The death of the pension?

[pointedstarman]

vladcjelli said:

Except that according to propaganda, most of the "oldsters" will have been told that they will live till they are a hundred and ten, and due to changes in the pensions, will be required to continue working until they are 80, thus funding the rest of us.

An issue I've not really got a good answer for - if we all work until we're 67/68/../80 where do the jobs come from? Young people are still coming in the front of the employment sausage machine but there's going to be a period when fewer are leaving because they need to work longer. Anyone seen a 'policy' statement on this?

Seems to me the maths, whichever way you cut it, doesn't stack up.

[cymtriks]

The article linked in the OP mentions a loss of faith in pensions and a maze of regulations.

Lets look at my recent dealings with the world of finance

Getting a bank to accept a power of attorney
Took 18 months. Every time I tried to ask any question I was asked a security question that was impossible to answer . How the heck do I know what the last withdrawal was for an elderly relative living over a 100 miles away was? How many times was I assured that the issue was sorted only to come up against this one again? Useless!

Dealing with a mis-sold endowment.
Two years! Forms, phone calls, more forms. Apparently the company that took the money wasn't responsible, the company that dealt with the administration wasn't responsible either, the company that took over one of those companies refused to discuss anything with me, refused to even talk to me except to inform me that i could make a claim to an ombudsman or talk to an independent advisor. Would any of them just talk to me? No.

Paying a car loan early.
A company with the same logo, but apparently nothing to do with the company that gave me the loan, offered me a loan to pay off the first loan early. I was told I could even borrow more for the same monthly payment. I checked the figures and it wasn't a saving, I would actually end up paying more! Cue a confused and apologetic girl on the phone. A month later they rang back. Apparently an attractive deal was now available, only it wasn't, it was still a worse deal than the one I already have. Would I like to borrow more? Er, no actually.

Asking questions about pensions - Should I transfer pension 1 into pension 2
We can't say but you can if you want to.
But aren't you the experts, you run a pension scheme?
Our hands are tied, the scheme works that way, talk to an independent advisor.

Asking questions about pensions - Should I transfer pension 1 into pension 2
You could last year but now you can't
Why not, it's my money?
Our hands are tied, don't ask us, you have to talk to an independent advisor.

Going back a bit there was the time a high street bank tried to charge me for a business loan on the basis that my plan to pay off an overdraft (all ten - yes ten - pounds) was to sell a bicycle.



To be fair my current bank is fine for day to day finance and has been for a long time.

I appreciate that not all of this is their fault and that they hate the regulation minefield just as much as I do (some of them said as much) but the overall effect isn't to increase faith in the industry.

There is also the worry of having to deal with this in my 70's, 80's or 90's. It's frustrating enough now!

Overall it isn't surprising that people are trying to find an alternative that they can control themselves even if it is mistaken.

[Ozzie Osmond]

sidicks said:

W124Bob said:

Actually 56 and I'll go but it's got more to do with that'll be 40years doing shifts which I reckon is enough for anyone and driving trains isn't fun anymore,god I've done days work which I would have done for nothing in the past!

If you leave this employment you don't have to take your pension straight away, you would be entitled to a deferred pension at a later date, and obviously the longer you wait the higher it will be.

Yes, seriously Bob, make sure you get a full understanding of the choices available to you before you make a decision. Talk to a competent financial adviser, even if you have to pay a fee to do so - it's likely to be money well spent.

In your job there's probably a union and they generally have people who are quite knowledgeable about pensions. Check it out. Might get the advice you need at no cost.

[groak]

jonny70 said:

@ Groak what do you suggest for long term savings towards retirement?

In the real world of the here and now we each have to deal with funding our old age as we as individuals consider best and as we are capable of doing.

The exception is the provision of the state pension and/or state benefits which substitute for that pension for those with no, or reduced, regulatory entitlement to that pension. That means (afaik) that all people of a certain age have a weekly minimum financial 'guarantee'. Obviously I'd have to make some lifestyle changes, but if I did - and I certainly could - I don't think I'd find it difficult to live out an old age retirement with that £140 a week. Clearly it wouldn't be luxurious or lavish. But it wouldn't be grim and miserable either. Given all that, there would be no need for any long term savings toward retirement. I'm 5 years away from getting my pension, and in only a matter of weeks I get the first stage of state retirement benefits - a bus pass! I've been looking forward to that for months now, and you can be sure that if, one day, my only means are the state pension, I'll be off somewhere every day sitting at the front of the top deck of a bus!!

