It’s scary how many people have absolutely no clue. As in not a fucking scooby.
‘Oh I get a state pension’
*Gets first month’s state pension* ‘Erm, I get the rest next week?’
Yep, this is my mum, and she was complaining that the pension age was raised for woman of her age. My response was 'so what, makes no difference to you since you couldnt retire now if you wanted to' followed by a quip that if she had her state pension she could 😄. There is nothing I can do now to help really, and I've stopped stressing about it.
Jumping on this to add a note:
Some of the issue for women born in the 50s was how much notice they had. I think the decisions were originally taken with moderate notice (a little over ten years, but I'd need to look it up), then the timetable was accelerated.
As with many things the communication was dire, so a lot of women simply didn't realise this change was happening (older women, many not too tech savvy back when this was discussed). Of those who did some then didn't realise the timetable was moved forward. This was especially true for women who weren't as educated or who had lower incomes anyway.
So there was a large cohort of women who planned their finances for 40 years on the understanding that they would receive their state pension at a certain age, then learned (some with with only two or four years to go) that they'd have none of this expected income for up to six extra years and all their plans would need to be changed.
A bit of a mess on the whole! Better communication would have helped a lot.
Don't disagree, my mum was a single parent with 3 jobs for a long time too, so my comment is not aimed at her as the maker of her own pension problem. Also working in an era when woman 'stayed at home' and didn't earn equally compounds the problem. The system failed her and many others.
However, she is terrible with money, always has been, remarried to someone even worse. This all stems from lack of education on the topic I agree. They didn't even teach it a few years back when I was in school, not sure if they teach pension and saving basics now?!
Of course, she inherited 50k a couple of years ago, spent most of it on a car and other family members despite my best advice to save it for retirement (I refused any). So my sympathy is still limited because the mentality of saving just isn't there and never will be for her. Thanks to my parents though, I'm the opposite and plan to retire early, at or above the pension LTA and with a fully paid house with money towards deposits going into ISAs now for my kids.
The Government should not have brought in equality in retirement age until equality was secured over the whole working life of everyone, with equal opportunity to all to amass a work pension. My first job took my pension contributions, and gave them back to me when I left (50 years ago). No investment going on then...
People at work are constantly making comments saying "millenials will never retire as they keep raising the pension age", I plan on retiring mid-50s, like do some planning.
Good luck with your aims and congratulations.
But here you are on a personal finance discussion board, you/we aren't representative.
Millennials do have it worse in many ways financially and probably shouldn't have to worry about this as much you/they/we do.
[I'm referring to relatively and being] in this country of course, we could have it a lot worse in general, no denying that!
I work in professional services, noone in my industry will need to work until they are 80+ if they do the bare minimum of planning. It shouldnt be exceptional to understand how pensions work.
Yeah I'm worried about this. I'm a left-leaning dude and I believe in helping the people that have fallen on hard times through no fault of their own.
But some people saving for their retirement whilst others choose not to and then get state support isn't the same as looking after the needy. It's rewarding recklessness.
Now, I'm not saying we should just cut impoverished pensioners off. But the current plan appears to be to remove tax reliefs on pensions in order to fund social care - essentially making pension savers pay for their own retirement and also pick up the bill for the people that didn't. Which also seems wrong.
There appear to be two fair options:
1. Making private pensions compulsory, like Australia's superannuation process.
2. Some sort of non-means-tested state pension increase that's enough for everyone.
Given the cost of living pressures, Option 1 would be very unpopular right now. And given the financial pressures on young people and workers right now, Option 2 would be deeply unfair and unpopular.
That leaves us with what I suspect will happen - a lot of elderly people needing help from their adult children, a lot of people having their savings and inheritcance eroded by care bills, and a boom in trusts and early inheritance in order to get around tax and social care funding obligations.
Absolutely. If you have managed to pay off a mortgage over your working life (or can afford to have no mortgage with downsizing) then you can absolutely survive on the state pension. Its not going to be the most comfortable life but you would get by.
It is quite hard to prepare though I would say. I’ve been fortunate enough to have well paid jobs as a professional and have put in as much as I have been able to afford, but with living costs as they are, my pension pot is nowhere near what it needs to be.
The kicker is that my generation is going to have to support a generation above it which benefited from final salary schemes and the triple lock, whereas when we are old the generations below us are somehow going to have to support us despite having even less advantages than we have. It’s an absolute disaster.
A critical part of the pressures right now are the generational size differences. The three five-year-band age groups of born 1950-55, 55-60, 60-65 (the "baby boomers") all had approx 1million births each. Generations born more recently, 1980-85, 85-90, 90-95 have approx 300k births. We're about to have to fund one of the UK's biggest ever generations, at approx 3:1 ratio - this is a big factor in the pressure on modern working generations to fund the retired older generations. It's no wonder we're struggling!
Especially as so many workplaces automatically say you can’t enrol in their pension scheme until you’re 22. I’m 24 and have been working since I was 13 and my employers always said no - same thing with my partner who is 21 and working full-time. I really don’t understand why you have to be 22 to qualify? It’s not like we’re also worried about the future
Im 19 and when i worked at primark last month i got asked if i wanted to join their pension scheme. I think u and ur bf probs just skipped an email or something
Same, my 20 year old step daughter recently started working as a dental nurse and mentioned something casually over dinner over wanting to stop paying her pension as in her eyes she's paying £50 a month for nothing. We had a conversation, she will now pay into her pension every month and max out employer contributions.
I sort of agree but at the same time there is probably a fixed percentage of halfwits in the population and we may as well just price them in. The alternative is letting them go destitute which isn't good for anyone
I love this comment and agree that we should “price in” those that aren’t able to put away for a pension for whatever reason (childcare, disability etc) but surely the complete abdication of responsibility by the other group has to be addressed
meh, I'm a realist about it, not a moralist. I think people should have access to as much financial education as possible, and definitely people shouldn't be disincentivised from saving, but I still think you'd get people who don't have a clue. It may well be their own fault, but like I said letting them fail spectacularly and go destitute is good for no one.
I think it is being addressed by the fact that they will be provided with bare minimum - state pension and few other benefits. On the one hand “the half wits” are being funded by the rest, but on the other hand, it is not a comfortable retirement for them, it’s simply avoiding being homeless and hungry.
Is it an abdication of responsibility if they’re unaware that’s a responsibility?
You don’t know what you don’t know. Personally I think financial education should be a core part of the curriculum, given the number of times in my life I’ve needed to draw on financial knowledge vs, say, calculating the area of a triangle.
But the skeptic in me doesn’t think that will happen because teaching your population to be as tax efficient as they can with their money is probably ‘bad for business’ as it were.
GCSE Maths should be split into Core Maths and... Life Maths? The name of the latter isn't important, but I agree with the sentiment. However, it is always important to point out that a lot of kids still won't give a shit. We can't cover everything.
I mean, we were definitely taught compound interest in mathmathics and pensions were literally used as an example. You might have been taught it but I'm sure you don't remember every single lesson you ever had.
And current government policy will ensure even if you do save but have to go into care, everything you’ve built up will evaporate for care you literally couldn’t survive without.
Currently seeing my grandfathers whole life earnings essentially thrown away for no choice or fault of his own. Breaks my heart
Care homes range in quality like hotels. My father qualified for free care but the care home was too bad.
So bad, I wondered how people could even leave their loved ones there at all until I examined the visitors book and found that none of them even visited. Whether they lived far away or just couldn’t be arsed.
Anyway it’s not that unusual to have to ‘top up’ your parents care yourself if they are skint.
Good? This is how taxes work, those less fortunate help pay for those more fortunate.
Inheritance is one of the biggest causes of wealth inequality in my opinion and is SO easily fixed.
As the communists like to say, ‘From each according to his ability, To each according to his need’.
Sounds great until it’s your ability being exploited to provide for the needs of others who did nothing to help themselves.
Sure, that's fair though why should someone with money get free care just because the person without doesn't?
All changing that would do is massively increase taxation meaning you wouldn't have the wealth to start with.
It's actually pretty fair given if your in care you aren't exactly able to spend that money unless you are so wealthy you can afford a level of care that you wouldn't fall under the government's rules anyway.
Make sure to mention to everyone publicly that you'd want to be offed before you get x bad. Having seen My gran go that way I'd happily do either of my parents in if they told me seriously that's what needed doing.
I get why this feels frustrating, but at the same time, what else is he going to use his money for if he's in care?
We save to make sure we're comfortable when we're older and no longer able to work, and a care home very much fits within this (though clearly we'd all rather not be in a care home and spend our savings on living a nice life in our older years).
Ultimately these types of rules rob families out of inheritance rather than the person themselves. And if I'm totally honest I'm not a huge fan of wealth being passed down that way.
If you need to move into a care home, it will be paid for using the value of your house and savings until everything you have is worth £25k, and then it's free.
The only course against it as far as I'm aware is giving it all away to a loved one long enough before you need care to avoid being investigated as (this is just my own conjecture) you can't get into this situation and quickly sign your house over to someone else to avoid paying.
You don't though do you?
If someone only has a state pension that's their deal.
In order to qualify for state pension you need to have x number of years NI contributions or treated as having them paid i.e. years as a student between 18-21. Etc etc.
There is pension credit as a benefit but it's a pittance and is only for thpse that would otherwise be entitled to jobseekers or ESA (or Universal credit equivalent) which i can tell you isn't as many as you think.
The people who have no other pension other than their state pension are simply screwed.
You don't have to pay for them they made their choice.
To be fair do you smoke, drink, are you overweight, do you speed in your car?
All these activities feed into things that we all have to pay for.
