That’s the question Michael Buerk has been asking those tuning into the second episode of Channel 5’s documentary on our retirement planning.
1.5m of us are working beyond the retirement age with 90% reliant on state benefits alone. One in five of us have no pension at all.
Gavin and Louise have no plans to be working beyond 60. Gavin would like to retire at 55 having been in the army since 1989. This would mean them retiring together.
They are “seizing the day” but they haven’t ever sat down to work out what their dream would cost.
Louise has £22,000 in a pension pot and a buy-to-let income of £400 pm. Gavin has a military pension of £12,000 a year and a lump sum to come.
They are hoping to spend 3 months a year travelling abroad. Having been taken to the travel agent it turns out one holiday in a lifetime in New Zealand would cost them £15,000. They want to spend £10,000 pa but their pension planning tells them their combined holiday budget would be £2,500 – one dream holiday every six years.
You can’t buy a sausage with a brick (the rent trap)
Nearly 4 million Brits plan to sell their properties to fund their retirement. But they will still need to find somewhere to live.
Denni and Graham moved into rented accommodation , having sold their property to buy a salon. They are trapped in the “rent-trap” meaning they are working for their landlord, not their retirement.
Renters are stuck paying more for their rent on falling (real) incomes. The number of older people in the private rented sector has doubled in the last ten years and the vast majority of them are people on low incomes renting in the private sector.
“Once the kids leave home”
For retiring sergeant- major Gavin White, what’s critical is getting another job when he leaves the army or face a drop in income of £17,500.
Far from retiring when the kids leave home, he is looking at living on subsistence levels – not exploring the joys of the new found freedom .
For Gavin and Louise to retire at 55 and 60 , they could also consider down-sizing.
At least Gavin and Louise have the option to compromise on the dream.
Juggling as a single parent
Single mother 44 Clare Craig splits her time three ways. There’s no money to save for a pension , no money for a holiday and she can’t see beyond the life she’s not properly living on now.
Two thirds of the people who rely on the state pension in retirement are women and most are single.
The retirement outcomes of single parents are half the comparables of those who spent an equivalent time in a stable relationship.
Can you afford your retirement- now?
Just over half a million of us are approaching their retirement age this year.
Ivor is one such fellow, at 59 he is still working the clubs on ever diminishing earnings. He’s washed-out by his own admission – what can he do but retire? But he’s too scared to do anything else , because he has nothing to fall back on.
For Gavin White, the option of earning after he leaves the army is now the only option if his and Louise’s comfortable retirement is to happen. Hostile environments not luxury holidays – it’s not what they wanted.
Carol May is a 64 year old cookery teacher who has worked out that there won’t be a time when she won’t go to work. Nowadays she works three days a week which exhausts her- she’s a Waspi Woman.
With 40 years national insurance behind her, she only have a roof over her head thanks to charity. She relies on food-banks.
The problem is partiularly acute to women like Carol – relying on benefits and low-paid work. It’s harder to find and keep a good job as they grow older
Big ideas – need big plans
Felicity Hannah points out that for people like Gavin and Louise, it’s not enough to just save for retirement, they need to plan for their retirement.
They don’t just need a pension pot – but a retirement plan – in financial terms an AgeWage.
Gavin and Louise have used the program to create a ten year plan which involves working longer and saving in a purposeful way so retirement expectations are met.
The grim message of the program was that Gavin and Louise appeared to be the only couple over two episodes who had done just this.
So was this two part documentary worth it?
There’s a lot of talk on social media about it focussing on doom and gloom. But in the gloom the gold gathers the light about it.
I found the program has given me a kick up the backside to get back to what I should be doing – “converting pension pots into retirement plans”. So I’ll give the last word to Felicity Hannah
My favourite review of tonight’s episode: ‘Felicity, a smiley, curly-haired harbinger of perpetual misery, visits them every now and again to administer another kick’
On at 9:15 tonight, channel 5 https://t.co/cijiKL9RtW
— Felicity Hannah (@FelicityHannah) December 5, 2019