Pensions and the working age

Pensions and the working age.

So this was prompted from reading an article that was shared on face book the other day. No names as this isn't targeting anyone but just my own thoughts around the subject!

In 7 days ill turn 35. Not something I relish because, as my other half points out ill be closer to 40 than 30 the day after. Thanks.

Recently the government has announced yet again a lift in the retirement age of those currently under 42 cannot claim their state pension until they are 67.

I did the math as you probably are now. 67 - 35 = 32.

Yes according to the government I need to work for just shy of the same amount of time i have been on this planet to receive my state pension. A pension which today will earn me ￡155 per week. ￡8000 a year.

Now I've worked for the last 17 years to put myself in a position where as i like a few nice things in my life i can afford them. Holidays here and there, A new car every few years, Some new clothes, and a mortgage. Yes that little thing that us Brits are determined is the best thing on the planet our own home ownership.

To put the current state pension into perspective, In my area - this would cover the rent on a 2 bed flat, but not pay the bills, Just about afford pay for a 1 bed flat and the bills but no food.

You get the picture for me this is pretty dire an I hope most other people that read this will think the same way.

Im sure the second thought through any ones head that is reading this will be that's alright i have my company pension to top up my state pension. Great. Depending on how long you worked for the same company you may average a private pension that will pay out (on average in the UK when this was written) an extra ￡2500 per year. Yes you have worked for 45 years of your life for a grand sum of ￡10k per year. That scares me more than any other measure of how the country is performing.

I didn't come from a privileged background, my parents gave us everything they had - my mother a bank cashier and my father a carpenter. The best thing they did give me is the foundation to be the person i am today which is priceless.

More than 10 years ago i realised something that is now reported in the papers. There are more and more older people claiming pensions: Were living longer.

There are less and less people working: More people are self employed, staying at home with the kids, travelling, taking career breaks.

The state pension deficit like the total welfare bill cannot continue to pay out if enough people do not pay into it.

Do I expect to draw a state pension when i turn 67. In short the answer is and always will be no. (Im also willing to forfeit my state pension if the government can give me a tax break or similar to make up for me not receiving it - and give the money to some one else that needs it)

That for me is also another 6 separate terms of parliament with no guarantees that a future government will still be able to afford to keep paying a state pension.

What did i do?

Firstly i did everything I could to buy a house. Most people will be surprised but my first house cost me ￡20,000. But you would be correct in thinking its not in the UK!

My first UK property cost me ￡500. Yes a measly ￡500 holding deposit with a first time buyer deal of a 5% deposit and a 95% mortgage. Now people will lambast me. It isn't that easy these days - but there are still ways.

That property I bought I still own. I don't live there, and haven't for 12 years. Currently after all costs that property makes me a net profit of ￡398 per month. It doesn't immediately sound like a lot, but its 68% of my annual state pension from 1 property.

But rather than spend that money today, i reinvested it, and bought a second property, and a third and so on.

If I decided to retire tomorrow i would receive 2300% of my state pension per month. Now that sounds good to me. But I'm not stopping there. I have set goals and targets to have an income of 23000% of my state pension if not 230,000% of it!! Do i sound mad... Maybe.. but its totally possible.

My second point to this is that I invented to hit 23000% before I’m 40. Yes within the next 5 years.

Why write this?

As most of my friends that read this will know, I'm not massively money orientated. Its nice to have, yes we have a nice house and car. But equally I don't flash the cash, or seem overly pushy with money - mainly because most of it gets re-invested back into the business... Its that old saying, do what everyone isn't prepared to do in the sort term to live how most cannot afford to in the longer term.

A few take aways for you

- Budget properly and include every penny (this is something I wasn't great at but is one of the biggest things that has helped identify savings).

- Cut out the shit. Stop eating out stop spending the weekend in the pub blowing money that you don't have. Stop smoking, put down that new pair of shoes, you don't really need that new t-shirt.

- Don't drive an expensive car that you cant really afford. Get a new deal, get a more efficient car, change your insurance to save money

- Check you aren't paying too much for all your utilities, bills etc this can be a massive saving.

If you don't know where to start, if you are stuck, if you feel lost. Get in touch. Im more than happy to spend time with people who WANT to change their lives - you can start today and build a better future for you and your family.

From broke to Financially Independence can be achieved in 19 years... 7 if you plan strategically. (Official Figures)

Financial independence is the money to never need to work again. Now what will you do with all your free time?

Property isn't the only answer, but check out the Sunday times rich list - where most of the top 100 peoples wealth is from Property. That has to say it all.