Weekend reading: Make mine a triple, but what about the hangover?
Next post: Our updated guide to help you find the best online broker
Previous post: Why you should invest an inheritance in a pension
≡ Menu
The Latest Articles
Essential Reading
Better Investing
Property Posts
Get Money Motivated
Monevator is a place for my thoughts on money and investing. Read our disclaimer. Subscribe to get all our free posts via email. Follow us on Twitter, Facebook, or via RSS. You can also send us a message.
Copyright © 2007-2026 Monevator. All rights reserved.
Disclaimer: When investing, your capital is at risk and you may get back less than invested. Past performance doesn’t guarantee future results. All content is for informational purposes only. I make no representations as to the accuracy, completeness, suitability or validity of any information on this site and will not be liable for any errors or omissions or any damages arising from its display or use. Full disclaimer and privacy policy. This site uses cookies and features affiliate links.
Comments on this entry are closed.
FS > Why it’s easier to FIRE at 35 than at 50
“Why it’s easier to FIRE on we are the 5%+ job at 35 than at 50″
Fixed that for you. For the love of God separate your variables, man. Firstly compared to Joe Public FS was very highly paid. You were standing next to the GFC and knew what to do with it. You were young enough to start over if need be, and you were unencumbered by ankle-biters
No, most people can’t retire at 35 even if they are young free and single, because they don’t earn enough compared to the cost of living. If they did, doing it on a high paying job next to the GFC was a lot easier than doing it on the same high-paying job now. There’s a reason for the HENRY brigade even if the violins are small compared to the LENTS – Low Earning Totally Stuffed
I retired a bit after 50 subsequently lifted by the ramp out of the GFC, I didn’t really have enough at the get-go but a rising tide lifts all boats. Were I 15 years older and thinking about it now in the same situation, no, I wouldn’t be able to get there from here. Because: valuation matters. To an extent I didn’t really understand at the time.
FS is inferring the general from the particular. He is right to call out the increasing responsibilities many people accrue across the life arc, particularly the childed. He is right to say that you are finished at fifty in many knowledge jobs. But he’s wrong to ignore the different valuation between then and now, and the vast majority of even the erstwhile middle class who can’t retire at 35. Even someone on the FS equivalent salary at 35 maybe can’t get there from here given the market valuations as they stand.
As for the generational wealth issue, I’ve never understood why parents with fancy-schmancy ideas of the worth of the fruit of their loins always want to outsource this job. Teach your kids about money, about values, about how to live a good life. My working class parents tried. They didn’t stop me making stupendous mistakes like buying a house at an all-time high, on an endowment mortgage. No. The job of teaching your children about how to live, and money is that they can recognise the mistakes they are making much faster and just stop doing that. You cannot forestall the errors of inexperience, but you can make the recovery faster
> The most expensive private universities will cost over $160,000 a year in tuition alone by then.
That ain’t gonna buy FS’s kids a good life. The light has to shine from within, and it is his job to light the spark. He seems thoughtful about this so no doubt he’s done the job. The 4*$160k invested will be a rounding error. Not all wealth is financial, and much valuable wealth cannot be measured.
The Institute of Fiscal Studies (IFS), and increasingly the ‘Guardian’, are pretty much the usual suspects in terms of long term opposition to the triple lock. For me, the most important UK political/economic factors that need addressing are…
1. The return of the UK to the European Single Market and the EU Customs
Union. The economic damage in not doing so is massive and permanent.
I caught the tail-end of a late afternoon BBC R4 programme a few days ago. The gist of what was being said was that the very well publicised figures used over almost 2 decades to describe Britain as productively poor were in fact false.
AI incoming..
“..The BBC Radio 4 programme that recently highlighted this issue is More or Less, hosted by Tim Harford. The specific episode, titled “Has the UK’s productivity puzzle been solved?”, aired on Wednesday, September 23, 2026. Key Details from the Programme: The Error: The Office for National Statistics (ONS) revised its historical data after fixing how it calculates total hours worked, essentially realising it had failed to properly account for the fact that British workers take holidays. ..”