However, it's also possible to have a different vision of retirement which requires a different strategy. Again, personally, at 60, I'm still so involved with 'work' (though what I do is hardly hard labour) that the idea of retirement still seems as far away as it always did. I think there are quite a few people who're the same. And another very large group who, whilst retired and in receipt of pension benefits, also do the odd bit here or there which adds a bit of income. Semi-retired you could call them. I think they're becoming more and more common. And, like my now deceased father-in-law, they don't do this and that or 'make themselves available' just because they're necessarily desperate for money. They're just as often motivated by the craic or the buzz of competence or just because it gives them something to do.


Possibly the ones with the biggest problem are the ones who want to be entirely divorced from the world of work, and also can't adapt to a lifestyle which proceeds satisfactorily on state pension benefits alone. So how are they to arrange sufficient unearned income to satisfy an aspirational lifestyle? The answer is that there are MANY MANY ways. Far too many to even begin to illustrate. A personal example are my portfolios. An agency runs them, and may well continue to run them long after I'm dead never mind retired. An agency I 60% own and am perfectly entitled to profit from without working in. There are limitless versions of the same thing.

The biggest disappointment for myself and many others is that there aren't really any universal satisfactory investment routes to creating retirement income. There are certainly individual routes. Some people are excellent at manipulating assets within SIPPs. Others have funds which companies generously contribute to. And yet others - albeit a small number - manage to somehow arrange truly colossal funds for themselves, eg Fred Goodwin and the ilk. But Joe Average can't do any of that. Joe Average has a dream. He dreams of consulting a pension adviser who arranges a savings plan into which Joe puts a monthly sum. He dreams this sum goes to some clever bloke in a financial institution whose expertise makes his contributions compound into much much more over a period of decades. He dreams this gradually compounding fund is expertly managed. Y'know. When property's showing signs of weakening, the expert whisks the money out of it and into gilts or cash or far eastern special interest uncommonly commodious pork belly unitary high volume technologies, or whatever the expert thinks, because HE and not Joe is...the expert. Joe sees his role as paying the contributions, and expects the expert to get a slice of the profit, and expects that over a period of decades his one gold coin is turned into 5 or 10 etc etc.

But that's just a dream. The reality is mostly one of disappointment. Let's not even begin to go into why. It just IS. These Joe Average private pensions are mostly shyte. Which is a great pity. Because everybody would have one or try to have one if they weren't.

Clueless salesmen, weak contracts, useless fund managers, chaotic companies, rotten results. All dressed up in glossy slick sales biased presentations and mass marketed using high commission to take market share.

So that's how I'd organise longterm savings for retirement. Via effective pension plans which required the policyholder to do nothing more than sign up to and keep paying the contributions. But as these don't exist, for those with 'aspirational retirements' in mind, it's back to the first sentence.

[fandango_c]

anonymous said:

[redacted]

You may not be able to fix your car, but you may know something about your car i.e it has 4 wheels, uses petrol not diesel, how often it requires servicing, how the engine works, what's wrong with it etc.

A large part of the problem is the general publics lack of understanding about pensions and some of the misleading/untrue stuff that is in the media and on this website.

Hence there's a need for the general public to have some understanding about pensions if that is the route that they desire to provide a retirement income, especially when you consider how much needs to be invested to get a reasonable income.

[sidicks]

anonymous said:

[redacted]

Visit the Finance subforum, it's been done to death on there!

[fandango_c]

anonymous said:

[redacted]

I'm no pensions expert, but I do have a some knowledge of insurance products, so sorry but I'm not going to be able to offer much enlightenment to you.

Providing a decent income in retirement requires a significant effort. Going down the savings route via an ISA or pension needs significant contributions, much more than most people appreciate. But some people do save and do reap the benefits on retirement.

No one, including the investment professionals that you mention, can predict the future and what investments will increase in value.