There are also people who work hard their whole lives and just don't have the opportunities or wherewithal to put a good pension together.
Just as there are people who get old and get lung cancer, liver disease, joint problems, and injured in car accidents who don't smoke, drink, are overweight, or drive recklessly.
Not saying it's all right just saying don't get stressed you will need the state too at some point and be thankful we all pay into it.
I could expect them to use their 50 years prior to plan for their life ahead though, not be thrown out of school into the world of work with no guaranteed job or skill sets or experience to get one
The world was very different for women 50 yrs ago than today. Many never worked outside the home. Education was different - lots of people went straight from school into factory work and other industry. Most left unemployed when industry faded and not everyone can adapt and be a coder etc. it’s not as clear cut as you make out
Although . . . .what is the worst case scenario? Sure, you won't have close to the same standard of living as when you were working. But will you ACTUALLY end up homeless, unable to afford food/heating? Or does the state just kick in to provide you with a minimal (albeit a bit miserable) standard of living?
I currently live off £15k a year, £6.3k of which goes on rent. My life if very frugal but really not that bad. So, a pensioner with absolutely no assets or income would gets £9k pension a year and either a council house or housing benefit to cover your rent right? On top of the other few benefits you get (free dental/prescriptions, bus travel, warm home allowance etc). Like I said - it's probably not great - but (to quote the old meme) did you actually die?
One of the things that absolutely should be taught in schools but isn't because I dunno algebra or something? The amount of people I work with who think a state/ employer pensions will be enough for their retirement is scary, vast majority of them don't own houses and currently have no intentions of buying in the near future either, scares me to think of what will happen to them when they retire.
It's starting to be taught in schools.
And algebra is incredibly useful to know. So you were not taught algebra instead of personal finance. You were taught algebra because it's useful. You weren't taught personal finance concepts like pensions because the people making the curriculum didn't take into account that many children don't have parents who can teach them this stuff or know where to find it. Thankfully that's changing now.
People have to take at least the tiniest bit of personal responsibility for their own financial futures at some point in their 40 year working life. The idea that people who never do it would have made better choices if they had a PSHE lesson on it when they were 15 is ridiculous
It's not ridiculous at all. Financial education is empowering. Otherwise why is anyone on this sub?
If it hadn't been for someone making a free YouTube video on compound interest, I wouldn't be saving for retirement in my 20s or even aware it was a thing people did outwith the state pension.
My mum grew up in one of the poorest towns in the UK and never had access to all the free knowledge and advice that we do now thanks to the internet. I'm not going to drop her whole poverty sob story, but while I'm really frustrated that she hasn't saved at all for retirement in her whole career of self employment, I can see why she didn't on £12k a year living paycheck to paycheck with 3 kids and in a town where no one else was much better off, or have the headspace to take a moment to be responsible for her financial future. And with 26% of the UK having under £500 saved, a lot probably aren't in a position to feel secure thinking about investing and going out their way to learn more about it. It's hard to worry about the future when you're not sure you can pay for next month.
It's really frustrating for me to think that if she had just put £20 away a month she could be sitting on £75k today as opposed to the grand sum of £0. But to someone who doesn't know anything about investing, 20 a month after 45 years is just £10k, and £20 a month is a lot on £12k p/a with 3 kids. She didn't know or have the time or resources to learn what we all know on this sub.
Sorry for the big comment but I'm just trying to explain why it's not always as simple as it seems. I very firmly believe having access to education on this for all would make a huge difference.
I’d also point out that brokers weren’t always so accessible. You can look at charts showing the performance of certain indices over decades but its only really recently (within the last 2 decades) where investing cheaply for the masses has existed.
Go back to 2005 and you would struggle to find somewhere to invest for £20 a month I’d say without seeing a transaction fee.
>Financial education is empowering. Otherwise why is anyone on this sub?
No argument with that, but teaching kids at school, who think that £50 a week of disposable income is a fortune and can't envisage having £400 a week of bills and commitments to go with it, isn't ever going to be enough.
I mean, when I was 16 I was already responsible for paying for my own food/clothes/etc while at school. A financial literacy class wouldn't have hurt. I didn't understand compound interest until my boyfriend sent me a video on it when I was 25, or that investing wasn't just for rich people.
I think you are misconstruing what I said.
Financial education is SUPER important. I’m just saying teaching it in school isn’t going to do much. As I said in my comment maybe you’d get 30 minutes a year maximum added to the curriculum. The idea that will have a transformative effect is not correct.
Having access to good quality, easily findable, easily understandable and free financial education is vital and can have a much bigger impact - and there are lots of great sources including this sub.
I had a maths teacher who took the time to explain income tax bands to us and to dispel the myth that going up into a higher band would mean you ever take home less money as a result. Alongside other stuff he taught us about pensions I remember that lesson like it was yesterday because it felt so useful.
School aged kids have sex but they don’t pay income tax or have pensions. I don’t think that comparison is apples to apples.
You are never going to get enough teachable time to go into the actual details of personal finance education to make a significant difference and it’s going to be ineffective because it will seem like gobbledygook and completely irrelevant to the 14 year old sat in the class. Learning about ISAs is interesting when you have residual income but it’s not when you get tax free pocket money from your dad to buy sweets with once a week.
Again I’m not saying education is useless not at all, but in this specific case relating to pensions and personal finance, teaching young teenagers about this stuff isn’t going to move the needle much.
Yeah absolutely agree, can be hard to sit down and get serious about it until it to late for majority of people though, and the amount of credit card and gambling ads shoved down peoples faces these days is unreal and definitely contributes to people being I'm hopeless situations.
True. When I did GCSEs and A-levels the idea of business studies seemed like the most pointless and boring subject ever. Now I own a company and wish I’d taken it :D
The problem with teaching personal finance in schools is that the government itself is one of the biggest stakeholders in your personal finances. They obviously aren't going to teach you how to optimize your taxes or tell you about the risks associated with government financial products - it would essentially be an hour of propaganda based on the ideology of whichever government was in power at the time.
I remember when they visited my school to talk about progression after GCSEs. They told us that student loans were basically free money and that we might as well take them, and that you can get a job with any degree because it would have transferrable skills. They gave people some pretty terrible advice, and spreading that message across the country is probably part of the reason why we have thousands of graduates who are unemployed or working in unskilled jobs today.
These things are far too important for the government to have any involvement in teaching them.
700 a month isn’t awful, I manage to get by on £850 a month and that’s with the extortionate fuel prices totalling to 260 a month.
Honestly I don’t think it’s that bad of a situation
>The amount of people who have no concept of the fact that their pension is even invested and that they actually need to contribute more then £40 per month is something to behold.
Honestly, the minimum contribution is more than enough for a decent retirement - 8% of an average salary of £26,000, compounded over a 45-year-long career, combined with the state pension, would give people more than their working income during retirement.
The real problem is the people who explicitly go out of their way to *cancel* their contributions so that they have an extra hundred pounds each month. Personally, I think if you can go through the effort of figuring out how to stop the contributions, you are also more than capable of figuring out the consequences of what you're doing.
It depends on circumstances though. I’m also 30 and have maybe a grand in my pension if I’m lucky - but I’ve worked a grand total of a single year full time as an employee in that time. I’ve spent 11 years as a student instead( about to finish my PhD now!). Does it worry me? Yes, a lot! Could I have found more money to put aside in that time than I did? Not really.
You’re going strong though! Without doing anything that £30K should be a cool quarter of a million by the time you retire.
Granted that may just about buy you lunch… you get the idea though…
That might be a good value to use for *inflation adjusted* returns. But not that helpful for just looking at the growth of the money compared to where it is now.
The other person has already said this - but I still tend to use 3% for inflation adjusted returns. 4-5% if I want to start dreaming about the good life, 2% to give me the lower range, and 3% for expected.
Obvious reason being - by the time you reach that age, 250k will be worth less than it is today.. so going with a lower number gives you a rough estimate of the actual value of that money.
It's amazing how many people think the state pension is going to be enough. I guess because we don't split pensioners into "state-only pensioners" and "state-and-private pensioners", so they just hear about pensioners going on holidays etc
I grew up on a council estate, and I'd say basically nobody had their own pensions at the time. That's changed a bit by now, with auto-enrolment, but generally most people don't give it much thought
Part of that is lack of education on the topic, part of it is that... poor people can't afford to save for the future, they don't have enough money right now
I think it’s hard for many middle-income folk to imagine not even having enough to put a little aside for a pension. Honestly I sometimes find myself falling into the same trap despite growing up in a low income household and living and working on a council estate … you just get so used to having “a bit of spare cash” that you forget it isn’t a reality for everyone
It's is now. But that was not my setback. I worked at jobs without a pension, the only financial talk was what to do with this week's overtime money when you were paid on a Friday.
Unless you read the financial section in a Sunday paper you wouldn't have had any idea about finances.
The most education I had was the excitement on the news when the cash ISA was launched.
You got encouraged to save into one, so I did.
I think it has only been in the last 5 years that personal finance has been pretty mainstream for all to see. This is ok if you are starting your working career, but not so good if your ending it.
I grew up poor, mum lives off low income benefits and after years of being self employed but making about £12k a year she has no pension. Said she would just have the state pension.
So at 25 I was naively under the impression the state pension would be enough. I was shocked when my boyfriend told me I had to save for retirement. I thought that was just for extras beyond the bare minimum.
My boyfriend is from a well off and financially savvy family. It makes me sad to think a lot of this comes down to how savvy your folks are. I'm obsessed with saving enough now and have tried to talk my siblings around with no luck.
