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sorry, but...pensions

PostPosted: Sun Aug 27, 2017 2:31 pm
by me_in_japan
um, right. yes. World's most boring thread title. My apologies.

So, I was wondering:

Does anybody here have a pension in their home country? My dad (as is his wont) has been getting on at me about pensions. He reckons it's the best investment one can make. After some research, it would appear that, for us Brits at least, one can have a pension in Japan and also a UK pension, assuming one has paid for 30+ years of national insurance and is over 68. Now, after some digging, it appears I have 8 years paid up already, mostly thanks to being a student, and therefore if I pay them back for a few years and pay them each year for the foreseeable future, I could find myself in receipt of 122quid a week come the dim and distant future.

So, does anyone have any thoughts on the advisability of this? I'm just information gathering at this point, so any opinions are welcome :)



Re: sorry, but...pensions

PostPosted: Mon Aug 28, 2017 8:54 am
by Primarch
Hmm, quite the tricky one. Pensions are certainly worth it I reckon, especially if you plan on living for a long time. National Pensions though are another matter. Both Japan and the UK have aging populations which are putting a strain on their public welfare systems. Currently the Pound-Yen exchange rate is good for sending money home, who knows where it will be in 30 years. Between fallout from Brexit and (in your case) a potential IndyRef2, I'm not sure how beneficial a UK based pension would be. It could be great, but it might not be worth it compared to other options. Depending on how you view potential British governments' chances of successfully managing the country's finances and/or fulfilling their promises is also something to take into account.

Some other things to consider:
How easy will it be to pay every month? How much will you have to pay?
How easy will it be to transfer the money back to Japan (assuming you plan on staying here forever)?
Will the fund you choose be payable to your wife/kids in the event you snuff it early?
Would an international private pension be better than a national public one? I believe that most of the private schemes have insurance in case the company goes under.
Would you be better off investing the money in stocks and shares? (or limited edition minis?)
How about a high interest account?
Are retirement ages going to change?

I'd suggest popping along to somewhere like Houken-no-mado-guchi and getting some information about other options. I went there a few years back and they have a lot of information.

Personally, I have the following pension/insurance plans:
Japanese National Pension
Japanese National Health Insurance
Private Life Insurance - It's a wierd system with an inverse payment system. The sooner I die, the more my wife gets. :shock: Better watch my back. It also pays a fixed amount for my funeral costs.
Private Health Insurance - Covers my stay in hospital for up to 60 days as well as a few thousand yen per day in extra costs. Covers the 30% of medical costs I'd normally pay on the National Health system, though it's only worth claiming on serious bills.
Private Savings Scheme - I pay in a fixed amount per month until I am 65. At any time I can cash out but I have to pay a small penalty (10%ish). If I cash out when I am 65 I get everything I paid in plus a small amount (Maybe 5%ish). However, every month after 65 I wait, the company increases the pot by the same amount I paid prior to being 65. The longer I leave it, the better it gets. It's payable to me or my wife as well. (This is my life-insurance insurance to make sure I don't have to watch my back too closely).

Anyway, lots to think about. Good luck.

TL,DR - The nasty Toaries will steal all your money anyway, so why bother. :lol:

Re: sorry, but...pensions

PostPosted: Tue Aug 29, 2017 2:10 pm
by me_in_japan
Thanks for the comments, Prim - a lot of good points there. Some of them require further research on my part, but some of them I can address from memory, specifically:

it's currently about 720quid a year to pay for national insurance. A few years ago it was 690 or so. It's gone down (a bit) and up (a bit more) in the past few years. It's based on inflation, I guess. That's currently about 10man en per year. I can definitely cover that (currently.)

Pensionable age is 68 just now. This may change (and probably will), but it can only go up so far before people start dying at their desks. I'm an optimist, and am going to go forward assuming I won't die before I'm 68. If I do, then I won't have anything to worry about, will I? :?

As for transfering money, the good old UK government will actually pay it straight into a foreign account, if you ask them to.

I worked out that at 720quid a year for 30 years (paid in before you hit 68) and 120 quid a week (paid out after you hit 68), you'd need to live to about 71 and a half to start making a profit. Obviously, the longer you anticipate living for the better sense it makes, but 71 and a half doesnt seem like a particularly audacious target. This figure wibbles a bit once you factor in tax (paid to Japan only, btw), but it's a matter of months, not years.

The other options you mention are certainly all worth investigating. Like yourself, I also have Japanese National Pension and Health Insurance (as a dependant on my wife's payments, but it still counts). The Private stuff, I don't have, hence my current exploration of UK pensions.

Overall, I think I'd like to investigate private pensions/life insurance, but I'm leaning towards maybe getting one as an addition to, rather than as a replacement for, a UK pension. 10man a year is not bank-breakingly onerous, and while I can certainly envision a future where the numbers change for the worse, at the moment the risk/reward ratio is very tempting.