive help from the government & unless we’re going to see 70 years olds en masse homeless & sleeping rough the state will also need to pay their rent.

I'm 41 and not even thinking about the state pension anymore. It'll be a nice cherry on the top and nothing else.

Get your own pension and forget about the government pension. No chance this system lasts another 25 years.

I have been saying this for years!! We have a small amount of cash set aside for our kids pension later this year. Can you get Martin Lewis on the case? This topic needs to be put on the agenda.

Brilliant content Damien, well said. I’ve said much the same for years. Just wish politicians would start saying it.

The £5k idea is brilliant. So brilliant, that our Gov would probably throw it straight in the bin!

My thinking is that they want us to work until we drop dead, so they they have less money to pay out. Not every worker is able to work after 65 due to nature of workm builders, Plumbers and other workers that are on their feet all day.. Heath plays a very important part. as we get older our bodies are not able to get up at 5 am and be up until late at night when we get home. Our bodies suffer from wear and tear.

A pension isn't a benefit, we've paid NI for 40 years, some longer

I read a paper on what the working population was doing about 20 years ago. It said that out of the work age population a 1/3 was working for the state, a 1/3 was working in private, and a 1/3 was on state benefits . Would like to see what these figures are now I would guess that’s why the country can’t afford people to retire

It's very easy for the average civil servant to stay in their job until retirement as their employment is not very dependent on their performance. But how about people who do physical jobs? How many of them will be physically able to do their job at 70 years old?

At 3mins 6secs the presenter says that most people are expected to live to retirement age, and then live 20 years beyond it. This is not true. Life expectancy has reduced drastically in the last 10 years. It will continue to be decrease unless something is done about it.

I’m glad you did a video on this, it’s extremely important. Thank you mate 🙏

I think state pension will become means tested. So all those that prepare for retirement won't get a state pension.

The lump sum at birth has been raised for a number of years now - so they have actually lost ground already - and over time it could work. Some academic papers/public bodies have quite detailed outlines incl for those who die before say 18, never work, illness etc Current politicians work on a short-term basis though.

Love your videos, your intelligence, your dedication. I really appreciate your work and wisdom.

Your videos just keep getting better and better Damon. This is such an emotive topic and a lot of people are sleep walking into retirement poverty. What people wanted from their retirement 20 years ago is so different to the consumer led desires and dreams now. Ask my parents what they wanted when they hung them up 20 years ago and they would say peace and quiet and to grow old gracefully, now ask me and I want to travel the world, live the high life and experience everything.

At some point the debate on Euthanasia will ignite .

I was expecting the state pension to be pushed to 70 before I get it. My retirement calculations are based off any State Pension being a bonus not something I expect. Kind of glad I was born in 1972 as I plan to take my pension when I hit 55 before rules change make it 57 the following year!

Love it. I mean technically it exists with the JSIPP - but only where a parent/guardian/loved one personally invests.

Really appreciate your videos Damien. Thanks for all you do.

The private pension 10 year link has to be broken. It’s not fair on those that have saved and planned their retirement.

Smart thinking that, you've got my vote!

The gentlest way to adjust the triple lock is to switch to a double lock, using the middle value of the three instead of the highest value

I can’t wait to still be sitting chained to my desk celebrating my 80th Birthday with my colleagues when the time comes 🎉

Thanks

My daughter at birth had £150 put into an account, she turns 18 in March and I found out that in her birthday it will be worth ……. That’s right £148, 18 years with Barclays what a joke

Your idea is good, but the problem, 2 systems will need to be servised at the same time

Wrong perspective. You have solved the issue already through Brexit. Food poverty and a collapsing NHS will reduce the life expectancy of Brits so that your pension system will be ok.

Fantastic content! I have been calling pensions a legal ponzi scheme for a long time. This has been a topic of discussion for my partner and I, and my friends for a long time. The issues are so many - an aging population, kids growing up believing they can stay home and not go to school, perhaps later on they won’t go to work. We have private pensions and invest in index funds, but I do wonder very often how many people will be paying taxes so my generation can get a state pension. I love your idea about index funds and agree that everything looks very short-term. Could it be related to the party’s 4 year cycle and the benefits they want now vs what’s good for the country 80 years from now? As always, great content and thank you for sharing.

Just amazing video. You absolutely smashed it with this one; I couldn't agree more with any of the points. My one comment would be that we need some serious institutional protection for that government-seeded pension to prevent future governments making a tax raid on it. By the way, the same numbers work for a DIY approach too. So anyone with a new born child who can get together £1k/year for the first, say, 6-7 years of the child's life and put it into a JSIPP essentially ensures that their child should never have to worry about their retirement. Quite a gift to give! Meanwhile, I am following the same strategy as you: yes, take advantage of a pension for its tax efficiencies. But also keep a S&S ISA growing for access to tax-free cash on your own timetable.

