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Thursday, July 19, 2007

When I'm 64

According to some stockbroking firm's research, young people "don't understand" how much money they're going to need for their retirement.

Is that right? Or is it rather MORE likely that the average 20-30 something in London is so used to being up to their eyeballs in debt, living on their overdraft and wondering when - if ever - they'll be able to afford a studio apartment in Barking that the archaic notion of "retiring" at all seems entirely unlikely to ever happen to them?

"Young people underestimate the amount of money they will need for a comfortable retirement by almost a quarter of a million pounds, research shows.
Nearly half of people in their 20s and 30s (45 percent) have no idea how much they should be saving for their retirement, according to research by execution-only stockbroker Selftrade.
They estimate they will need a lump sum of 262,456 pounds to see them through retirement -- a far cry from the 500,000 pounds needed to receive an annual pension of 25,000 pounds, the average annual income among British workers."


Nick said...

The thing that annoys me is that given £500,000 put away in a an good savings account would net you something in the region of £15,000 per year in interest alone and not touch the capital, why should we even be bothering with pensions anymore? Besides think of all the fun you could be having with half a million quid (albeit eeked out over 60 years). I think i might just die young living the high life of rich foods and fine wines and expensive cigars (or Mac Donalds, Coke and Marlboro's). Stuff getting old!

Ron said...

Couldn't agree more. I think I saw that London moved up from 5th place (last year) to 2nd place (this year) of the most expensive cities in which to live. One article I read cited high rent and the fact that the Sterling gained on the dollar as some of the main factors in London's move to being the second most expensive city in the world to live in.

Now, I know that the entirety of the UK doesn't reside within the greater London area, but aside from rent, cost of living appears to be the same in Lancaster! I mean, in both cities it's still around 90p for a litre of petrol. Milk, eggs and butter cost relatively the same amount. So you save a few hundred quid on rent. But according to this link the average (2005) income in Lancaster is half of what it is in London, so what you saved in rent you've lost in income.

The fact that cost of living is relative to wages is not a new concept. But frankly, to reach a zero balance by year's end, JUST to break even.. seems to be an accomplishment. And you can rule out the food, wine and cigars that Nick mentioned. That's IF you choose to just pay your bills and not really LIVE.

I say send the credit cards my way, and reserve me a table at Luigi's in Covent Garden and have a bottle of chianti and a couple cohibas waiting.

Jo said...

Live fast, die skint. I like it.