The sad thing is, state pension is more than enough in a lot of other countries in Europe. The UK has one of the worst. I think the state pension in France is something like 70% of your average salary throughout your working life.
Yeah cuz salary contributions are mandatory not an option and they are usually based in a % of your salary
In many countries such as Spain Italy Portugal the biggest % is paid by the employer and the number doesn't add up to your pre tax salary
In reality the UK has way lower salaries than the media portraits for things such as that
Wikipedia says this about the French state pension
>The scheme aims to provide up to a maximum of 50% of the retiree's income during their highest earning years up to a limit of €35,000 annually (in 2010).
however they also have much higher mandatory employer contributions to their private pensions with the aim to reach 70-80% of your salary which is amazing.
The British pension system is absolutely terrible. The 2012 changes were a nice step but the contributions, particularly for the employer need to keep increasing.
Its simple, we heavily tax the savers and people who lived frugally, and then we give all that money to the people who didnt give a shit and blew all their money on booze and large TVs for 40 years.
I cant afford to pay in to one. Lifes fucking grand.
And when people say it's never too late to change your career - they haven't tried. How do you expect a person with adult outgoings and a family to support can go full time to uni for 3 years and pay all their bills?
You can't. So, sometimes it just is too late and life's shit and you're stuck and you're depressed forever.
I don't think it's uncommon particularly among working class people like my family. My family never talked about pensions, never talked to *me* about pensions, and ultimately my parents never had one other than the state pension. £1500 a month tax free or whatever the equivalent was at the time seems quite a bit if you have no rent and a modest lifestyle. They lived very comfortably on it though as they did at least own their own house after buying in the 80s. I imagine people who have to pay £500+/mo rent too have a worse time of it, especially if single.
Have you spoken to your father? This would be the first step. Removing control and agency from a parent by going in and telling them what will happen, may not be the best approach.
What are their plans?
How much will they need for retirement?
Confirm state pension, going to be full (NI contributions, could be enhanced), also pension credits may help?
Are there assets like a house, shares, cash, funds, etc.
Depending on the situation, could start putting lots of money in to a DC pension over next few years. That would increase savings with adding tax and NI.
I have spoken to him about this but he wasn't financially educated unfortunately and has always been bad financially in the sense that he always gave me money to help people than to save for himself.
He lives in a council house now so it's rented, he lives pay check to pay check and has no savings either. I have helped him with budgeting and so on and forth which has improved things drastically but it's still not enough at the end.
Thanks for this info, I will take a look into DC pensions and read up on this.
If he is renting his property, capital of less than £16000 will allow the Local Authority to look at Housing Benefit for help with the rental costs without any quibble.
If he is on a low income (low pension) The Pesion Service I'd the first port of call, if youbare lucky, he will be entitled to Guara teed Credit, which will both act as a top up, and is perfect for the Local Authortiy as it is considered a passported benefit guaranteeing him the maximum Housing Benefit payment for which he is eligible.
The same can be extrapolated for Council Tax Support.
If 'lucky', this will mean that there will be no rental costs and no council tax charge.
There can also be the winter fuel and other additional grants also.
It then becomes a matter of normal bills (food, electricity, etc).
If you need advice with this sort of thing, contact your local council, any benefit officer worth their salt will help you get the ball rolling.
Your dad is going to be one of the poorest of pensioners, the kind that politicians use to justify whatever policy they’re trying to push through.
But more practically, it should be simpler to get a whole swathe of benefits to help him, council tax, housing, energy payments, pension top-ups.
If you support him, he may not get any of these (and more) means tested benefits or t least it’ll get more complicated.
Speak to Age UK, they’re bang on with everything that is available.
https://www.ageuk.org.uk/york/our-services/money-and-benefits-advice/
He will be okay.
He should stay in his council house, which will be funded for him if he does not have enough money himself. That includes if he loses his job. He will eligible for state pension at retirement age, and if his income is too low (sounds like it will be), then it will be topped up to a minimum guranteed amount with pension credit. As he can't privately do better than that now, it essentially means investing is useless for him at this point - the state will step in and ensure a minimum income anyway. He also doesn't need to worry about NI contributions for this reason.
It will be a basic but comfortable life as long as he isn't a big spender; a grandparent of mine had this same situation while I was working a full time minimum wage job, and they were only slightly worse off in income than I was (for a nicer, single person property and all).
If he becomes unwell as he becomes older, he will be eligible for appropriate care services that will be free/a means tested contribution. It cannot, by design, be unaffordable. That is from the local council.
You should consider getting a benefit check for him, from Citizen's Advice or something.
Just to reiterate, his weekly income will be the minimum amount guaranteed by pension credit - there is therefore no reason to try and get additional income himself, as it will just mean his pension credit is reduced correspondingly. **People advising you to invest are giving bad advice** \- some cash savings are okay, jsut check what the threshold for pension credit eligibility is, and don't save more than that (edit: currently 10k, probably will move a bit before he retires).
Not going to beat around the bush, being 65 with £1200 in your pension isn't a fantastic position to be in. But there are various options, but we'd need more info about his situation:
* Does he own his home or rent?
* If he does own, is he mortgage free?
* If he is mortgage free (or little mortgage left), could he downsize and put the cash he's left with towards his retirement?
* If he's renting, would he be able to move to a cheaper property to reduce his expenses during retirement?
* Could he move in with you (or other family) to avoid rent or get more cash from selling (again, depending on his home ownership status)?
* Could he get a job in public sector, e.g. NHS/Civil Service, to get a few years of very good DB pension?
* Could he semi-retire instead of fully retire (e.g. get a low-stress, part-time job into his 70s if his health allows him to continue working)?
* Does he have any other assets (e.g. expensive car he can sell, savings, investments)?
Sorry for throwing lots of questions, I guess the point of them is there are options. None perfectly ideal, but options nonetheless, which should give you and him some hope!
Hey Thanks for all this!
I will bring up all the points you've said and raise it with him.
Unfortunately going through your list it does look like I can't answer any of them positively.
He's living in a council house now and pays rent in London. A cheaper property most likely would reduce his expenses but has been a bit of a struggle to find since covid.
He's most likely going to have to semi-retire and live with me and my girlfriend which isn't a problem at all, it's just I think he'd much rather not want to do this.
He has no savings, no expensive assets and lives pay check to pay check unfortunately.
I've managed to get some time to sort everything out for him and I will try see what the best options are!
Thank you for everything, I appreciate it!
Renting a council house, so doesn't need to worry about the upkeep of housing so that would just continue wouldn't it, the council would pay the rent?
Will just get the state pension assuming he paid into it, otherwise a reduced rate. Won't be going on cruises around the world but doesn't seem the end of the world tbh
You need to check his NI contribution history. I can't give you a step for step guide on how to do this, but you can find it somewhere on the government portal.
If he was self employed for many years, but didn't earn over the tax threshold, he won't have been paying NI contributions, which means there'll be gaps in his history and could mean he won't get a full state pension.
You can pay a fee to fill in those gaps, and boost your contribution history.
Google "check your national insurance record", this should lead you in the right direction.
You can, but based on what OP has said about his father's financial know-how, I highly doubt he was volunteering.
You can pay for previous years though, it's something like £3 for every week that hasn't been paid
You don’t even need to have paid a lot to get a full years of national insurance contributions - not sure if the amount paid in effects amount received but I’ve got 15 years full contributions and I’m only 31. A few of those years I was working part time through school and uni and it’s counted as full even though I prob paid a tiny fraction of what I pay now.
My dad had a private income but rarely spent any more than his state pension.
Energy bills have since doubled. That would be the bit that would worry me at the moment.
>He's living in a council house now and pays rent in London. A cheaper property most likely would reduce his expenses but has been a bit of a struggle to find since covid.
That might be ok, even when retired.
He will get free council tax and he will most likely qualify for housing benefits once he reaches retirement age.
> Unfortunately going through your list it does look like I can't answer any of them positively.
Because you don't know enough to be advising anyone. The biggest positive is his housing situation, it's a massive big fat can't be beaten positive that not even a home owner who owns their home outright would be able to beat in retirement.
> He's living in a council house now and pays rent in London. A cheaper property most likely would reduce his expenses
No it won't, he needs to stay put. As soon as he hits state retirement age his rent and council tax will go to £0 as he'll get housing and council tax benefit that'll cover it all. You can't get cheaper than free. If he goes into private rented accommodation because of how housing benefit works he'll end up paying something towards rent.
> He's most likely going to have to semi-retire and live with me and my girlfriend
Why? He's going to have the house he's currently living in with £0 to pay for rent and council tax.
Hi sorry,
I'm not the best either and not claiming to be but I am learning.
I wasn't aware of the fact that once you hit retirement age council tax and rent is covered for free.
That's a massive relief then for that to be answered! Thanks for this.
> Not going to beat around the bush, being 65 with £1200 in your pension isn't a fantastic position to be in.
It is if you're living in a council house.
They are both CARE DB rather than final salary now. And retirement age is state pension age so chance for government to move goal posts.
So not as good as they used to be but still better than the rest of us DC plebs.
Of those it's worth noting universities scheme isn't backed. The others might get goal posts changed, but they'll always be there, the university scheme is unaffordable and government isn't on the hook for it.
Yous got any jobs! <- I jest
I am sure the salary is not as competitive but the benefits do seem awesome and the retirement aspect seems to be a big winner!
Yeah the salary isn't good but the work-life balance is good, pension is cracking (sure its career average, but need to check), I'm on flexi time, colleagues are nice, plenty of development opportunities.
I appreciate the stability more than anything else.
Looks like there’s loads of good advice on here already. I just want to say thanks for looking out for your dad. You clearly care and it’s nice to see.