Could perhaps merge the state pension into pension credit as a way to means test it within the existing framework, then it’ll be more sustainable to keep the triple lock and less rush to raise the state pension age
That graph, its for a childless couple, £600 per week, of which £480 could be state pension and only £120 per week personal pension. There might be a case for dropping the triple lock, but not yet, perhaps when auto enrolment has run a few more years.
As for ski’ing, an alternative might be found in Jenny Joseph’s poem Warning.
Can you elucidate on your graph comment?
“However looking at the graph and remembering that the pension triple-lock was introduced in 2011 suggests a more generous State Pension has done much of the heavy lifting.”
What I see in the graph is that pensioners caught up fast in the years prior to 2011 and that the slope actually decreases post 2011 (albeit slightly), but at least it then tracks the rest of the population.
This is just a graph question – not intended to be a comment on the 3-lock itself 🙂
I wonder if the general electorate (including retired people) would accept state pension just being linked to CPI, in other words a single-lock. I find it hard to believe they wouldn’t. After all, keeping up with inflation is surely all that matters. If I’m right, why are the politicians scared of touching the triple lock?
Could it be that every time the press talk about removing it, they don’t offer up a sensible alternative (like the single lock) ?
I had the assumption the state pension is some peculiarly British thing….. until …. I looked into it and found that other countries provide better benefits:
https://www.lv.com/pensions-retirement/articles/average-pension-by-country
* Iceland: €35,959 (£30,251)
* Luxembourg: €31,835 (£26,778)
* Norway: €30,879 (£25,972)
* Denmark: €30,211 (£25,410)
* Switzerland: €27,010 (22,719
* Austria: €24,349 (£20,480)
* Netherlands: €24,092 (£20,264)
* Belgium: €22,577 (£19,000)
* Sweden: €22,436 (£18,882)
* Ireland: €21,766 (£18,318)
Even the US provides an average benefit of $2,179 per month, and it can be a lot higher.
Again, a comparison rarely talked about.
I think us Brits just love the idea of a bad deal.
On the topic of inheritance, I’ve heard from a couple of friends that their financial advisors are recommending spending more of their investments in retirement (with Die with Zero mentioned too). I was surprised that constituted good financial advice.
@ SoonToBeEarlyRetiree you’re not comparing like with like. I only know about France, but the state pension there contains some element that is associated with how much you earned. This is not really the case in the UK, there’s a link with how long you paid NI but that’s it. I believe there are earnings-related elements of statutory pension in some other European countries. When you compare with the US remember that healthcare is chargeable there, though IMO this is starting to happen here too through rationing.
Way back in the day, the UK had some element of linking of how much you earned, the defined benefit company pension. My dad retired on one despite being a blue collar worker. I am currently living off mine, I am not yet grey of beard enough to get the SP. My company pension would be tolerable in the range you cite, despite my nominal working life being 23 years. I worked 30 years, but the 7 years I paid into SERPS is written off due to the new SP. I am chilled about that because I swung 8 years at class II voluntary rates but I am yet to see a bean of that investment.
Despite being a potential beneficiary I do think the 2.5% part of the triple lock is getting offensive given the other calls on the public purse. Indeed perhaps uprate Pension Credit with the triple lock, for everyone else stick with the single lock of inflation – an RPI linked annuity is shockingly dear but a level one plus SP has better resilience. It is true that you will fall behind earnings rises, but there is sufficient research shoving that people spend less as they get past the go go years which are roughly up to 70-ish so falling behind the workforce is probably OK.
Inheritance has an emotional component beyond money, which is also enormously important!!
Personally, I would have been devastated if my parents hadn’t prioritised legacy planning to at least some degree. It is an act of love.
As to the money itself, my sister is 5 years younger and our ‘inheritance’ dramatically stabilised her economic future.
