Money Box Live: When Can You Retire?

This BBC podcast is supported by ads outside the UK. Because Vivint adjusts your thermostat when it knows you're out, it's a smarter way to save. When Vivint guards your packages from Prowlers, it's a smarter way to protect. And when you can lock the doors and dim the lights for movie night with a single tap, Well, that's a smarter way to live. To get the smarter home system that just gets you, go to Vivint.com or call 1-855-4-VIVINT. Live intelligently.

BBC Sounds. Music, radio, podcasts. Hello, we're publishing this Moneybox Live podcast more than halfway through the working week. But where are you in your working life? And more importantly, where are your pension savings? Because we will need an extra £8,000 a year for just a so-called moderate retirement.

That's according to the latest research. And one think tank reckons the state pension age needs to rise to 71. So for this Valentine's Day podcast, our reporter Ima Devlin has been asking that extremely romantic question. When will you retire? 75 according to my pension plan. I want to retire at 60. What age do you think you might be able to retire? About 150. Yeah, I think I'll probably be fucking away till I drop. At what age? 35.

And you need to start thinking about it right now and make your money works for you. I'd love to say 55, but I've got a feeling it might be a bit longer than that. So what about you? Do you have big retirement dreams? Or are you wondering if finances will mean working to the very end? Maybe you do a physical job and you're worried about your ability to keep working. Maybe you love what you do and you want to keep doing it as long as possible.

is still time to join our big retirement discussion today you can email us it's moneybox at bbc.co.uk or tweet us we are at moneybox but before we meet today's experts let's go to our first caller paul who is Paul, good afternoon. Hello, Fliss. Many of us are looking forward to giving up work. It's not you, though, is it? Because you're Paul Lewis from Moneybox. The nation needs you to keep working.

Well I don't know if the nation needs me to keep working. I think I probably need to keep working. You know, they do say, if you love your job, you never do a day's work in your life. And that's a bit how I feel, because I love what I do, both broadcasting and writing. And I'm just very lucky. I'm immensely lucky. As long as I can stagger to a keyboard. or a microphone, I can carry on working. And because I love it, and I suppose I do

think it perhaps might be a bit useful to some people occasionally I shall carry on. Just occasionally now and then you must love it to work that many Saturdays. I mentioned that survey from the Pensions and Lifetime Saving Association you looked at this on Saturday's programme. And it does show the cost of retirement is on the rise. Well, it does. And I think most people were surprised by the amount it had gone up and the figures themselves. And it's done by a survey.

they ask this group of people what they think a minimum or a moderate or a comfortable retirement would be, you know, what holidays you'd have, what about a car, what about how much do you spend on presents for people, do you eat out and all that kind of thing. got all those results in and totted up the cost of them they did come to these extraordinary figures you know for a single person 43 100 pounds a year um to um to live a comfortable, a moderate life. And I just think it's...

I just think they seem very high, very high indeed. They do seem very high. And actually, quite a lot of people got in touch about that. After Saturday's programme, Peter emailed to say, I'm a single retired person living alone in a house I own and get along very nicely on slightly more than...

half the amount the stats think I need for a comfortable life. And Paul, some of those numbers, they suggested a couple needs just under £60,000 for a comfortable retirement. But there are loads of couples, including families with children who live on less. Well, there are indeed. I mean, I did say on Saturday, this is more than the average wage. So a lot of people are going to have very meagre retirements. And if you look at what you'd have to have saved to get that sort of income.

including your state pension. It's in the hundreds of thousands and that's just a dream for most people. So I really think they did seem very high. They have gone up year by year. They went up a lot last year and they've gone up again this year.

people do think they're a bit high and of course many people find they can live on a lot less. What about working later because somebody might look at you and think okay working into your 70s is clearly very good for your health but what I was wondering is Is it that working is good for you or is it that only the healthy can keep working? Yeah, that's a good question. I'm not sure my doctor would agree with you incidentally, but I certainly feel OK. And my work isn't that demanding physically.

fortunate I think from my point of view. I think the thing I do know is that if you work very hard maybe a difficult stressful job and then you suddenly stop at 65 or 66. then your health declines because you're not using your brain, you're not using your body. And I think it is important to do something.

a bit like what you did in work or maybe something you didn't do in work but something that keeps your brain and your body active that does help you avoid the signs of aging it's when you just slump down and think oh that's it

I can do what I like. Oh, but I'm not quite sure what I want to do now. That's really when it's bad for your health, I believe. Paul, well, thank you very, very much. You're not just working into your 70s. You're working overtime now as well on Moneybox Live. Thank you so much. Glad to do it. Thank you.