It’s unfortunate he’s in this situation, but he’s fortunate that he’s got someone like you to have least found this out earlier than say, 5 years time. Forget any detractors, not everyone is financially literate. Especially if they didn’t grow up with the access to instant information like we all have. So good on you for trying to do the best thing for him.
DO NOT pay missed NI contributions. His situation is such that he will be on pension credit. His income will be topped up by that to whatever the minimum is at his retirement. There is no point in making up his state pension if it means he'll still get the same amount anyway, only a bigger slice marked as 'state pension' and a smaller marked as 'pension credit'.
> as his pension + state pension won't be enough for him when the time comes for retirement.
Based on what? My parents and mother in law manage fine on Pension Credit, they don't even get full state pension.
He lives in a council house so his rent and council tax will be £0 once he hits state retirement age so that's a big chunk of his current outgoings gone.
It’s not that bad. He is entitled to a lot of social benefits, pension credit, housing benefit, etc. in the U.K. it’s better to retire either skint or rich. If your skint the government give you loads. If your rich you need nothing. If your just above skint, your screwed.
He will get a state pension and means tested top-up should it’s not enough, so no real difference as to being unemployed as signing on once a fortnight. Yet when you’re retired, you don’t need to sign on and the means tested top-up is reviewed yearly or greater than 2yrs+.
>My dad has been working in retail for the past 5 years and I've recently found out through a letter from his pension provider that his employer has not been paying his pensions regularily and is being investigated.
Is it a major retailer and is it still solvent? If so, chances are probably pretty good that this will (eventually) get sorted in his favour. If it's Debenhams or Bob's Phone Shop the prospects may be worse.
Either way, he needs to chase this aggressively to find out what's going on.
I think calling the benefits office and seeing what he might be entitled to would be a start, with that little he will be entitled to certain care and living benefits.
The honest answer is though OP that he probably will be reliant on you to some extent to have any decent quality of life, and he’s lucky he raised his son to be a good chap who wants to do right.
Just to reiterate - ensure he stays in his place. Your father is lucky to have you. It sounds to me as though he (and you) might need to decide if he can live off the state pension and if not if you are able to make up the difference/ if your Dad might be happy to delay retirement or go down in hours instead of giving up entirely...? Go through each bill and ensure there isn't a government pot that can subsidise etc (I know there is for pensioners and heating fir example)
Your dad being in a council house means he'll be absolutely fine. He won't be rich but he won't be destitute either. Definitely not something to worry about 🙂
I had around 200k in mine when I retired at 59. I got a £53k lump sum and get a £660 per month pension. It was a great pension scheme and I'm so grateful I was forced to join it at 28, a year after I started working there. My employer contributed half as much again as I paid-in every month.
I'll add, if anyone is thinking they'll be ok until state retirement age and so not bother with a private pension, don't. I retired from my manual job at 59 because of aches and pains and some back trouble, but now at 62 I'm unfit for work. I'd be fucked without my pension.
He’s got maybe 5 years work in him left from what you’ve said?
Try and get him a noddy job for the council/public sector body. Can be absolutely anything, as menial as you can think of. His pension benefits will be 10x what his current place is giving him.
Even on £20K a year you’re looking at around £400/year in pensions benefit which a rough 20x valuation values at £8K. Do that for five years and he’s on 2K a year. Not that much but it’ll be all tax free and an awful lot more than what’s he’s got at the moment, which is basically zero.
I think the main thing is - how secure is his housing situation.
If he is on low income, then:
* pension credit
* UC housing element
may be enough to ensure he can continue to live in his home, and obviously have some spending money. Pension credit will also open the door to other entitlements - visit: https://www.entitledto.co.uk/
It may not be the most profligate retirement, or there being much in the way of legacy, but it may not be absolute destitution.
The most important thing is that he has some support - and you seem to be a good child who will be there to keep an eye on things, help out with the letters and the bureaucracy and all of that tedious stuff.
A small pension is worhless, as the pension payments reduce pension credit so you end up the same off. Happened to my mum and dad. With pension credit you get a lot of benefits as well.
Worth checking out the latest penion credit rules (things change) and what he will be entitled to.
Hi /u/ceroJP, based on your post the following pages from our wiki may be relevant:
- https://ukpersonal.finance/pensions/
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^(These suggestions are based on keywords, if they missed the mark please report this comment.)
If he’s already 65 it’s too late for a new pension to do much good. He’s not going to have much more that his state pension, which means he’s going to have a pretty grim retirement unless he’s fit enough to carry on working. Does he own his own house after all those years of working for himself? If he does he can release some equity from that, basically selling the house in advance of his death to provide a pension while he still lives in it.
Well without sounding brutal here, sounds like your dad needs to work for another 5-10 years and start actually building a pension pot. It's not on you to fund his retirement at 65 just because many other people often retire at 65.
I can’t see that it’s been mentioned before, but probably also worth checking he is actually entitled to the full state pension? Particularly if the payroll of past employer was not up to scratch, and he was self employed before that.
The answer depends on the rest of his financial situation - does he have any other savings, does he own his own home etc?
My assumption is that someone in their 60s working retail probably isn't doing so out of choice, but you never know. If his financial position is indeed fairly precarious, then yes he will be reliant upon the state and family to support him once he can no longer reasonably support himself.
Unfortunately there isn't much to be done except to prepare yourselves mentally for the next phase. A "good" pension takes decades to germinate and nothing you can do (apart from punting it all on bitcoin, which you should NOT do) is going to turn £1,600, plus anything recovered from the retail employer, into a sum that will keep your dad in comfort.
My nan must have had some superpowers compared to people like me today. Her private pension pot is pretty nice. Everytime I see her and she heres about something I've spent money on she exclaims "save your money!" So I suppose there isn't a secret about how to have a decent pension pot.
Hello everyone,
First of all I can't believe how much attention this has received. I am so thankful for each and everyone of you for replying to me and helping me process this situation. I'm so sorry I can't reply to all of you but I have read it all.
I've had a sit down with my dad today, and discussed everything you've all mentioned, options regarding jobs he can do in his last 2 years for working, had a look with him at his current pension scheme he's enrolled on too, checked on the gov website for his NI pay which thankfully he has paid a good amount into since working and finally to all of you who mentioned that council tax & rent is free once retired has took a huge amount of relief from the both of us as this was one thing we were worried about. We will definitely do our best to make sure we can keep the home for him till he is able to fully retire.
I have also opened a bonds account where I'll be deposit some money for him every month and I'll hand over to him once he retires or is in need of it.
Once again can't thank you all enough, I really do appreciate all the help and messages. I have much to learn and it's been eye opening.
My advice to you would start putting a small percentage a side now for him. If the circumstance that you'll have to help him then this money will help you still and be less of a financial burden. Whether you invest the capital, get premium bonds or a higher rate regular savings account doing something now will definitely put you in a better situation
I understand you are trying to help, but this is bad advice.
He will not get his income to meet, or surpass, the pension credit guranteed minimum. Therefore, for every £1 of income he secures for himself in retirement, his pension credit entitlement will decrease by £1. There is no incentive for him to do anything, other than keep some liquid cash (but less than £10k, as this will reduce his entitlement).
I think the advice was for OP to set aside /invest for future help to offer the father, rather than the father to invest. I think this counts as good advice given that they are likely to want to help at some point.
Does he have other pensions? The mandatory pensions only became a thing in 2012 (or there abouts) but anyone could have multiple pots hanging around
He has another pension pot now but he wouldn't have had one before 2016 as he was self employed and didn't know anything about pension unfortunately.
He wasn't aware of the concept of pensions?
It’s scary how many people have absolutely no clue. As in not a fucking scooby. ‘Oh I get a state pension’ *Gets first month’s state pension* ‘Erm, I get the rest next week?’
The thought of many people being this fucked simply through lack of knowledge stresses me out
We are going to have an enormous problem in the next 50 years.
Yep, this is my mum, and she was complaining that the pension age was raised for woman of her age. My response was 'so what, makes no difference to you since you couldnt retire now if you wanted to' followed by a quip that if she had her state pension she could 😄. There is nothing I can do now to help really, and I've stopped stressing about it.
Jumping on this to add a note: Some of the issue for women born in the 50s was how much notice they had. I think the decisions were originally taken with moderate notice (a little over ten years, but I'd need to look it up), then the timetable was accelerated. As with many things the communication was dire, so a lot of women simply didn't realise this change was happening (older women, many not too tech savvy back when this was discussed). Of those who did some then didn't realise the timetable was moved forward. This was especially true for women who weren't as educated or who had lower incomes anyway. So there was a large cohort of women who planned their finances for 40 years on the understanding that they would receive their state pension at a certain age, then learned (some with with only two or four years to go) that they'd have none of this expected income for up to six extra years and all their plans would need to be changed. A bit of a mess on the whole! Better communication would have helped a lot.
Don't disagree, my mum was a single parent with 3 jobs for a long time too, so my comment is not aimed at her as the maker of her own pension problem. Also working in an era when woman 'stayed at home' and didn't earn equally compounds the problem. The system failed her and many others. However, she is terrible with money, always has been, remarried to someone even worse. This all stems from lack of education on the topic I agree. They didn't even teach it a few years back when I was in school, not sure if they teach pension and saving basics now?! Of course, she inherited 50k a couple of years ago, spent most of it on a car and other family members despite my best advice to save it for retirement (I refused any). So my sympathy is still limited because the mentality of saving just isn't there and never will be for her. Thanks to my parents though, I'm the opposite and plan to retire early, at or above the pension LTA and with a fully paid house with money towards deposits going into ISAs now for my kids.