IMO, I’m part of the last generation able to move economic brackets alone. Inheritance matters a lot.
The main problem with inheritance as a concept is that with increasing longevity then your nearest and dearest may well be in their 50s and 60s when they get it. Or put another way – about 30 years after it has peak impact for them.
So I am in the camp of if you haven’t managed to sort this out by the time they hit 30 then you might as well spend it or keep it to fund your probable care needs, which is another unfortunate consequence of your longevity. If you can manage it, gifting when in your 50s makes you feel better and more optimistic than saving and then being upset when an indebted state comes looking for another bite at your savings long after you stopped earning.
The debate around triple lock is just another sign of how we have ended up with a really poor quality professional political class.
In the cover picture for Lindsay Crouse’s “Quitting”, shown in the Guardian Sticker, the scissors are defective: They cannot cut, because when the finger-holes meet, the blades must still be open. They were drawn by someone, or something, who doesn’t understand how this particular tool works.
It’s fascinating how much this lack of attention to detail in a simple cover picture provokes mistrust in the author’s competence.
One of the articles, which I had expected to see appear in this weekly roundup, and doubly so because of the Monevator content, is the FT’s John Burn-Murdoch’s “Unpacking the real fiscal costs of immigration” (Paywall, https://www.ft.com/content/124c1cf0-4885-495c-a907-a5217d589f9d).
Burn-Murdoch points out that, relative to other European countries, the UK fiscal and benefits systems make low-income immigration far more costly here: Low earners make little fiscal contribution, because of high contribution-start limits, and yet can receive a high flat-rate pension by relying on contribution credits.
France and Germany demand more paying in, and scale the payment out to the level of contribution. The British system has unintentionally been designed to make low-income immigration significantly more expensive for the state.
Of course, there are broader worries about sustainability in the French and German public pension systems, but those are generally related to high-value pensions. The British problem is at the other end of the income scale.
@johnathan – probably why they quit, they just couldn’t make scissors that worked
My nearest and dearest are indeed now in their fifties (3 kids) as we are in our eighties
They were certainly well warned from a young age that inheritance was doubtful as this was monies for the oldersters to spend
However the the other side of the coin was that nothing was stinted on their education (no private schools) -university fees all paid for five years and no student debt
All seemed to do OK -got good jobs,married with kids of their own
Their will in fact probably be some inheritance-will be interesting to know what they do with it as their kids are all now entering University and we are still going but we will never know!
xxd09
@TI – Would your reasoning supporting IHT be far more justified if it were implemented based on what each beneficiary gets, applied to each beneficiary, potentially means tested (if possible)?
Wouldn’t the inclusion of unspent pension in IHT also be more justified if the access age for large pension pots depended on the size of the pot, and not simply linked to state pension age, particularly for those who have stuffed their pension over the last decade or so with the understanding the unspent would pass on to their heirs under the current taxation system (i.e. they pay income tax on it, unless death occurs before a certain age, etc)?
Ha. Yours truly hails from the deepest, darkest corner of Eastern Europe, a place that could have cosplayed as Mordor without a single change to the set, where making it to adulthood earned you a round of applause and possibly an extra potato. Inheritance? Generational wealth? We assumed those were characters from a Victorian novel, the sort that died of consumption in chapter three. So you’ll forgive me if my take comes seasoned a little differently from those of you whose ancestors spent several peaceful generations accumulating silverware, rather than burying it in the garden every time a new regime rolled into town.
Hence my somewhat samurai outlook: any day could be your last, and anything you own is merely on loan until the government remembers you exist. Which is why I’m a solid 140% against inheritance tax. I’d like my descendants to land on something soft for once in our family history, ideally an actual cushion rather than a rumour of one passed down by Great-Grandma. And having possibly become the first person in my bloodline to own anything worth taxing, I’m not keen on the state helping itself and passing it round the workshy, a crowd whose idea of hardship is the Wi-Fi dropping mid-episode, and who’ve never enjoyed the character-building trifecta of no food, no heating, and a lovely long queue for humanitarian hand-outs.
