difference between UK retirees and US

[Murph]

Pensions? Do most Brits have pensions? Most in the US do not have pensions.

At least for me, I have to focus on other assets. And without a pension and state-provided healthcare, the numbers have to be relatively large.

If I am not mistaken, SS is the equivalent of a pension in UK.

 

[Kim451]

Yeah, some folks don't understand what other people in the USA put up with. I've been fighting for surgery and Anthem denying prior authorizations. Sending me to providers who have no way of contacting them....

I'm considering paying out of pocket only I have no idea if it's 5k or 50k! Obviously no way of finding any more information.

I used to think we had decent but expensive health care, not anymore.

Go to Bangkok. Medical tourism is a 'thing' for a reason; they have great health care at very affordable prices.

 

[zippy2020]

lots of elderly die on the street, come on now, What a gross exaggeration. Both the US and UK have lots of safety nets for the elderly and anyone else that is struggling. Any facts and figures to back up your comments about Japan.

Poverty among single mothers and elderly females in Japan is very well documented:
https://www.google.com/search?q=poverty+single+women+in+japan&oq=poverty+single+women+in+japan&aqs=chrome..69i57.8207j0j7&sourceid=chrome&ie=UTF-8

 

[ShokWaveRider]

If I am not mistaken, SS is the equivalent of a pension in UK.

"State" Pension. Not private or company pensions.

 

[Katsmeow]

Brit here (but living in France)... In answer to the question in the OP, I have the impression that the members of this forum perhaps come from an above-average income section of the US population, but that's also partly to do with the "E" in "ER".

I think it has to be remembered that this forum is called Early Retirement and so gets people interested in ER. Not everyone here is an early retiree and some are only a little early. But, there is a big difference in someone retiring at 45 or even 55 and someone retiring at 65. The resources needed for the former or more vast.

That said, I feel strongly that because of that some here apply that same standard to those retiring at a more normal retirement age.

In general, if a couple has good SS (or some other pension) then I don't think a 7 figure net worth is needed for most people. Most of my family who has retired at normal retirement age or even a little earlier, don't have a 7 figure net worth. They just don't nearly as much money as most here seem to feel is necessary.

 

[DeborahB]

As others have said, the people in this forum are not typical of Americans. Statistically, most Americans are not saving enough to retire at all. I know when I was working that I was appalled at the level of saving, or not saving, that I saw in my coworkers. I was working in IT, and these people were paid reasonably well. They took a lot of vacations and didn’t save money. I’ve always lived below my means and here I am retired at 62. I did inherit some money, but I could’ve done it without it. But importantly, this group is not typical!

The other thing to remember is that what we call pre-existing conditions, most countries call “your health history“. Think about that one for a minute!

We are essentially losing the middle class in America, and few are doing very well. The very rich are there, and there is a huge gap until you get to the middle class, which is shrinking rapidly, and those below that level.

The expectation in America is that everyone has a TV and perhaps a car. That everyone has a washing machine of their own. So the poor have an unusual amount of personal possessions. All in all it’s very strange.

 

[JoeWras]

The expectation in America is that everyone has a TV and perhaps a car. That everyone has a washing machine of their own. So the poor have an unusual amount of personal possessions. All in all it’s very strange.

TV's and Wash Machines can be had for cheap, cheap, cheap. Consider a 21" color TV in 1960 was about $500, or about $4,300 in today's money. I can get a 24" TV today for less than $100!

The equivalent very strange thing is mobile phones. Phones costing $1000 and up, with $100 per month charges are considered essential.

 

[MRG]

Go to Bangkok. Medical tourism is a 'thing' for a reason; they have great health care at very affordable prices.

Thanks. Bangkok and Mexico are under consideration as well as seeking financial assistance from the facility.

 

[Mdlerth]

That Scepter'd Isle

All in good natured humor. [emoji1]. I’ve never had a problem in any country simply because I’m American. I just find the depictions funny. Sort of like Americans think all Brits drink tea at 4:00 pm while speaking like “I say old chap, have you seen my bowler?”

+1

If UK television portrays Americans as exaggerated stereotypes, it's because they know we're good sports about it.

But forget about the media. Every time I've been to Britain I've been met with warmth and friendliness. Actual British people get along fine with actual American people. Why? Because most of the Americans they encounter are pleasant.

Also, we make an effort to speak the native language!

Back to the OT: I echo some earlier posters that, from a financial perspective, this forum is NOT typical of US retirees. I submit as evidence the "E" in ER. The more "E", the more "$" it requires.