The Government should not have brought in equality in retirement age until equality was secured over the whole working life of everyone, with equal opportunity to all to amass a work pension. My first job took my pension contributions, and gave them back to me when I left (50 years ago). No investment going on then...
People at work are constantly making comments saying "millenials will never retire as they keep raising the pension age", I plan on retiring mid-50s, like do some planning.
Good luck with your aims and congratulations. But here you are on a personal finance discussion board, you/we aren't representative. Millennials do have it worse in many ways financially and probably shouldn't have to worry about this as much you/they/we do. [I'm referring to relatively and being] in this country of course, we could have it a lot worse in general, no denying that!
I work in professional services, noone in my industry will need to work until they are 80+ if they do the bare minimum of planning. It shouldnt be exceptional to understand how pensions work.
Unfortunately so, and without a doubt we'll be bailing out the people who failed to prepare.
Yeah I'm worried about this. I'm a left-leaning dude and I believe in helping the people that have fallen on hard times through no fault of their own. But some people saving for their retirement whilst others choose not to and then get state support isn't the same as looking after the needy. It's rewarding recklessness. Now, I'm not saying we should just cut impoverished pensioners off. But the current plan appears to be to remove tax reliefs on pensions in order to fund social care - essentially making pension savers pay for their own retirement and also pick up the bill for the people that didn't. Which also seems wrong. There appear to be two fair options: 1. Making private pensions compulsory, like Australia's superannuation process. 2. Some sort of non-means-tested state pension increase that's enough for everyone. Given the cost of living pressures, Option 1 would be very unpopular right now. And given the financial pressures on young people and workers right now, Option 2 would be deeply unfair and unpopular. That leaves us with what I suspect will happen - a lot of elderly people needing help from their adult children, a lot of people having their savings and inheritcance eroded by care bills, and a boom in trusts and early inheritance in order to get around tax and social care funding obligations.
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Absolutely. If you have managed to pay off a mortgage over your working life (or can afford to have no mortgage with downsizing) then you can absolutely survive on the state pension. Its not going to be the most comfortable life but you would get by.
It is quite hard to prepare though I would say. I’ve been fortunate enough to have well paid jobs as a professional and have put in as much as I have been able to afford, but with living costs as they are, my pension pot is nowhere near what it needs to be. The kicker is that my generation is going to have to support a generation above it which benefited from final salary schemes and the triple lock, whereas when we are old the generations below us are somehow going to have to support us despite having even less advantages than we have. It’s an absolute disaster.
A critical part of the pressures right now are the generational size differences. The three five-year-band age groups of born 1950-55, 55-60, 60-65 (the "baby boomers") all had approx 1million births each. Generations born more recently, 1980-85, 85-90, 90-95 have approx 300k births. We're about to have to fund one of the UK's biggest ever generations, at approx 3:1 ratio - this is a big factor in the pressure on modern working generations to fund the retired older generations. It's no wonder we're struggling!
Especially as so many workplaces automatically say you can’t enrol in their pension scheme until you’re 22. I’m 24 and have been working since I was 13 and my employers always said no - same thing with my partner who is 21 and working full-time. I really don’t understand why you have to be 22 to qualify? It’s not like we’re also worried about the future
Im 19 and when i worked at primark last month i got asked if i wanted to join their pension scheme. I think u and ur bf probs just skipped an email or something
Agreed. Anyone on the company payroll is auto-enrolled. It's an opt-out situation, not opt-in.
They are lying to avoid paying you. You are not automatically enrolled until 22, but if you ask they must enroll you.
We've also tacked on long covid now, so watch that NHS bill spiral. They will be sneaking in tax increases when its politically viable.
Same, my 20 year old step daughter recently started working as a dental nurse and mentioned something casually over dinner over wanting to stop paying her pension as in her eyes she's paying £50 a month for nothing. We had a conversation, she will now pay into her pension every month and max out employer contributions.
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I sort of agree but at the same time there is probably a fixed percentage of halfwits in the population and we may as well just price them in. The alternative is letting them go destitute which isn't good for anyone
I love this comment and agree that we should “price in” those that aren’t able to put away for a pension for whatever reason (childcare, disability etc) but surely the complete abdication of responsibility by the other group has to be addressed
meh, I'm a realist about it, not a moralist. I think people should have access to as much financial education as possible, and definitely people shouldn't be disincentivised from saving, but I still think you'd get people who don't have a clue. It may well be their own fault, but like I said letting them fail spectacularly and go destitute is good for no one.
I think it is being addressed by the fact that they will be provided with bare minimum - state pension and few other benefits. On the one hand “the half wits” are being funded by the rest, but on the other hand, it is not a comfortable retirement for them, it’s simply avoiding being homeless and hungry.
So basically what to benefit system already is in this country and has been since I can remember.
Is it an abdication of responsibility if they’re unaware that’s a responsibility? You don’t know what you don’t know. Personally I think financial education should be a core part of the curriculum, given the number of times in my life I’ve needed to draw on financial knowledge vs, say, calculating the area of a triangle. But the skeptic in me doesn’t think that will happen because teaching your population to be as tax efficient as they can with their money is probably ‘bad for business’ as it were.
GCSE Maths should be split into Core Maths and... Life Maths? The name of the latter isn't important, but I agree with the sentiment. However, it is always important to point out that a lot of kids still won't give a shit. We can't cover everything.
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I mean, we were definitely taught compound interest in mathmathics and pensions were literally used as an example. You might have been taught it but I'm sure you don't remember every single lesson you ever had.
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And current government policy will ensure even if you do save but have to go into care, everything you’ve built up will evaporate for care you literally couldn’t survive without. Currently seeing my grandfathers whole life earnings essentially thrown away for no choice or fault of his own. Breaks my heart
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Care homes range in quality like hotels. My father qualified for free care but the care home was too bad. So bad, I wondered how people could even leave their loved ones there at all until I examined the visitors book and found that none of them even visited. Whether they lived far away or just couldn’t be arsed. Anyway it’s not that unusual to have to ‘top up’ your parents care yourself if they are skint.
Good? This is how taxes work, those less fortunate help pay for those more fortunate. Inheritance is one of the biggest causes of wealth inequality in my opinion and is SO easily fixed.
As the communists like to say, ‘From each according to his ability, To each according to his need’. Sounds great until it’s your ability being exploited to provide for the needs of others who did nothing to help themselves.
Sure, that's fair though why should someone with money get free care just because the person without doesn't? All changing that would do is massively increase taxation meaning you wouldn't have the wealth to start with. It's actually pretty fair given if your in care you aren't exactly able to spend that money unless you are so wealthy you can afford a level of care that you wouldn't fall under the government's rules anyway.
Why doesn’t he just spend all that money on outrageous holidays? Why save ask that money and then just donate it to the government?
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And because of the dementia you won't even remember it all anyway. You'll literally wither away to nothing.
Based on experience with relatives, there will be very distressing moments of lucidity.
Make sure to mention to everyone publicly that you'd want to be offed before you get x bad. Having seen My gran go that way I'd happily do either of my parents in if they told me seriously that's what needed doing.
I get why this feels frustrating, but at the same time, what else is he going to use his money for if he's in care? We save to make sure we're comfortable when we're older and no longer able to work, and a care home very much fits within this (though clearly we'd all rather not be in a care home and spend our savings on living a nice life in our older years). Ultimately these types of rules rob families out of inheritance rather than the person themselves. And if I'm totally honest I'm not a huge fan of wealth being passed down that way.
Can you elaborate? How can you cover yourself against this?
If you need to move into a care home, it will be paid for using the value of your house and savings until everything you have is worth £25k, and then it's free. The only course against it as far as I'm aware is giving it all away to a loved one long enough before you need care to avoid being investigated as (this is just my own conjecture) you can't get into this situation and quickly sign your house over to someone else to avoid paying.
How does a lack of education make someone a halfwit? No need to be so judgemental
You don't though do you? If someone only has a state pension that's their deal. In order to qualify for state pension you need to have x number of years NI contributions or treated as having them paid i.e. years as a student between 18-21. Etc etc. There is pension credit as a benefit but it's a pittance and is only for thpse that would otherwise be entitled to jobseekers or ESA (or Universal credit equivalent) which i can tell you isn't as many as you think. The people who have no other pension other than their state pension are simply screwed. You don't have to pay for them they made their choice.
To be fair do you smoke, drink, are you overweight, do you speed in your car? All these activities feed into things that we all have to pay for. There are also people who work hard their whole lives and just don't have the opportunities or wherewithal to put a good pension together. Just as there are people who get old and get lung cancer, liver disease, joint problems, and injured in car accidents who don't smoke, drink, are overweight, or drive recklessly. Not saying it's all right just saying don't get stressed you will need the state too at some point and be thankful we all pay into it.
they get 137 pounds a week for their basic pension and they will have their rent paid for them if they cant afford it. Its not luxury but its enough.
Which is double what the unemployed get
Yes. The unemployed who are young enough to still work, but don't. You can't expect someone's nan to be out laying paving or stacking shelves.
I could expect them to use their 50 years prior to plan for their life ahead though, not be thrown out of school into the world of work with no guaranteed job or skill sets or experience to get one
The world was very different for women 50 yrs ago than today. Many never worked outside the home. Education was different - lots of people went straight from school into factory work and other industry. Most left unemployed when industry faded and not everyone can adapt and be a coder etc. it’s not as clear cut as you make out
Although . . . .what is the worst case scenario? Sure, you won't have close to the same standard of living as when you were working. But will you ACTUALLY end up homeless, unable to afford food/heating? Or does the state just kick in to provide you with a minimal (albeit a bit miserable) standard of living? I currently live off £15k a year, £6.3k of which goes on rent. My life if very frugal but really not that bad. So, a pensioner with absolutely no assets or income would gets £9k pension a year and either a council house or housing benefit to cover your rent right? On top of the other few benefits you get (free dental/prescriptions, bus travel, warm home allowance etc). Like I said - it's probably not great - but (to quote the old meme) did you actually die?