@ermine(8)
I suspect your assertion that the seven years you paid into SERPS was written off due to the new SP is not actually true. In 2016 your SP foundation level would have been calculated using the new and old systems, and the higher used. The new system would have taken the full new state pension and then applied a contracted-out deduction. Because of the many years you spent contributing to a contracted-out DB scheme, it is likely this reduced your foundation amount, on this calculation, to the basic state pension. The old system OTOH would have taken the basic state pension and then added any entitlements due to SERPS/S2P contributions. Your seven years contributions would likely have made the old system calculation produce the higher level of foundation amount. As a result you probably would have had to make fewer years voluntary NI contributions to reach the full new state pension than if you had no SERPS contributions in your record.
@DavidV I make that assumption because I have 38 qualifying years, I continued to make Class II contributions after a gap since leaving work until the forecast said
> You cannot improve your forecast any more.
whereupon I stopped. That’s still quite a bit more years than the nominal spec of 35. But I’m not gonna bitch about the ROI on Class II SP contributions. If they’re kind enough to give me 90%+ off annuity rates I ain’t going to pick that nit.
@ermine (18)
Well, as I mentioned in #17, you need more than 35 qualifying years because of the years you spent in a contracted-out DB scheme, i.e. paying the reduced rate of NI. I still contend that it is very possible that you would have needed more voluntary NI contributions (or even more than 38 qualifying years if you prefer) if it had not been for those seven years of SERPS contributions, i.e. the years you were paying NI at the full rate.
SoonToBeEarlyRetiree….
I think your comparator is very understandable but ultimately flawed.
Without wanting to come across as direct, there are roughly 8.3 billion people on the planet. There are around 850 million people in Europe (excluding Russia and Turkey) and the US.
We need to consider, why should roughly 10% of the worlds population either benefit or potentially benefit from a retirement pension, well in excess of anything the other 90% might be coming their way.
The short answer , I feel is the pension system enjoyed by the 10% is totally now unsustainable and isn’t going to last. The US have a better shot at keeping the show on the road longer than Europe given their reserve currency but time is running out on these shores.
There is next to zero chance any government in the UK (or France for that matter) will make the necessary changes until their hand is forced by the bond market. Which could be at the next budget or in five or ten years. I haven’t a clue but it’s coming down the track.
My best guess is the UK keeps the triple lock going until a fiscal crisis requires a change. It’s political dynamite to make any change. In any event, fiscal drag will mean an increasing portion of retirees income will subject to tax any way. Give with one and takeaway with the other.
The only practical answer here is the devil take the hindmost.
Take what you can whilst you can.
@martin — Hmm, I take your point. I eyeballed it and saw a jump up to 2011/2012, but you’re right that the trajectory was already set and it’s not clear from the graph that the triple-lock did *too* much heavy lifting. Other sources suggest it was a big factor, but less clear here. The main point (2026 crossover) is clear enough though.
@JtE — It’s no longer possible to link to FT articles for free unless one uses something like Archive, which I think is against the spirit of their paywall, at least for a roundup like this. I do sometimes still link to paywalled FT articles (with a Paywall notice) but they typically have to be very on-target.
Thanks for all the comments everyone!
@Gudwin
I hear you. The UK population has no idea of what goes on for most people on this planet and has an outrageous sense of entitlement. Life and our political systems are more fragile than many think. Looking after our nearest and dearest to the best of our ability and not see it stolen/destroyed by the state is a commendable endeavour. Hence I’m not supportive of IHT either.
I take a fairly relaxed view on inheritance tax.
I’ve never built my financial plans around the expectation of a windfall, so if I do eventually receive an inheritance, paying the required tax on it isn’t something I worry about.