Listening to Paul and joining me today to answer your questions are Helen Morrissey, Head of Retirement at the financial services company Hargreaves Lansdowne, and also Dr. Emily Andrews, Deputy Director for Work at the Centre for Aging Better Charity. Good afternoon, both of you. Afternoon. Thank you very much for joining us. Emily, research from the International Longevity Centre suggests retirement age or state pension age would need to go up to 71 by the year 2050.

What would that mean for today's 30-somethings? I mean, you know, this is a... It was a provocative proposal by the ILC. I think it was deliberately designed to provoke people. And it has done that. And none of that provocation has been positive, as far as I can tell. And, you know, it's true.

There are more people who are working past 65 into their 70s than there ever have been. And that's a... broadly speaking a really positive story but at the same time most people have left work before they even reach the current state pension age of 66 so you know while people in their kind of 30s 40s You know, approaching retirement age can kind of feel comforted that there are growing opportunities for people to keep working. They're not for everyone and they're not everywhere at the moment.

Thank you. Helen, those numbers from the PLSA I was just chatting about with Paul, They suggest a couple needs more than £22,000 a year for a minimum standard of living, more than £43,000 a year for a moderate standing, almost £60,000 to be comfortable. We've heard...

that those do seem very high numbers. But how much would you need in your pension pot to make that possible? Yes. So, I mean, again, these are really kind of staggering numbers. And if we drill down into them, you know, that couple on the moderate retirement.

forty three thousand they will be looking at needing pension pots of maybe up to two hundred and fifty thousand pounds each in order to afford that and then if we break that down to a single person they probably need double that you know a double that five hundred thousand in order to get that moderate retirement. If we looked up to that comfortable standard.

Again, a couple, around £450,000 each in order to get that. And again, double for a single person. So it shows the difficulties, particularly for single people. Is that assuming someone's using their pot to buy an annuity? So basically they gave some ballpark figures for an annuity because they changed depending on rates and what type of annuity you get. But I think that even if you were in income drawdown, you would probably be needing pension pots of around those top.

The figures too, yeah. OK, thank you. Right, let's hear from Dolores, who's 80, she's single and she was working until her early 70s. I stopped working when I was 73, 74. I had to carry on working mainly for financial reasons and because I wasn't particularly well off and you have the assumption that... retirement age is a long way away and the money is more important now so for

Whenever it was possible to opt out of paying into a professional pension, I did. What was it like working up to 73, 74? I was lucky. I was healthy. I realised how important that is. I had a very understanding manager who was open to allowing me to reduce my hours.

When you were younger what did you picture your pensionable years would look like? If I'm honest I don't think I thought about it much. I just assumed that I would get the state pension and that I would... be perfectly fine i just did not consider or think too hard about the whole business of finances and getting older

It's very easy not to think about getting older, isn't it? Helen, Talora's thought her state pension was going to be enough. Now, if you qualify for the full state pension, at the moment it's just under £204 a week. It's going up in April to just over... £221. That's a significant increase isn't it but how far does it go towards funding a decent retirement?

Yeah, it's really interesting. It shows how we need to be having these conversations around retirement much earlier. So a state pension on its own, really, it's only going to be servicing really your very basics. You're not going to get much beyond that. you're reliant on the state pension

Well, Nikki's emailed to say, it's obviously harder for a single person to manage on the state pension. Would it be an idea for them to get a slight increase and couples a slight decrease, a bit like the current council tax for single occupants? Keep your thoughts coming. Emily, Dolores needed to find work in her 60s when she came back to the UK. We're talking about people needing to work longer. How much harder is it to look for work at that age?

I mean, you know, one thing that we hear a lot from people is that when you've been out of the job market for a while, getting back into it can be quite bewildering. If you haven't looked for a job for a long time, you might not know where to look. who were kind of expecting to take their CV around to, you know, to hand out in person. Now, also, it is also a stereotype that people are not net savvy when they're in their 60s. Many are. And actually, we know that kind of internet...

search is popular amongst people in this age group but we do need some help and employers are waking up to how to make their recruitment practices more inclusive. And briefly, Dolores didn't feel like she could say if she opted out of her workplace pensions. How do you get people when they're younger to think about the future because the present can feel really hard.

So one intervention that we think has some legs is sometimes called a midlife MOT. Again, this is something the government's quite interested in and that more and more employers are getting interested in, which is giving people an opportunity to kind of holistically think about their future.

are at a trigger point when they're in their mid 40s and what I like about this is that it can be coupled with some sort of psychosocial interventions to help people kind of feel the psychological safety to help them think about these things that no one wants to think about as well as career planning for the future. about my car's MOT or my financial potential MOT. Right, some people are working long into their 70s and even older.