1950s women get little support, we were demanding our right to retire at 60. 16 years later the DHS still haven't paid our compensation. For your own pension date security, support the WASPI protest and demand your MP puts pressure on the Public Health Service Ombudsman delivers their overdue report....delayed again

Can you add Royal London to your pension list mate? Thank you!

The UK state pension retirement age is 67 not 65

They don’t want people retiring the shortfall in workers means they want you working and paying taxes until near death the mean life expectancy is 78

Your suggestion is great, if you just focus on how much it'll boost the stock market, increasing share prices and less about how it'll keep millions out of poverty, the Government will love it.

Seeing as my back is already nackered at 26 from plastering, how am I supposed to do this at 70.

I have a 4 month old daughter. I am looking at doing this myself for her. Don’t trust the system to still be there when I am old, let alone her. I am lucky to be able to do this, I get it, but it’s such a simple solution.

They also still take NIC's regardless of it you've paid in for 35 years.

Love it Damien, what investment calculator do you use? Cheers mate!

Your pension plan is mind blowing-ly simple and very efficient.

I’ve always wondered - is there a calculator to tell you what you’ve paid in to your state pension over 40 years and what you would have gotten had you paid those funds instead into a low cost index. After all - £200 a week for maybe 15-20 years seems a bit crap if I’ve paid in £100 a week myself for 40 years. That and I can’t even pass along what’s left to my son.

Great video yet again .. simple and honest and clear

Great video Damo! Great research, and input to excellent content 👍

71 sounds very old when you're young. 71 sounds very old when you're in your 60's.

Great suggestion re: £5k for future solution (although regulator will probably insist it’s n a balanced or cautious portfolio 🙄). And if I’m denied a state pension because of means testing, well, I can’t think of anything that would make me more irate. I’ve paid in and I want what I’m due.

Great video Damo, I’d vote for you as PM 😉 extremely short sighted government. So glad I stumbled crossed your channel back in 2020…. So much education since and feel far more secure with my financial health, cheers fella 👍🏻

Great solution.

Another great one. Thank God (and my parents) I am already 57. Ready to leave the workforce, hoping I won't kick the bucket berfore I reach 67...But seriously, with a crumbling NHS and us 50-ers being anything but healthy, plus rise in obesity, etc., I think the average lifespan has peeked and will start to decline before 2044.

Actuarial sciences at the heart of mainstream discussions is really motivating to study! (Even if it’s depressing)

Your channel gave me the information and the confidence I needed to start investing. I have my defined benefits pension, which I plan to take early. But a year ago I also set up a S&S ISA and a S&S LISA. Hope to have enough to retire at 60 and anything the state pension offers down the line will just be a bonus. Investing for my daughter too, who is four, so she can leap onto the property market in her early twenties. Thanks for the videos. You're absolutely smashing it.

Just downloaded your cheat sheet Damo. It’s really good helps me massively to educate my kids and friends. Keeping banging your drum and eventually more and more people will listen and act.

Loves the videos Damien, wondering if you will do one about the NHS pension?

the plan looks excellent. compounding & time, seems logical

Is the LISA considered more of an ISA? Hope they don’t up the age of that from 60.

If we are all paying into the work based pension scheme now, i believe that was put into place because there will be no government pension for us later on.

An increase in state pension age is one thing for those in a DC pension but it's a whole other kettle of fish for public sector employees in DB pensions. I'm in a DB pension but cannot access my workplace pension until state pension age. So unlike DC pension members who can retire relatively early with whatever size of pot has been built, DB pension members are hit with a penalty for retiring before state pension age, effectively forcing you to work until state pension age which is seemingly ever-increasing.

Damien, your thinking is spot on and we need people like this making these decisions for us all. We have a population that’s obsessed with sound bites, but we need someone to cut through this and implement something long term for the good of everyone, even if it might sound bad initially (no more state pension). I am investing heavily in my SIPP and S&S ISA every year, making sure my contributions keep me within the tax free allowance for pensions, but also maximise income at retirement (55-57) with the tax free gains from the ISA. I am trying to make sure everyone I care about around me is doing the same… who wants to wait for 71 to get a pittance from the government… as if we should be grateful after paying NI for 56 years!!!