It’s interesting to see how differently families handle this. I have a good friend whose family spends a massive amount of time and energy trying to structure their estate to avoid tax. While they have a few more assets, there are no grandchildren, so the long-term destination of that wealth isn’t even clear. It often feels like a lot of unnecessary stress and administrative burden.
Ultimately, building a solid financial foundation on your own merits brings a lot of peace of mind. It frees you up from spending years worrying about tax loopholes and allows everyone to just focus on enjoying life.
I’d probably feel different if we had land etc :0)
IHT ? I would rather give my money to my children than to the state. Seems perfectly understandable to me.
Spend your pension advice ? Yep, had that. The idea is would you rather spend it and/or gift as you see fit, or hand 40 % over to the state. From my point of view everything I spend gets a 40% discount.
Triple lock ? Has to go. It will be a useful counterweight to welfare cuts affecting the young.
Winter fuel allowance ? Yep scrap it, if only to prove you are not hostage to the backbenchers. Tuck a bit extra on to pension credits perhaps.
Do something with the Home Office whilst you’re at it. Collateral damage accepted.
Think all hell is coming in FX.
As ever, the issue with IHT from my perspective is not how people would like to be taxed individually, let alone whether they would like to be taxed at all. 😉
I mean, personally I’d like website owners to sit in a special 5% income tax bracket. And I’d like to spend all my extra untaxed money on fancy Mexican food, tropical fish, and maybe a gratuitously specced narrowboat.
But I don’t expect the State to cater to my whims. 🙂
The issue is where should the State find the next marginal £1 of tax revenue? My point is always that I would rather that come by taxing the windfall that arrives unearned to a living person from a *dead* person (who may well have earned it, but is now dead so can no longer benefit from their labours.)
The recipient generally will have done nothing to earn the windfall, short of performing certain minimum social functions and not alienating their parents. (Bequests to fireman who rescue precious cats and whatnot notwithstanding).
So I’d rather that someone working doing something useful and productive paid less tax, and the recipient of those unearned windfalls paid a bit more on their unearned gains. That’s it! 🙂
I’m not against a small amount of inheritance tax-free, a few tens of thousands perhaps, but after that I’d whack the rate right up. And figure out some way close all the loopholes (pinch me I’m dreaming).
This isn’t a minority position among economists. It’s considered a pretty rational posture, I’ve learned since I first started arguing it on this blog.
But it is a minority position among the British public, and even Monevator readers, who don’t seem to understand most of them spend most of their lives actually paying higher income taxes to support lower IHT for an increasingly wealthy — and arguably neo-feudal, thanks to property — over-class.
So fear not, nothing is likely to change… 😉
(Of course I don’t think inheritance tax can replace income tax, or any of the absolutes that people like to traduce arguments to on the Internet. I am talking about the next marginal £1, not binary choices.)
It has to be a fairly sizeable estate to pay IHT, the allowances are generous. I can only think of one household in my family or acquaintance that is likely to be subject to IHT. If it’s a concern just give the money away in accordance with the gifting rules.
It looks like the triple lock will now be reviewed, though our right wing press already seem very exercised about it.
@ Larsen
The triple lock change seems pretty minor – the earning link has become ad hoc rather than an annual test. Will this really create headroom for more national freebies?
Labour have been much worse than I feared (expected) – time for a real Conservative Party, please…… 2027 hopefully
I’m very much regretting my gilt purchases over the last 30 months!
We need an experiment comparing the childless TI with one that has some, and see whether the IHT position is the same. Unfortunately would require parallel universes to be a thing, or TI to have an identical twin with a family.
At least Burnham now coming out with some bold ideas, makes you realise how timid starmer was.
Conservatives still dead in the water.
@Rhino — An experiment that proved I can be as atavistic and irrational as everyone else wouldn’t prove very much. People are people, and while I am different I am a person.
Although I actually had a shocking experience in the last few weeks on this score.