There's a very different group of people who are entirely focused on retiring decades earlier. They're part of a movement called FIRE. It stands for Financial Independence Retire Early. And I've been speaking to Sarah, who's in her 30s and plans on quitting. work much earlier than most. We tend to put away around about 45 to 50% of our monthly salary into pensions, investments and savings.

Obviously, that's a significant amount and I know that not everyone is able to do that, but we're in a position where our outgoings are rather low. How are you able to do that? I mean, presumably you're going without lots of things. Not really, no. Both my husband and I have worked from the age of 18. We don't have any student debt. When we bought our first-time property, we could live with R.

Family members, whilst we saved for deposits, we didn't have to rent at the same time. How long has this been a goal, saving as much as you can and retiring early? Maybe 10 years, something like that I've been. The workplace pension started when I was 23 and we've been doing salary sacrifices.

face from that how do you limit your spending on discretionary stuff your payday comes how do you decide right i'm definitely putting half of this into my pension investments we give ourselves like a 300 pound a month spends really that we can just spend on everyday things. How do you avoid temptation? So write everything down on the little notes section on my phone if I still want it in 30 days and then I really want it.

So taking cash out every month allows me to physically see how much money I have. Sarah, do you like your job? Yes. Why do you want to retire in your late 40s then? Because I don't want to work till I'm 71. But between late 40s and 71, surely there are some other options. There is, but if my lifestyle means that I can save so much money.

And I can afford to retire early. Wouldn't everyone want to? Wouldn't everyone want to? Clearly not a lot of people who've already been in touch with the programme. Helen, Sarah said it herself, not everybody can do this, but she is proving this is possible for some people.

Yeah, I mean, I really commend her utter determination in kind of striving towards this goal. But as you say, you know, not everybody and I would say the vast majority of people wouldn't be in a position to be able to save that amount of money. what you risk is kind of you know doing without today and also doing without tomorrow um you know in order to kind of save enough to to fund a life you know that you know

where you could be living to your 100. It is fascinating the different approaches people take or the different approaches some people can take. Let's talk to another 30-something. Shanoa is on the line. You're 33 and we actually heard from you at the beginning of the programme.

You're one of those people saying you'll be 150 when you retire. You'll be working till you drop. Yeah, I was feeling a bit negative about this subject on that day because actually that very morning I had checked my pension pot. And I'd actually increased my contributions thinking I was being very responsible. And my annuity had actually gone down quite significantly.

And I was like, well, how does that work? Oh, that is very painful. Well, we'll talk to the panel in a moment. But we just we heard from Sarah there who's planning to retire in her 40s. When you sort of roll your eyes and say 150, you just mean it might be might be a bit tougher. Yeah. And I am quite fortunate as well. I have a pretty middle class job. It's not too physically demanding.

managed to save a bit I've been conscious of these issues since I was about 24 and my mum gave me a telling offer saying I didn't want to think about pensions but I'm actually relatively fortunate and still Looking at my situation, it looks not that great. So really, it makes me worry so much for not only myself, but also my generation.

the other generations of a similar age where I think the majority of people would be in a position similar to myself, if not worse. Are you renting or do you hope to buy a house? I'm renting right now. I'm hoping to buy in the next... I think that's a position that a lot of people are in. I think unless I can pay off the mortgage, retirement would be a dream.

And we've had that suggested age of 71 by 2050 for the state pension. Just a suggestion, not government policy. That would be you, of course, if you're in your 30s now. How would you feel about that? Well again I'm quite fortunate in that my job is one where I could realistically keep doing it assuming I was still in good health until I was in my 60s or 70s.

But not everybody is so fortunate. And that's also assuming that my job doesn't substantially change. If I talk to people who've been doing my job for 30 or even 20 years, when they started out, it was totally different. Everything was on paper. Now it's all digital. When I'm looking 40 years in the future, maybe my job will be fully automated. And I feel like that's not very likely in the job that I do, but 40 years in the future is very unpredictable.

And I feel like that's one element of this conversation that's really been missed. Like, what jobs are these 70-year-old workers going to do in 2060 with AI and all this sort of technology? coming down the pipeline. You're clearly thinking about this a lot. You're saving into a pension. You're looking at your pension savings and thinking about your future. So you are quite switched on to this. Do you have a question for our panel? Just what are we supposed to do?