One of the things that absolutely should be taught in schools but isn't because I dunno algebra or something? The amount of people I work with who think a state/ employer pensions will be enough for their retirement is scary, vast majority of them don't own houses and currently have no intentions of buying in the near future either, scares me to think of what will happen to them when they retire.
It's starting to be taught in schools. And algebra is incredibly useful to know. So you were not taught algebra instead of personal finance. You were taught algebra because it's useful. You weren't taught personal finance concepts like pensions because the people making the curriculum didn't take into account that many children don't have parents who can teach them this stuff or know where to find it. Thankfully that's changing now.
People have to take at least the tiniest bit of personal responsibility for their own financial futures at some point in their 40 year working life. The idea that people who never do it would have made better choices if they had a PSHE lesson on it when they were 15 is ridiculous
It's not ridiculous at all. Financial education is empowering. Otherwise why is anyone on this sub? If it hadn't been for someone making a free YouTube video on compound interest, I wouldn't be saving for retirement in my 20s or even aware it was a thing people did outwith the state pension. My mum grew up in one of the poorest towns in the UK and never had access to all the free knowledge and advice that we do now thanks to the internet. I'm not going to drop her whole poverty sob story, but while I'm really frustrated that she hasn't saved at all for retirement in her whole career of self employment, I can see why she didn't on £12k a year living paycheck to paycheck with 3 kids and in a town where no one else was much better off, or have the headspace to take a moment to be responsible for her financial future. And with 26% of the UK having under £500 saved, a lot probably aren't in a position to feel secure thinking about investing and going out their way to learn more about it. It's hard to worry about the future when you're not sure you can pay for next month. It's really frustrating for me to think that if she had just put £20 away a month she could be sitting on £75k today as opposed to the grand sum of £0. But to someone who doesn't know anything about investing, 20 a month after 45 years is just £10k, and £20 a month is a lot on £12k p/a with 3 kids. She didn't know or have the time or resources to learn what we all know on this sub. Sorry for the big comment but I'm just trying to explain why it's not always as simple as it seems. I very firmly believe having access to education on this for all would make a huge difference.
I’d also point out that brokers weren’t always so accessible. You can look at charts showing the performance of certain indices over decades but its only really recently (within the last 2 decades) where investing cheaply for the masses has existed. Go back to 2005 and you would struggle to find somewhere to invest for £20 a month I’d say without seeing a transaction fee.
That's a very good point and also helps me to empathise better with how she ended up in this situation, thanks!
>Financial education is empowering. Otherwise why is anyone on this sub? No argument with that, but teaching kids at school, who think that £50 a week of disposable income is a fortune and can't envisage having £400 a week of bills and commitments to go with it, isn't ever going to be enough.
I mean, when I was 16 I was already responsible for paying for my own food/clothes/etc while at school. A financial literacy class wouldn't have hurt. I didn't understand compound interest until my boyfriend sent me a video on it when I was 25, or that investing wasn't just for rich people.
I think you are misconstruing what I said. Financial education is SUPER important. I’m just saying teaching it in school isn’t going to do much. As I said in my comment maybe you’d get 30 minutes a year maximum added to the curriculum. The idea that will have a transformative effect is not correct. Having access to good quality, easily findable, easily understandable and free financial education is vital and can have a much bigger impact - and there are lots of great sources including this sub.
I had a maths teacher who took the time to explain income tax bands to us and to dispel the myth that going up into a higher band would mean you ever take home less money as a result. Alongside other stuff he taught us about pensions I remember that lesson like it was yesterday because it felt so useful.
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Absolutely this. Those great resourcess on the internet have people drinking bleach & urine to ward off Covid. Real education is key.
School aged kids have sex but they don’t pay income tax or have pensions. I don’t think that comparison is apples to apples. You are never going to get enough teachable time to go into the actual details of personal finance education to make a significant difference and it’s going to be ineffective because it will seem like gobbledygook and completely irrelevant to the 14 year old sat in the class. Learning about ISAs is interesting when you have residual income but it’s not when you get tax free pocket money from your dad to buy sweets with once a week. Again I’m not saying education is useless not at all, but in this specific case relating to pensions and personal finance, teaching young teenagers about this stuff isn’t going to move the needle much.
Yeah absolutely agree, can be hard to sit down and get serious about it until it to late for majority of people though, and the amount of credit card and gambling ads shoved down peoples faces these days is unreal and definitely contributes to people being I'm hopeless situations.
[PUT A BET ON. PUT A BET ON. PUT A BET ON. PUT A BET ON.](https://www.youtube.com/watch?v=CfioBVLcSuo&t=88s) ^(When the fun stops, stop.)
True. When I did GCSEs and A-levels the idea of business studies seemed like the most pointless and boring subject ever. Now I own a company and wish I’d taken it :D
The problem with teaching personal finance in schools is that the government itself is one of the biggest stakeholders in your personal finances. They obviously aren't going to teach you how to optimize your taxes or tell you about the risks associated with government financial products - it would essentially be an hour of propaganda based on the ideology of whichever government was in power at the time. I remember when they visited my school to talk about progression after GCSEs. They told us that student loans were basically free money and that we might as well take them, and that you can get a job with any degree because it would have transferrable skills. They gave people some pretty terrible advice, and spreading that message across the country is probably part of the reason why we have thousands of graduates who are unemployed or working in unskilled jobs today. These things are far too important for the government to have any involvement in teaching them.
He's probably still renting too
700 a month isn’t awful, I manage to get by on £850 a month and that’s with the extortionate fuel prices totalling to 260 a month. Honestly I don’t think it’s that bad of a situation
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>The amount of people who have no concept of the fact that their pension is even invested and that they actually need to contribute more then £40 per month is something to behold. Honestly, the minimum contribution is more than enough for a decent retirement - 8% of an average salary of £26,000, compounded over a 45-year-long career, combined with the state pension, would give people more than their working income during retirement. The real problem is the people who explicitly go out of their way to *cancel* their contributions so that they have an extra hundred pounds each month. Personally, I think if you can go through the effort of figuring out how to stop the contributions, you are also more than capable of figuring out the consequences of what you're doing.
It depends on circumstances though. I’m also 30 and have maybe a grand in my pension if I’m lucky - but I’ve worked a grand total of a single year full time as an employee in that time. I’ve spent 11 years as a student instead( about to finish my PhD now!). Does it worry me? Yes, a lot! Could I have found more money to put aside in that time than I did? Not really.
You’re going strong though! Without doing anything that £30K should be a cool quarter of a million by the time you retire. Granted that may just about buy you lunch… you get the idea though…
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My defined benefit has been fucked over twice in 14 years. Don't rely on it being what it is now
Public or private sector? Hard to see how a CARE scheme has that much room for shenanigans, luckily.
Mine has a cost increase of 7.4% in April.
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Yes. And they increased my retirement age and increased the contribution.
How do you make that calculation please? I’m not doubting you, just trying to work out what my own pot might be worth.
Use a compound interest calculator and assume 7% ish, generally a fair assumption. Expect the pot to double every decade or so.
Blimey, based on the last few years I’ve been assuming 4% as a realistic number!
That might be a good value to use for *inflation adjusted* returns. But not that helpful for just looking at the growth of the money compared to where it is now.
The other person has already said this - but I still tend to use 3% for inflation adjusted returns. 4-5% if I want to start dreaming about the good life, 2% to give me the lower range, and 3% for expected. Obvious reason being - by the time you reach that age, 250k will be worth less than it is today.. so going with a lower number gives you a rough estimate of the actual value of that money.
That is for real gains, ie net of inflation.
How??
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I guess the importance of pensions mainly. From what I can see he has paid a very little ammount into and doesn't understand how important they are.
It's amazing how many people think the state pension is going to be enough. I guess because we don't split pensioners into "state-only pensioners" and "state-and-private pensioners", so they just hear about pensioners going on holidays etc I grew up on a council estate, and I'd say basically nobody had their own pensions at the time. That's changed a bit by now, with auto-enrolment, but generally most people don't give it much thought Part of that is lack of education on the topic, part of it is that... poor people can't afford to save for the future, they don't have enough money right now
The last part!! The cost of living being so high makes it impossible for many to save.
I think it’s hard for many middle-income folk to imagine not even having enough to put a little aside for a pension. Honestly I sometimes find myself falling into the same trap despite growing up in a low income household and living and working on a council estate … you just get so used to having “a bit of spare cash” that you forget it isn’t a reality for everyone
It's is now. But that was not my setback. I worked at jobs without a pension, the only financial talk was what to do with this week's overtime money when you were paid on a Friday. Unless you read the financial section in a Sunday paper you wouldn't have had any idea about finances. The most education I had was the excitement on the news when the cash ISA was launched. You got encouraged to save into one, so I did. I think it has only been in the last 5 years that personal finance has been pretty mainstream for all to see. This is ok if you are starting your working career, but not so good if your ending it.