From non-financial perspectives, it is more typical.

 

[JJpop]

Yep

I can't speak for the lack of wealthy Brits, but I think the reason that most members of this forum have significant assets is that those who don't can't really consider retiring early and would not be drawn to this forum.

Absolutely true.Same thing with a lot on the boglehead forum.
Hey,if you do not like sports you are not watching espn....same thing.
Sometimes I feel like I am poor after reading posts on the bogleheads.The real world is a much different place.

 

[ShokWaveRider]

I think "Significant Assets" is a relative statement. Yes some here could be considered "Rich" but I think in reality there are more folk with "Adequate assets" for them to FIRE and enjoy "Their Own Personal" Quality of Life.

I would think if you did a poll there would be significantly more folk here in the $1-3m net worth category than those in the $3 - 5 - 10m categories.

Now $1m ($760k Pounds) in Assets can be considered rich if one has only $50k or so saved.

 

[ziggy29]

TV's and Wash Machines can be had for cheap, cheap, cheap. Consider a 21" color TV in 1960 was about $500, or about $4,300 in today's money. I can get a 24" TV today for less than $100!

And if you are willing to take an older TV with a CRT, even an HD unit, you can probably get people to *pay* you to take those off their hands!

 

[daylatedollarshort]

lots of elderly die on the street, come on now, What a gross exaggeration. Both the US and UK have lots of safety nets for the elderly and anyone else that is struggling. Any facts and figures to back up your comments about Japan.

That is not very unusual here - "Nearly 400 dies on SF streets since 2016."

https://www.sfexaminer.com/news/report-nearly-400-people-died-homeless-on-sf-streets-since-2016/

 

[Vacation4us]

More than 50 percent of the deaths were the results of accidents, such as unintentional overdose, fall, drowning, being hit by a driver or exposure. Some 30 percent died of natural causes, 11 percent by murder and 4 percent by suicide. The largest single cause of death was accidental overdose at 35 percent, based on the autopsy reports.

Of those who died, 47 percent had methamphetamine in their system, followed by 45 percent with opioids. The City recently announced a task force to address methamphetamine use.

From the above sighted article no where does it say the elderly are dying in the streets. The drug addicts are.....

 

[Helena]

.

How much is needed to retire early depends on various factors. Two main factors are cost-of-living and lifestyle choices.

Thank God, I was able to comfortably retire early [age 55] on much less assets than most posters here because I'm single, debt-free and live in a less expensive part of the USA. One of the main factors for me was the answer to this question: what can waiting to acquire more assets buy me that is more precious than my freedom?

.

 

[theOAP]

In relation to the thread topic, the following article appeared yesterday in the UK commenting on UK retirees (65+). The Office for National Statistics is well regarded in the UK.

Statistics for any one country must be read as pertaining to that country only, and not as a comparison. Any survey will have those rated most satisfied, and a survey from the Titanic, after the iceberg, would still give a segment that were most happy with their situation (those in the lifeboats). How the overall happiness in the UK compares with other countries is another topic.

https://www.theguardian.com/society...retirees-most-satisfied-with-life-shows-study

"Retirees are the most satisfied with their lives, according to a study by the Office for National Statistics (ONS).

Freed from the daily grind of working, and especially the cost and inconvenience of commuting to work, pensioners say they have more time for recreation and spare cash to refresh their homes and to visit hotels and restaurants – all things that improve life satisfaction levels.

[.....] A retired person, according to the ONS’s calculation, will have a 4.84% higher satisfaction rating than the average person in some form of employment. An unemployed person will have a satisfaction rating 7.58% lower than the average worker.

The ONS said wealth was a key factor in improving the wellbeing of older people.

“One of our previous studies shows that higher wealth, particularly financial wealth, is positively associated with higher life satisfaction, and older people tend to have higher wealth,” a spokesman said."


Links in the article lead to the following statistics for UK retirees and is based on the average (median) Gross income per week including all segments (couples and single units), of all ages 65+, of UK retirees.

Sources of Income (Table 2.1):
Benefits (the State Pension) - £223 ($290) or 42.7%
Occupational pension - £156 ($203) or 29.9%
Personal pensions - £22 ($28) or 4.2%
Investment income - £36 ($47) or 6.9%
Earnings (work) - £81 ($105) or 15.5%
Other - £4 - ($5) or 0.7%

Total £522 per week ($678) gross

$1.30 = £1.00

The following page from the study indicates younger UK pensioners are more inclined to have income from occupational and personal pensions, resulting in larger per person incomes.

https://assets.publishing.service.g.../pensioners-incomes-series-2016-17-report.pdf

Note, the figures given on this page are generally for AHC (after deduction for income tax, council tax, VAT, and housing costs).