People my age who've done everything right and still don't have enough or who maybe haven't really thought about it or have been quite unlucky and are now in a mess. What are we supposed to do? Well, let's bring in Helen on this, you know. Helen, what can people in her position do? They're doing all they can. They're saving what they can. And she's still worried it's not enough.

Yeah, absolutely. I mean, what I would say is I think there's a lot of fear surrounding pensions and pension planning. What I would say is that, you know, she mentioned that she boosts her contribution and yet her pension pot had gone down. This is because it's invested in the investment markets.

and they can shift what i would say to her is that what goes down will come back up again you know she's got time you know if she's able to be in a position to boost contributions as and when she can she will see that pension bills build so it's safe

stay positive. And Shanoa's planning to buy a house and hopefully clear the mortgage but the numbers we were talking about earlier needed for a comfortable or a moderate or a minimum retirement they didn't include renting costs and we know a lot more people her age now will be paying rental costs. for the rest of their lives.

And you're right. I mean, this is where I think the conversation around retirement really has to shift. You know, we can't expect that everybody coming into retirement will have paid off their mortgage. I was looking at some data today and it showed average rents are £1,220.

per month you know if you're factoring that into new retirement savings it's a significant boost and it's something that we need to talk about. Shinoah thank you so much for joining us I'm sorry we can't solve the pension issues for an entire generation in our half-hour program but we really appreciate you explaining. them to us. Emily, Shanoa says she has a job she could carry on doing, hopefully, into her 70s. Dolores did as well. Paul Lewis clearly does.

It's not the case for everyone, is it? Because we've had a message from Michael who says, I've worked as a ground worker, groundsman, gardener for councils and the private sector. At 60, I was too old. Raising the retirement age means we won't get a pension because we're either dead or broken. Broke my shovel. I'm not gonna break my back.

So, I mean, there definitely are people who are in that situation. And, you know, that is where we have to be acknowledged that when we increase estate pension age, if we don't make it easier for people to move into different jobs or to access retirement, all we're doing is just increase. the number of years that someone who's out of work might be living in poverty.

However, more and more employers actually often in those industries that you think of as being quite physical, I'm thinking of, for example, construction, are actually really live to this issue and actually slightly at the leading edge because often those are also industries.

where they've got a skill shortage and they're finding it harder to get younger workers in and they really want to work out how to redesign jobs in order to keep skilled workers in to kind of use that experience and to help bring more people along.

It's amazing to hear Shinoa talk about AI, such a good point. The really good news about AI is that if we start automating more tasks, the skills that become more important are the human skills, the people skills, and those are the things we get better with as we age.

chatting before we came on air about how you you can ask for adjustments as as you age if you need to to kind of dial down the physicality of some of your work yeah absolutely i mean under the equalities act um if you are disabled or you have a long-term health condition that you know is

getting in the way of doing your job, you're broadly speaking entitled to reasonable adjustments so that you can do your job. And that law is really important. But actually, so often, and we heard this from Dolores, employers are really motivated to try and keep people. They want to retain people.

want to have to go out and replace their skilled workers thank you now before we came on air i also spoke to steph she and her husband retired they realized they needed more income and they are using their home to make some money steph told me how it all came about We both decided we wanted to retire early, which I recognise is a very fortunate position to be in. But when we did a big spreadsheet of all the sums for ingoings and outgoings, we realised that if we wanted to retire early...

we needed to get a little bit of extra income. So it just made sense to take the opportunity to give up work when my husband got the opportunity for voluntary redundancy and then make some extra income. covers the bills. We love a spreadsheet here at Moneybox Live. When you say retiring early, how early are we talking? I was 56 and he was 57. We're now 58.

I mean, that is much earlier than a lot of people listening will be planning to retire. Yeah, we are very fortunate. My husband has a final salary pension scheme. He's probably one of the last people to get those kinds of things. It was after lockdown, really. We knew working wasn't worth it. We could be home together all day and it was actually really nice.

So that's what we decided to do. That says a lot about your relationship, I think, as well as your finances. So you've got this extra way to plug the gap. Tell me what it is you do. So we offer a room out as theatre digs. So that's for actors, technical staff, anybody who is touring around the country need cheap accommodation. And it's not loads of money, but it is making the most of the space that we've got.

So it's not just having a lodger who's there all the time. It's occasional visitors. Have you had anyone famous? We have had a person who was on call the midwife, but I wouldn't want to say his name. What does this extra income then mean for you in your late 50s? It means that we're not under as much pressure to sell the family home as our spreadsheet suggested.