I like the idea of paying sum of money into a investment pot at birth however the amount would need to be much higher than £5k as this is not taking a into account inflation in that money value decreases over time. The other challenge would be that everybody would have built up a the same amount of money which becomes available to them at retirement age which could potentially lead to further issues?

Civil service alpha pension is already linked to SPA so when that goes up so does the scheme's retirement age.

Raising the official retirement age just adds to inequality. Everyone who can afford to will continue to retire as soon as they want and will plan accordingly. To those with larger incomes the state pension is a smaller proportion of their total and with the demise of DB pensions there are no deductions for early retirement to worry about. You just have to decide when you have enough in your DC pot to retire on or not ( Tip it never seems enough but you will never get those say 5 extra years back where you don't work, or volunteer for something that is important to you or work part time etc. ) So if you are done with your current job/career take the plunge and make it work.

great idea if you're thinking as a private investor, but for the government, it's not the best use of the money to invest 3bn a year in untargeted private companies, rather than investing it in public services or long term initiatives e.g green energy etc. Also it's transferring the risk from the government to individuals, which was pretty much the same as the defined benefit -> defined contribution switch that companies did the same. But if the stocks go bad it would still be down to the state to give them enough money to survive, so the government might have chucked loads of untargeted money into private enterprise and still be on the hook.

Yes 15 is the age I started work as an apprentice electrician. I’ve payed tax and NI ever since.

I’m in favour of reducing the SPA for people who have 45 years+ NI contributions. Reward those who have contributed their whole life. Minimum qualification for State Pension should start at 35 years NI contributions. That should sort the issue in the medium term.

Essentially a sovereign wealth fund, it's been suggested many times but governments always shit on it. We could have taken the North Sea oil reserves and would have enough money to sort out state pension, NHS and stop homelessness. But no, politicians think best even though they generally are the most unimpressive people you'll ever meet

Really good advice!

Nice timing Damo!

I do not expect to receive a State Pension. I predict it will become a means tested benefit and will only be given to those with no assets.

We could have been Norway

So many people don't realise, you have to have bought a house/flat before you can retire. It should be your absolute number one priority. Retiring whilst living in a rented house/flat will mean you will be living in absolute poverty, relying on housing benefit, paying someone else's mortgage off, for the rest of your life.

Good idea. Major concern is inflation. Assume 2.5% minimum increase to the current state pension. In 65 years state pension income will be more than £50k pa

Nice idea Damien

I knew a pension video was due at some point owing to some of the comments on one of your recent videos 😂 I think the 5K pot idea is fantastic. The current pension system cannot continue life this indefinitely. Personally, I think we will have some form of catastrophic economic collapse between now and my retirement (I'm 35, think great depression). The amount of national debt countries are harbouring is scary, it wouldn't take much to tip things over the edge in just a few years time. Great video, as usual!

My plan would be even more radical in many senses. I would suggest a pension at birth of 50k that is invested for 25 years at a more realistic 4% expected interest. At 25 the balance would be around 104k meaning the government takes back the original 50k and the other 54k goes into a workplace pension. If someone put £100 per month in until the age of 65, again with 4% expected interest they would end up with roughly the same 450k. Also, it would mean that after 25 years the system would start paying for itself due to the government recouping the original 50k. Would be more costly my way to fund, but less reliance on the markets due to the lower interest expectation, and also would allow a more stable pension investment strategy overall.

Love your idea! Of course, it would have to be made compulsory to pay a percentage of earnings into this funded scheme. That would solve the pension issue for future generations. However, it fails to address who would pay for those retired and retiring in future before the new scheme kicks in. In other words, there would be a generation saving into this new pension fund AND having to pay the pensions of those who are older than them. The only solution that I can come up with is that the pension age is ratcheted up, the triple lock is made less onerous for the state, employment laws are toughened up making it very hard to lay off those over, say fifty years of age, and that with almost immediate effect, those who are aged, say, thirty of lower, are told that their state pension will be based on the contributions at that point and they will have to fund a private pension to top up the state pension benefit that they have accrued to that point. It might also be necessary to make the state pension means tested if the above is insufficient.

Yes mate! 🙌 Completely agree that some sort of investing at birth scheme seems to be the only way to get out of the issues around ageing demographics and the OADR. It could be an actually useful version of the 'pot for life' that they keep harping on about. As you've highlighted here, lots could be done within the current framework to make it workable. Sadly I feel it would be too forward-thinking to invest in the capital markets for any government to do. Madness really, considering how reliant we all in on the markets anyway. Really enjoyed the recent Making Money with Gary's Economics. Powerful message and one I'd missed. Looking forward to your interview on Callum's podcast. 👏👏