The raw data tables may be found on this link:
https://www.gov.uk/government/statistics/pensioners-incomes-series-financial-year-201617

It's also worth noting when comparing US Social Security to the UK State Pension, aside from the commonality of earnings contributions, the two systems are entirely different in respect to benefits. Generally, in the UK, someone with 35 years of minimum contributions (12% of earnings on £166 ($216) per week) will have the same final State pension weekly benefit when retired as someone with 35 years of maximum contributions (12% of earnings on £962 ($1,250) per week). Only the number of years of contributions are used to calculate the UK State pension. There is no WEP, no maximum income threshold during contribution (but over £962 is at 2%), and certain voluntary contributions can be made to increase total years before retirement.

 

[BigNick]

It's also worth noting when comparing US Social Security to the UK State Pension, aside from the commonality of earnings contributions, the two systems are entirely different in respect to benefits. Generally, in the UK, someone with 35 years of minimum contributions (12% of earnings on £166 ($216) per week) will have the same final State pension weekly benefit when retired as someone with 35 years of maximum contributions (12% of earnings on £962 ($1,250) per week). Only the number of years of contributions are used to calculate the UK State pension. There is no WEP, no maximum income threshold during contribution (but over £962 is at 2%), and certain voluntary contributions can be made to increase total years before retirement.

The UK and the Netherlands are the only two countries that I know of where nationally-administered pensions are paid at a flat rate, regardless of contributions. They are thus both in some sense a progressive form of taxation: Someone who contributes for 35 years at the minimum rate in the UK could be a net gainer after only 7 or 8 years of retirement.

It's perhaps worth mentioning that in the UK, unlike the Netherlands, the "National Insurance" employee deduction is not even notionally hypothecated towards pensions; in effect it's the low end of the income tax scale. Some people think that it covers pensions and the health service and unemployment and other social welfare benefits, but it doesn't come close, even though paying NI ("your stamp") is generally the price of admission to most of those benefits.

 

[theOAP]

They are thus both in some sense a progressive form of taxation:.....

Perhaps we should also note IHT in the UK.

Inheritance tax in the UK is applied to the aggregate sum of all assets over £325,000 ($422,500) per person, or £650,000 ($845,000) for a married couple (if survivor is the sole beneficiary). If there are children, the amounts increase to £500,000 ($650,000) per person, or £1,000,000 ($1,300,000) for a married couple.

The UK Inheritance tax is a flat rate of 40% on values which exceed those limits when a single individual dies, or the surviving spouse dies.

It's for this reason the average UK individual, unlike the US, may avoid substantial wealth accumulation in their older years. Most downsize their home later in life since any gains (no limit) are tax free in the UK, at any age.

Obviously, like anywhere in the world, there are UK individuals in the upper wealth segments who have different priorities and approaches.

UK individuals tend to "gift" assets. If the person giving the gift lives for 7 years after the date of the gift, the gift is tax free, although there are multiple specific rules concerning the gifting and later life care that may result in tax due.

https://www.which.co.uk/later-life-...hVn-AXeAbRnBw30H3coHrsoQFZC_dT1hoC0-4QAvD_BwE

I'm out of touch with France, but when I lived there a "Wealth Tax" existed as part of the yearly tax return, although the threshold was quite high.

It's dangerous to compare countries on individual data since government intervention also plays a part. In the UK there are substantial tax free savings vehicles, no capital gains on the sale of the home, tax free allowances on standard investments (such as normal savings accounts or dividends), etc., minor benefits such as the winter fuel allowance and free TV license for 75+, free bus passes for the 65+ (anywhere in the country) since, due to all forms of public transportation, far fewer have a need for a motor vehicle. This is in addition to the National Health Service as mentioned in previous posts.

One of the downsides for the UK are multiple stealth taxes galore and no allowance is made for those 65+.

 

[ivinsfan]

That is not very unusual here - "Nearly 400 dies on SF streets since 2016."

https://www.sfexaminer.com/news/report-nearly-400-people-died-homeless-on-sf-streets-since-2016/

The article says over 85% of the tragic deaths were due to some type of substance abuse. I don't see ages reported. I was commenting on the statement that the elderly here were sent to the streets to die due to lack of money.

It's a tragedy for anyone to die on the streets of a major city in any country.