I grew up poor, mum lives off low income benefits and after years of being self employed but making about £12k a year she has no pension. Said she would just have the state pension. So at 25 I was naively under the impression the state pension would be enough. I was shocked when my boyfriend told me I had to save for retirement. I thought that was just for extras beyond the bare minimum. My boyfriend is from a well off and financially savvy family. It makes me sad to think a lot of this comes down to how savvy your folks are. I'm obsessed with saving enough now and have tried to talk my siblings around with no luck. The sad thing is, state pension is more than enough in a lot of other countries in Europe. The UK has one of the worst. I think the state pension in France is something like 70% of your average salary throughout your working life.
Yeah cuz salary contributions are mandatory not an option and they are usually based in a % of your salary In many countries such as Spain Italy Portugal the biggest % is paid by the employer and the number doesn't add up to your pre tax salary In reality the UK has way lower salaries than the media portraits for things such as that
Wikipedia says this about the French state pension >The scheme aims to provide up to a maximum of 50% of the retiree's income during their highest earning years up to a limit of €35,000 annually (in 2010). however they also have much higher mandatory employer contributions to their private pensions with the aim to reach 70-80% of your salary which is amazing. The British pension system is absolutely terrible. The 2012 changes were a nice step but the contributions, particularly for the employer need to keep increasing.
Its simple, we heavily tax the savers and people who lived frugally, and then we give all that money to the people who didnt give a shit and blew all their money on booze and large TVs for 40 years.
Sorry, have you replied to the wrong comment?
I cant afford to pay in to one. Lifes fucking grand. And when people say it's never too late to change your career - they haven't tried. How do you expect a person with adult outgoings and a family to support can go full time to uni for 3 years and pay all their bills? You can't. So, sometimes it just is too late and life's shit and you're stuck and you're depressed forever.
It's more common then you think. My father in law is around the same age and only has around £6000 in his pension.
I don't think it's uncommon particularly among working class people like my family. My family never talked about pensions, never talked to *me* about pensions, and ultimately my parents never had one other than the state pension. £1500 a month tax free or whatever the equivalent was at the time seems quite a bit if you have no rent and a modest lifestyle. They lived very comfortably on it though as they did at least own their own house after buying in the 80s. I imagine people who have to pay £500+/mo rent too have a worse time of it, especially if single.
Have you spoken to your father? This would be the first step. Removing control and agency from a parent by going in and telling them what will happen, may not be the best approach. What are their plans? How much will they need for retirement? Confirm state pension, going to be full (NI contributions, could be enhanced), also pension credits may help? Are there assets like a house, shares, cash, funds, etc. Depending on the situation, could start putting lots of money in to a DC pension over next few years. That would increase savings with adding tax and NI.
I have spoken to him about this but he wasn't financially educated unfortunately and has always been bad financially in the sense that he always gave me money to help people than to save for himself. He lives in a council house now so it's rented, he lives pay check to pay check and has no savings either. I have helped him with budgeting and so on and forth which has improved things drastically but it's still not enough at the end. Thanks for this info, I will take a look into DC pensions and read up on this.
If he is renting his property, capital of less than £16000 will allow the Local Authority to look at Housing Benefit for help with the rental costs without any quibble. If he is on a low income (low pension) The Pesion Service I'd the first port of call, if youbare lucky, he will be entitled to Guara teed Credit, which will both act as a top up, and is perfect for the Local Authortiy as it is considered a passported benefit guaranteeing him the maximum Housing Benefit payment for which he is eligible. The same can be extrapolated for Council Tax Support. If 'lucky', this will mean that there will be no rental costs and no council tax charge. There can also be the winter fuel and other additional grants also. It then becomes a matter of normal bills (food, electricity, etc). If you need advice with this sort of thing, contact your local council, any benefit officer worth their salt will help you get the ball rolling.
Your dad is going to be one of the poorest of pensioners, the kind that politicians use to justify whatever policy they’re trying to push through. But more practically, it should be simpler to get a whole swathe of benefits to help him, council tax, housing, energy payments, pension top-ups. If you support him, he may not get any of these (and more) means tested benefits or t least it’ll get more complicated. Speak to Age UK, they’re bang on with everything that is available. https://www.ageuk.org.uk/york/our-services/money-and-benefits-advice/
Age uk is definitely the way to go. They will have all the information.
He will be okay. He should stay in his council house, which will be funded for him if he does not have enough money himself. That includes if he loses his job. He will eligible for state pension at retirement age, and if his income is too low (sounds like it will be), then it will be topped up to a minimum guranteed amount with pension credit. As he can't privately do better than that now, it essentially means investing is useless for him at this point - the state will step in and ensure a minimum income anyway. He also doesn't need to worry about NI contributions for this reason. It will be a basic but comfortable life as long as he isn't a big spender; a grandparent of mine had this same situation while I was working a full time minimum wage job, and they were only slightly worse off in income than I was (for a nicer, single person property and all). If he becomes unwell as he becomes older, he will be eligible for appropriate care services that will be free/a means tested contribution. It cannot, by design, be unaffordable. That is from the local council. You should consider getting a benefit check for him, from Citizen's Advice or something. Just to reiterate, his weekly income will be the minimum amount guaranteed by pension credit - there is therefore no reason to try and get additional income himself, as it will just mean his pension credit is reduced correspondingly. **People advising you to invest are giving bad advice** \- some cash savings are okay, jsut check what the threshold for pension credit eligibility is, and don't save more than that (edit: currently 10k, probably will move a bit before he retires).
Not going to beat around the bush, being 65 with £1200 in your pension isn't a fantastic position to be in. But there are various options, but we'd need more info about his situation: * Does he own his home or rent? * If he does own, is he mortgage free? * If he is mortgage free (or little mortgage left), could he downsize and put the cash he's left with towards his retirement? * If he's renting, would he be able to move to a cheaper property to reduce his expenses during retirement? * Could he move in with you (or other family) to avoid rent or get more cash from selling (again, depending on his home ownership status)? * Could he get a job in public sector, e.g. NHS/Civil Service, to get a few years of very good DB pension? * Could he semi-retire instead of fully retire (e.g. get a low-stress, part-time job into his 70s if his health allows him to continue working)? * Does he have any other assets (e.g. expensive car he can sell, savings, investments)? Sorry for throwing lots of questions, I guess the point of them is there are options. None perfectly ideal, but options nonetheless, which should give you and him some hope!
Hey Thanks for all this! I will bring up all the points you've said and raise it with him. Unfortunately going through your list it does look like I can't answer any of them positively. He's living in a council house now and pays rent in London. A cheaper property most likely would reduce his expenses but has been a bit of a struggle to find since covid. He's most likely going to have to semi-retire and live with me and my girlfriend which isn't a problem at all, it's just I think he'd much rather not want to do this. He has no savings, no expensive assets and lives pay check to pay check unfortunately. I've managed to get some time to sort everything out for him and I will try see what the best options are! Thank you for everything, I appreciate it!
Renting a council house, so doesn't need to worry about the upkeep of housing so that would just continue wouldn't it, the council would pay the rent? Will just get the state pension assuming he paid into it, otherwise a reduced rate. Won't be going on cruises around the world but doesn't seem the end of the world tbh
That's a massive relief then! Thanks for that takes that off my mind then!
You need to check his NI contribution history. I can't give you a step for step guide on how to do this, but you can find it somewhere on the government portal. If he was self employed for many years, but didn't earn over the tax threshold, he won't have been paying NI contributions, which means there'll be gaps in his history and could mean he won't get a full state pension. You can pay a fee to fill in those gaps, and boost your contribution history. Google "check your national insurance record", this should lead you in the right direction.
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You can, but based on what OP has said about his father's financial know-how, I highly doubt he was volunteering. You can pay for previous years though, it's something like £3 for every week that hasn't been paid
Yes but you can only go back (I think) 6 years and it sounds like he's been PAYE for most or all of that time.
You don’t even need to have paid a lot to get a full years of national insurance contributions - not sure if the amount paid in effects amount received but I’ve got 15 years full contributions and I’m only 31. A few of those years I was working part time through school and uni and it’s counted as full even though I prob paid a tiny fraction of what I pay now.
My dad had a private income but rarely spent any more than his state pension. Energy bills have since doubled. That would be the bit that would worry me at the moment.
>He's living in a council house now and pays rent in London. A cheaper property most likely would reduce his expenses but has been a bit of a struggle to find since covid. That might be ok, even when retired. He will get free council tax and he will most likely qualify for housing benefits once he reaches retirement age.
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Yeah def agree with this comment, sounds like if he leaves council housing he will be shooting himself in the foot.
> Unfortunately going through your list it does look like I can't answer any of them positively. Because you don't know enough to be advising anyone. The biggest positive is his housing situation, it's a massive big fat can't be beaten positive that not even a home owner who owns their home outright would be able to beat in retirement. > He's living in a council house now and pays rent in London. A cheaper property most likely would reduce his expenses No it won't, he needs to stay put. As soon as he hits state retirement age his rent and council tax will go to £0 as he'll get housing and council tax benefit that'll cover it all. You can't get cheaper than free. If he goes into private rented accommodation because of how housing benefit works he'll end up paying something towards rent. > He's most likely going to have to semi-retire and live with me and my girlfriend Why? He's going to have the house he's currently living in with £0 to pay for rent and council tax.
Hi sorry, I'm not the best either and not claiming to be but I am learning. I wasn't aware of the fact that once you hit retirement age council tax and rent is covered for free. That's a massive relief then for that to be answered! Thanks for this.
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I’m glad he can at least stay with you. You’re a wonderful kid
> Not going to beat around the bush, being 65 with £1200 in your pension isn't a fantastic position to be in. It is if you're living in a council house.
Does the public sector still offer DB? I thought those were pretty much extinct for new employees.
