Death of a pension plan

 

Private pensions will not exist by 2050 as young people have no interest in saving money that they can not touch for decades

 

This pretty well summed up my thoughts on it:

Most young people don’t have the means to pay for a pension. Most companies no longer offer them and a combination of student loans and excessively high rental prices (forget about ever buying your own home in most of the country) mean they simply don’t have the money anyway.

A generation indebted from their first day at work, unable to get onto the property ladder and with no savings or investments for the future will become the norm, and it will be interesting to see what kind of political change such a generation will bring about.

And:

If I was a young person starting out I would opt for a job in the public sector. Their pensions are bullet proof, index linked for life and funded mostly by the tax payer. What’s not to love?

And let’s face it, Brown’s raiding of the pension pot does make one feel a bit jittery about going into such a scheme.  Remember:

Gordon Brown’s notorious “pension stealth tax” has reduced the value of retirement funds by at least £100 billion, independent research has disclosed.   This is more than twice as much as the combined pension deficits of the country’s 350 biggest companies.

Not a good time to be young just now.   Come to think of it, not a good time to be old either or in hospital or in a care home or to be middle-class or to be in the UK.

11 Responses to “Death of a pension plan”

  1. JD December 28, 2012 at 11:58 Permalink

    Not a good time to be young just now. Come to think of it, not a good time to be old either or in hospital or in a care home or to be middle-class or to be in the UK.

    you are beginning to sound like Neil Kinnock! :)

    http://www.owen.org/blog/326

  2. Andrew Duffin December 28, 2012 at 12:56 Permalink

    It’s not just that they don’t have the money – it’s that they have seen their predecessors get shafted over and over again by the State either changing the rules when it’s too late for them to do anything about it, or by simply confiscating the accumulated assets via QE or ZIRP (or just tax).

    Who in their right mind would ever go in for a long-term savings plan with these examples all around?

  3. dearieme December 28, 2012 at 13:18 Permalink

    The root of the problem is that the welfare state is a pyramid scene, terribly vulnerable to several years in a row of bad government. It’s amusing that it was a Labour government, but that’s just God’s sense of humour for you.

  4. Jeremy Poynton December 28, 2012 at 17:17 Permalink

    None of the young persons I know earn enough to save any money anyway. End of.

  5. James Higham December 28, 2012 at 19:16 Permalink

    Yes, does seem a dead issue now.

  6. Wolfie December 28, 2012 at 19:30 Permalink

    This article fails to mention that quite a lot of young people have woken up to the facts. Returns on private pensions schemes have plummeted combined with apauling levels of fees levied on the premiums have left them very poor investment vehicles.

  7. Ian Hills December 28, 2012 at 20:32 Permalink

    The young would do better to hoard gold.

  8. James Higham December 28, 2012 at 20:57 Permalink

    If they could get their hands on some.

  9. Sackerson December 29, 2012 at 08:43 Permalink

    @Wolfie: the fees will come down, esp. with competition from (and transfers to) the likes of NOW:Pensions. But watch for changes in pension taxation, esp. what used to be called the Tax Free Lump Sum and is now ominously called the Pension Commencement Lump Sum. And the NEST scheme, with its compulsory enrolment and compulsory employer’s contributions, is basically a second tranche of National Insurance.

    Increasingly, I feel one should have one’s wealth in easily-accessible, portable form.

    Keep your passport valid, live within 30 minutes of an international airport.

  10. James Higham December 29, 2012 at 10:27 Permalink

    Trouble is, Sackers, where to fly to?

  11. Sackerson December 29, 2012 at 10:34 Permalink

    Iceland? Seems the people still run their own country there. And I like cod.

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