November 22, 2005

Work till you are 67?

It's an interesting quandry isn't it? Whether save more while you are working, or retire at 67. That is the debate that newspaper journos are obsessed with at the moment.

And it is probably because it is an extention of that age old debate about free-time. How much are we willing to sacrifice in leisure time or in our careers to achieve one or the other?

Putting a price on leisure time is hard to do - indeed, it is probably impossible. What is having a lasting marriage worth? £1 million? £2 million? What price for happy healthy children? £5 million?

But how much extra can we really save each month in order to retire sooner? My guess is that we most people in the UK could do more to live their lives a little bit simpler and spend less indulging ourselves for short term satisfaction.

If you would like to enter the debate on working longer please add your comments below.

November 14, 2005

Save money: Live with granny

Monday's money-saving tip: Move in with your parents (and your grandparents).

A new survey out today from Economic Lifestyle (i'd never heard of them either) suggested 800,000 people now live in '3G households' - where three generations live together.

I went on the ITV lunchtime news as a pundit on the sofa. Both myself and fellow expert Gordon Lishman (Biog: Lishman), Age Concern director-general, agreed that it was a two-way thing - pensioners have lots of money tied up in their homes but lower average incomes than a few years ago while young couples are struggling to get on the property ladder (House prices to blame on both fronts). Hence why so many are moving in together.

The benefits are that you share all the bills and council tax, plus pensioners get to keep their state pensions and even things like the winter fuel payment. The downside is you might fall out.

One of the alternatives for pensioners if they want to keep their home is equity release. These plans are generally bad value (it's nearly always cheaper to sell up and downsize) and have attracted critcism. (Money Mail: Fears over equity release)

Gordon was telling me in the cab after the TV appearance that Age Concern's commercial arm is going to offer equity release through a third partner (Northern Rock), sold only giving the very best advice, of course.

I'd be interested in hearing opinions on it...

- Andrew Oxlade

A guide to equity release

P.S. I was on the sofa with Nick Owen (Biog: Nick) and Nina Hossain (Biog: Nina). They were really both very nice (I have vowed to expose snooty presenters). Actually I used to work with Nick's wife Brenda in regional newspapers who's also very nice. (I love name-dropping).

November 08, 2005

Pension payments vs cat neutering

How would you answer this? My next door neighbour, a nice chap in his early fifties, cornered me the other night. He wanted to talk about pensions, I just wanted to get inside because it was cold.

Anyway, the upshot is that this chap has a stakeholder pension to which he contributes less than £100 a month. He's just had a forecast saying that when he retires, the income he'll get will hardly help him to have the retirement he hoped for - indeed, it would hardly give his cat a reasonable retirement income.

You can imagine what his next comment was - it went something alone the lines of he might as well put the ****** money on the horses instead.

I do see his point - his contributions might be too small and he might have started too late to get anything meaningful from his pension - but he was trying to be prudent. He thinks he might as well not bother. I think he should spend some of the money he saves on neutering his tom cat. What do you think?

October 17, 2005

Sipps and house prices

I met today with one of the high-fliers from the world of buy-to-let. Lee Grandin, aged 34, runs Landlord Mortgages, the 'UK's largest specialist buy-to-let broker'.

While most people in the mortgage game are talking up the forthcoming changes to Sipps in the so-called A-Day revolution (Archive search: 'Sipps'), Grandin is going against the grain.

Upmarket lender Savills says Sipps will pump £6bn into the property market. Grandin says it will barely have an impact on house prices because buy-to-let investors prefer to borrow heavily on properties to ratchet gains higher. The Sipps rules make this tricky. He also says investors would face a captial gains tax bill for selling a property if they try and put it in a Sipp.

We'll see who is right come post-A-Day (1 April 2006).

By the way, Landlord Mortgages is also due to publish the latest figures on profits from property and the early signs are that it won't be good news. You can read it first before anywhere else in the next few days on our special section www.thisismoney.co.uk/buytolet.

- Andrew Oxlade

October 10, 2005

Sylvia Hardy: hero or villain?

Does anyone, like me, get a bit miffed by the fact that Exeter-based Council Tax refusenik Sylvia Hardy is a hero? I have buckets of sympathy for folk whose retirement income has stayed flat while taxes have soared.

But hero she ain't. I can't help wanting to point out that she and her retired pals are likely to be a hell of a lot better off than the next generation of pensioners. For one, she's got a reasonable pension that allowed her to retire at a comparably early age. For two, she's got a (vaguely ok) health service that will pay for her hip replacements, or other treatments, should she ever need them. I don't reckon future generations will have it so good. And, ironically, it's those future generations that are paying for what she's got right now.

When today's thirty-, forty- and fifty-somethings retire, they will have to do it later than Sylvia. And they will probably have to have saved more and worked harder. And their attendant retirement benefits, in terms of healthcare, fuel allowance and free telly licence, etc, will probably be considerably reduced. Who's paying for what?

I don't resent my taxes going towards Sylvia's retirement, but who's going to pay for mine?

- Richard Dyson

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Andrew Oxlade Richard Dyson James Coney Charlotte Beugge This is Money team