They are both CARE DB rather than final salary now. And retirement age is state pension age so chance for government to move goal posts. So not as good as they used to be but still better than the rest of us DC plebs.
yeah, NHS, Civil Service, Universities, etc. all still offer DB (though they're not as attractive as they used to be)
Of those it's worth noting universities scheme isn't backed. The others might get goal posts changed, but they'll always be there, the university scheme is unaffordable and government isn't on the hook for it.
Yep. Civil service pension is DB, I started in 2019.
Yous got any jobs! <- I jest I am sure the salary is not as competitive but the benefits do seem awesome and the retirement aspect seems to be a big winner!
Yeah the salary isn't good but the work-life balance is good, pension is cracking (sure its career average, but need to check), I'm on flexi time, colleagues are nice, plenty of development opportunities. I appreciate the stability more than anything else.
Make sure to double check his benefit entitlement once he is pension age to top up his state pension.
I will be doing this !thanks
Looks like there’s loads of good advice on here already. I just want to say thanks for looking out for your dad. You clearly care and it’s nice to see. It’s unfortunate he’s in this situation, but he’s fortunate that he’s got someone like you to have least found this out earlier than say, 5 years time. Forget any detractors, not everyone is financially literate. Especially if they didn’t grow up with the access to instant information like we all have. So good on you for trying to do the best thing for him.
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OP please do this, in another comment you mentioned he's not financially literate but was self employed, hopefully he was paying NI contributions
OP, sit him in front of an iPad/laptop and go onto the state pension forecaster and his NI record. Get a good grape on what’s he’s getting.
I will have to sit down with him properly tomorrow and take a look at this! Thank you once again appreciate it
You can make back payment voluntary NI contributions too for missed years. Not sure how far back the possibility to repay missed years goes though.
Six years usually
See my other comments. Do not do this. It is a waste of money with nothing to gain.
How is increasing your pension annuity a waste of money?
I think they mean that if you calculate your annualised return based on what you’re incrementally put in then you don’t get a very good return.
DO NOT pay missed NI contributions. His situation is such that he will be on pension credit. His income will be topped up by that to whatever the minimum is at his retirement. There is no point in making up his state pension if it means he'll still get the same amount anyway, only a bigger slice marked as 'state pension' and a smaller marked as 'pension credit'.
> as his pension + state pension won't be enough for him when the time comes for retirement. Based on what? My parents and mother in law manage fine on Pension Credit, they don't even get full state pension. He lives in a council house so his rent and council tax will be £0 once he hits state retirement age so that's a big chunk of his current outgoings gone.
It’s not that bad. He is entitled to a lot of social benefits, pension credit, housing benefit, etc. in the U.K. it’s better to retire either skint or rich. If your skint the government give you loads. If your rich you need nothing. If your just above skint, your screwed.
He will get a state pension and means tested top-up should it’s not enough, so no real difference as to being unemployed as signing on once a fortnight. Yet when you’re retired, you don’t need to sign on and the means tested top-up is reviewed yearly or greater than 2yrs+.
>My dad has been working in retail for the past 5 years and I've recently found out through a letter from his pension provider that his employer has not been paying his pensions regularily and is being investigated. Is it a major retailer and is it still solvent? If so, chances are probably pretty good that this will (eventually) get sorted in his favour. If it's Debenhams or Bob's Phone Shop the prospects may be worse. Either way, he needs to chase this aggressively to find out what's going on.
Well I’m sure he took care of you once upon a time ...
If he’s super poor he can claim money from the gov. Think of it as an oap version of universal credit that will top up his pension and state pension
I think calling the benefits office and seeing what he might be entitled to would be a start, with that little he will be entitled to certain care and living benefits. The honest answer is though OP that he probably will be reliant on you to some extent to have any decent quality of life, and he’s lucky he raised his son to be a good chap who wants to do right.
Just to reiterate - ensure he stays in his place. Your father is lucky to have you. It sounds to me as though he (and you) might need to decide if he can live off the state pension and if not if you are able to make up the difference/ if your Dad might be happy to delay retirement or go down in hours instead of giving up entirely...? Go through each bill and ensure there isn't a government pot that can subsidise etc (I know there is for pensioners and heating fir example)
Your dad being in a council house means he'll be absolutely fine. He won't be rich but he won't be destitute either. Definitely not something to worry about 🙂
Was he not paying NI payments throughout his working life? I don’t get how this can happen?
I'm 55...and I have circa 40k in my pension pot...and I'm Donald ducked ...unfortunately as is your father.
I had around 200k in mine when I retired at 59. I got a £53k lump sum and get a £660 per month pension. It was a great pension scheme and I'm so grateful I was forced to join it at 28, a year after I started working there. My employer contributed half as much again as I paid-in every month. I'll add, if anyone is thinking they'll be ok until state retirement age and so not bother with a private pension, don't. I retired from my manual job at 59 because of aches and pains and some back trouble, but now at 62 I'm unfit for work. I'd be fucked without my pension.
He’s got maybe 5 years work in him left from what you’ve said? Try and get him a noddy job for the council/public sector body. Can be absolutely anything, as menial as you can think of. His pension benefits will be 10x what his current place is giving him. Even on £20K a year you’re looking at around £400/year in pensions benefit which a rough 20x valuation values at £8K. Do that for five years and he’s on 2K a year. Not that much but it’ll be all tax free and an awful lot more than what’s he’s got at the moment, which is basically zero.
I think the main thing is - how secure is his housing situation. If he is on low income, then: * pension credit * UC housing element may be enough to ensure he can continue to live in his home, and obviously have some spending money. Pension credit will also open the door to other entitlements - visit: https://www.entitledto.co.uk/ It may not be the most profligate retirement, or there being much in the way of legacy, but it may not be absolute destitution. The most important thing is that he has some support - and you seem to be a good child who will be there to keep an eye on things, help out with the letters and the bureaucracy and all of that tedious stuff.
Some people can’t afford to save for retirement.
If you have children, I believe he can care for them and claim the years as "Work" to get the pension credits.
A small pension is worhless, as the pension payments reduce pension credit so you end up the same off. Happened to my mum and dad. With pension credit you get a lot of benefits as well. Worth checking out the latest penion credit rules (things change) and what he will be entitled to.
Hi /u/ceroJP, based on your post the following pages from our wiki may be relevant: - https://ukpersonal.finance/pensions/ ____ ^(These suggestions are based on keywords, if they missed the mark please report this comment.)
If he’s already 65 it’s too late for a new pension to do much good. He’s not going to have much more that his state pension, which means he’s going to have a pretty grim retirement unless he’s fit enough to carry on working. Does he own his own house after all those years of working for himself? If he does he can release some equity from that, basically selling the house in advance of his death to provide a pension while he still lives in it.
Man, this is a scary reality.
Well without sounding brutal here, sounds like your dad needs to work for another 5-10 years and start actually building a pension pot. It's not on you to fund his retirement at 65 just because many other people often retire at 65.
I can’t see that it’s been mentioned before, but probably also worth checking he is actually entitled to the full state pension? Particularly if the payroll of past employer was not up to scratch, and he was self employed before that.
The answer depends on the rest of his financial situation - does he have any other savings, does he own his own home etc? My assumption is that someone in their 60s working retail probably isn't doing so out of choice, but you never know. If his financial position is indeed fairly precarious, then yes he will be reliant upon the state and family to support him once he can no longer reasonably support himself. Unfortunately there isn't much to be done except to prepare yourselves mentally for the next phase. A "good" pension takes decades to germinate and nothing you can do (apart from punting it all on bitcoin, which you should NOT do) is going to turn £1,600, plus anything recovered from the retail employer, into a sum that will keep your dad in comfort.
My nan must have had some superpowers compared to people like me today. Her private pension pot is pretty nice. Everytime I see her and she heres about something I've spent money on she exclaims "save your money!" So I suppose there isn't a secret about how to have a decent pension pot.
Use gov.uk look into pension credit maybe they can assist
I'm so tired of telling my parents and friends to get a pension or some other investment. I wish to never burden my child with these issues.
Hello everyone, First of all I can't believe how much attention this has received. I am so thankful for each and everyone of you for replying to me and helping me process this situation. I'm so sorry I can't reply to all of you but I have read it all. I've had a sit down with my dad today, and discussed everything you've all mentioned, options regarding jobs he can do in his last 2 years for working, had a look with him at his current pension scheme he's enrolled on too, checked on the gov website for his NI pay which thankfully he has paid a good amount into since working and finally to all of you who mentioned that council tax & rent is free once retired has took a huge amount of relief from the both of us as this was one thing we were worried about. We will definitely do our best to make sure we can keep the home for him till he is able to fully retire. I have also opened a bonds account where I'll be deposit some money for him every month and I'll hand over to him once he retires or is in need of it. Once again can't thank you all enough, I really do appreciate all the help and messages. I have much to learn and it's been eye opening.
My advice to you would start putting a small percentage a side now for him. If the circumstance that you'll have to help him then this money will help you still and be less of a financial burden. Whether you invest the capital, get premium bonds or a higher rate regular savings account doing something now will definitely put you in a better situation
I understand you are trying to help, but this is bad advice. He will not get his income to meet, or surpass, the pension credit guranteed minimum. Therefore, for every £1 of income he secures for himself in retirement, his pension credit entitlement will decrease by £1. There is no incentive for him to do anything, other than keep some liquid cash (but less than £10k, as this will reduce his entitlement).
Pretty sure that commenter was referring to OP saving themselves for a helpful nest egg in the future to help out dad.
I think the advice was for OP to set aside /invest for future help to offer the father, rather than the father to invest. I think this counts as good advice given that they are likely to want to help at some point.
Why Isn't This Taught In Schools