We do have to sell our family home because it's too big for us, but we've still got one at university, so we do still want her to be able to come home. And, yeah, it's taken the pressure off. That's what it's really done in terms of... paying the bills, making the most of this is an asset, but we're now getting a bit of income out of it, that extra room. Well, we won't have that. But...

I suppose we've done our own sums on what we need. So, you know, we have factored in the fact that we like an occasional weekend away and that kind of thing. But, yeah, that's a lot of money, isn't it? Most people are not going to have that in retirement. I tell you what, if everyone was like Steph with spreadsheets and sums, we wouldn't need Moneybox. Helen.

To pick up on that last point, we talk about needing a certain level of income for retirement, but it does change over the years, doesn't it? Because somebody might want two holidays a year and a relatively new car regularly in their 60s and their 70s. Not necessarily by the time they're in their 80s and 90s.

absolutely yeah i mean as you say when people first retire you know they want to do everything as you say they want to go on the holidays they want to be taking the grandkids out but then as you kind of go through retirement your health might start to kind of slow down you might want to do a little bit

less and that means that your incomings so your outgoings rather will go down but then you've also got to be aware of as you kind of get older you may have need for care which could then push your outgoings up again so it could be a u-shaped need spending. Emily, renting rooms, side hustles. Is it new? Because I remember my grandmother taking in a lodger to help with her finances. And that was, well, that was decades ago.

Absolutely. That's what I was thinking. I was thinking about kind of Victorian women before there was a state pension, you know, making ends meet with lodgings and renting rooms out for digs. So, no, it's not new at all. And I mean, when we talk about side hustle, self-employment is incredibly common.

amongst people in this age group. That can be a really positive thing, right? People doing consultancy work, people working in a way that's flexible. But I worry that what it tells us is that we don't have enough good quality part-time work in this country and that we really need to make work sustainable for all of us.

Helen, Steph and her husband eventually want to sell the family home. Now Hargroves Lansdown did some research on this, didn't they? Because downsizing sounds like a sensible idea. Absolutely. I mean, it can come across as an ideal way to fill a gap. But what we found is that...

um 23 of people that we surveyed said that they planned to downsize but what we noticed was that as people got older and this wish to do so it seemed to evaporate quite quickly so around a third of the 18 to 34s wanted to do it compared to only 14% of the over 55s.

various reasons you know first and foremost people get very attached to their homes they don't want to leave their family they don't want to leave what's you know familiar to them and then also when they weigh up the costs of actually selling a home and buying a new one they might find that they actually

release less money than they thought they would. So it's just the sort of financial impact potentially stopping people from downsizing. And also the emotional one of potentially having to move away from friends and family as well. Thank you very much.

Well, our working lives may be going on for longer, but the Moneybox Live podcast sadly can't. Huge thanks to everyone for the many, many emails. And thank you, of course, to our experts. We've been hearing from Helen Morrissey of Hargreaves Lansdowne and Dr. Emily Andrews. the Centre for Aging better. If there's a financial story you want me, Paul Lewis or the team here to take a look at, please do get in touch with us. You can email moneybox at bbc.co.uk and include a phone number if you can.

In this podcast, the producer was Sarah Rogers. The reporter was Ema Devlin. Production coordinator, Sandra Hardiel. The studio manager was James West. Our editor is Jess Quayle. I'm Felicity Hanna. And this was a BBC News Money and Work production. I think the power of the show was crazy back then.

The X Factor promised to turn ordinary people into pop stars. We stood there behind the doors when 16 million people were about to watch you go on stage and Simon just stood next to you like, good luck girls, good luck. I'm Chichi Azundu. For years, I was a BBC showbiz journalist who covered every twist and turn. I want to go behind the scenes to find out from staff and contestants what it was like.

You don't just want average people. You wanted, you know, it was so bad. They were comical. I feel like I was humiliated just for the entertainment. Did the show ever come back and they said to me, Sam, will you come on and do it again? I'd be like, what time do you want me? Over six episodes, I'm looking back at the good and the bad of one of Britain's biggest TV shows. For BBC Radio 4, this is Offstage, Inside the X Factor. Listen on BBC Sounds.

A Vivint home is a smarter home. Vivint lets you keep an eye on your kids from anywhere, so it's a smarter way to care. Because Vivint adjusts your thermostat when it knows you're out, it's a smarter way to save. When Vivint guards your packages from Prowlers, it's a smarter way to protect. And when you can lock the doors and dim the lights for movie night with a single tap, well, that's a smarter way to live. To get the smarter home system that just gets you,

Go to Vivint.com or call 1-855-4-VIVINT. Live intelligently.