Some younger friends were discussing the trolley problem (“would you kill a stranger or X”) and one of the group said they’d save their dog and kill the stranger, and they weren’t at all apologetic about it. I was completely shocked and debated both the literal truth of their claim and the ethics. But they did an Instagram poll and nearly 90% of their friends agreed they’d save their dog.
“I owe that stranger nothing” was one of the standout quotes my friend highlighted in the recap.
I’m still sceptical (or hopeful!?) that this result didn’t reveal how most of these people would actually behave if faced with the choice of a frightened obviously human being on a track versus an uncomprehending dog.*
But still, it really made me realise how people vote for Trump etc, all these things that seem so obviously foolish to me.
I like to think I hold myself to a higher standard than what seems best for me personally at all times, whether that be being sad about a dog or having an extra £500 at the expense of a proper education for poor children or decent equipment for our soldiers or whatnot (within limits, which I’d argue and agree we’re bumping up against here in the UK as a share of GDP).
Anyway, compared to saving your dog because you like it and know it versus saving a living, breathing, thinking feeling human being, the human / parental urge to give as much money to your children versus paying for the State (when you’re dead) is totally understandable to me.
It’s not empathetic rocket science! 😉
However we’re talking about making laws and legislation, not how any particular citizen would prefer things for them.
As I always say around this point, we have to pay for a state.
Most of the advocates of low/no IHT aren’t advocating for (or would survive long in!) a Mad Max dystopia.
So how do we pay for it? I’d rather tax didn’t-earn-it recipients of windfalls than people who worked or risked their own money on a venture.
The irony that no-IHT supporters don’t seem to realise is that they’ve been income taxed all their lives too. They use it as a defence for low/no IHT (“I’ve already paid tax” — correct but now you’re dead, I’m concerned about the recipient) but they don’t seem to realise they’d have earned more marginal £1s under a low income tax rate while working too (collection / enforcement issues notwithstanding etc)
But yes, people. I get it. I just don’t think it’s sound economics or in the long run sound politics. (Neo-feudalism etc).
*For the avoidance of doubt, I absolutely love animals and have and would choose their company over people a lot of the time! But a dog is not the same emotional / intellectual creature as a person, not as integrated into as many lives, not subject to the same basic social contract. All the young people in the original discussion were at a BBQ happily eating chicken thighs and steak by the way, so we’re not talking vegan activists here…
Ok so now we need a parallel universe where TI owns a dog. Experiment is getting more comprehensive.
It’s a fair observation, everyone’s rational until they have some skin in the game. Then irrationality and atavism rule (I’ll be honest I had to look that word up)
> We need an experiment comparing the childless TI with one that has some
I have never, ever, understood why the hell these parents that care so passionately to avoid IHT don’t give to their kids while they are alive. At least some – then they get to see the gift in action. In the case of parents -> children, when they cark it their kids will be what, 60s? In general the big squeeze for most relatively well off MV readers will be late 20s to mid 40s and for the childed that probably runs through to about fiftysomething, particularly if you have airs about being the 7% paying for education. 60 is too darn late. Be no King Tut. If you start gifting in your 50s you can take the edge off it in the fruit of your loins’ thirties. Live another seven years and no IHT to pay, and anyway parents can leave £1M if their house is part of the estate or if they sold it to downsize.
ermine-That was certainly my attitude to my kids and they were well told from an early age -their education was to be paid for ( local comp ) ,their university fees and expenses were all paid -no student loans but that was going to be it
All monies left was for the parents-there might be some inheritance but don’t count on it
Of course if some disaster happened help was available-one kid needed a deposit for a house (£5000)
All got jobs ,all married with kids
Both parents are 80 now -the three kids are 50+
There probably will be in fact some inheritance but what they do with it will be interesting-we won’t be here of course
xxd09
@ermine – I think it’s not knowing how much they may need to cover care costs later on. Give too much away and you could be compromising your independence. Note Tories have gone for IHT in a big way today. Net result, rich boomers running out and snapping up mansions. Granted they’d have to get voted in first, so it’s totally hypothetical mansions.