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Comment Don’t ignore the facts: retirement costs Rod Came MSA South East Last month I wrote about state pensions and the misleading manner in which they are portrayed. But let’s forget that for a moment and concentrate on the future, your future, because a source of income to replace your working day earnings will become more important to you as retirement approaches, which it does at an increasing speed as it gets closer. Of course, you could keep working until you drop, providing the clients keep coming, but do you really want to? Later years of life are to be enjoyed, the daily grind is past, it is time to relax. That is a fallacy, of course. If you are lucky enough to have a house and a garden there are innumerable tasks that will occupy your time. All retirees say, “I don’t know how I found time to go to work”, and it’s true. At the moment the average household income is £54,000 pa which appears to be quite a large amount of money. I expect that many ADIs whose partner works will have a gross income near that figure which ensures a reasonable standard of living. And then retirement arrives. All of a sudden, unless other provision has been made, the family income could fall to about £20,000 pa. Whoops! The mortgage should have been paid off but all the other household bills remain, and more importantly, you have a lot more time on your hands, all those house and garden tasks soak up money like there is no tomorrow. Lunch out with friends becomes a regular habit in normal times, as does getting out and about, National Trust, English Heritage and holidays do not come cheap. The car will have to be paid for from your reduced income, not set against income tax, so will your phone. It all adds up. Some years ago, I wrote that the best way to make tax-free money is to buy a house, then when you can, buy a bigger one, again and again, until you find that the two of you are rattling around in a small mansion which is far too large for your needs, then you can downsize and pocket the financial difference. I still stick by that premise, but right now, certainly in the South East, the property market has gone mad. Sheds sell for zillions; many houses sell the day before they go on the market and people are offering way over the advertised price to secure their intended purchase. Now is not the time to sell or buy. But when will it be? Frankly I do not know. No help there then. When the housing market does level out, as it will, that might be the time to make a move either up-sizing or down. If you are lucky enough to own a £800K house, you could go to a £500K bungalow and have a tax-free profit of about £300K. Having gone smaller with all that money in the bank, that in itself becomes a problem. What to do with it? £300K sounds a lot, but it isn’t. With the state pension being only £20K a top-up will be needed, probably at least £10K pa, more as the years pass. Interest rates are pitiful so capital growth is negligible, it may improve but only if prices rise, which then eats away at capital. The same capital that has to last 20 years or more. I am sorry to have to paint such a bleak picture and I know that the truth hurts, but it must be faced up to, sooner or later. And that is the trick – facing up to the reality and then taking steps to alleviate it within your means. I am not a financial consultant so do not take my comments as gospel, take professional advice, use your common sense and consider all your options. I wish you a happy retirement. I’m enjoying mine. 20 NEWSLINK n AUGUST 2021
For all the latest news, see www.msagb.com Mirror still biggest threat to candidates’ L-test success A survey by AA Driving School has revealed the top 10 reasons for failing the driving test this year. As is often the case, poor observation at junctions is the top reason for test failure. Issues with mirrors, junctions and responding to signals such as traffic lights and signs have remained the top two reasons for test failures for the past five years. However, in 2019/20 faults for steering, reverse parking and moving off safely all ranked higher than this year’s data. The top 10 reasons for failing a driving test in 2020/211 were: 1 Junctions (observation) 2 Mirrors (change direction) 3 Junctions (turning right) 4 Response to signals (traffic lights) 5 Control (steering) 6 Response to signals (traffic signs) 7 Response to signals (road markings) 8 Move off (safely) 9 Positioning (normal driving) 10 Move off (control) But it’s not just learners who are a bit intimidated by the L-test; many experienced drivers say they would dread taking a test today because of the need to perform a parallel park. Drivers were asked, if they had to re-take the driving test, which skills or manoeuvres they would find hardest to demonstrate to pass. The top five most challenging parts of the test were: 1 Reverse park / parallel park 21% 2 Reverse around a corner 11% 3 Drive at appropriate speed 8% 4 Park in a bay 3% 5 Observation 3% One third of women said they would find parallel parking the hardest part of a driving test (32%), compared to just 16% of men. However, men were more likely to say they would find driving at an appropriate speed more difficult (10% men vs 5% women). Licence changes hint at further moves in future A consultation on changes to the laws on driving licence acquisition and the motorcycle riding test have led to a number of recommendations. It is proposed that in future, any candidate who already holds a full manual licence entitlement for a car, lorry or bus who passes a B+E, C1, C1+E, D1 or D1+E test, using an automatic vehicle, will get both the manual and automatic entitlements for that sub-category It has also been recommended that the Minimum Test Vehicle Requirement (MTV) for motorcycles used for the A2 test be reduced from 395cc to 245cc, provided that the other MTV requirements are still met. The recommendations are awaiting due legal processes but assuming this is completed successfully, the regulations will be amended accordingly in the New Year. NEWSLINK n AUGUST 2021 21
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Page 8 and 9: News DVSA confirms new theory venue
Page 10 and 11: News - B + E Trainer row B+E traine
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Page 26 and 27: Towards your CPD Looking to advance
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Page 30 and 31: Regional News Media should be taken
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