Bag's Rants

Pensions. I'll worry about that later.

A new report on the pension row seems to indicate that there is no pensions issue. Read here.

Now since I read this article on Spiked which confirmed, in a much more supportable way, part of my view on pensions in the UK.

My view is that there is a pension issue but it is only in the Government funded one SERPS. Private pensions will be OK generally. However, the Governments view on pensions is that if you don't bother saving for the future the Government will pay it for you and if you save they will screw you so much you will be little better off than if you had not bothered. Remember that by default we all pay into a pension scheme via NI.

This leads to the situation where some people continue doing what they do today. Pension sorted via SERPS. Spend everything now and don't worry about the future. Have a good time while you can. Others, who can think, say 'Why bother saving extra?' They can save at the detriment of the present only to be shafted later and be no better off than if they had not saved. Finally, there is the really rich, who it does not impact. If you are in this bracket you are OK. Just make sure your investments are not pensions and you will be fine.

The general public therefore seem to being pushed into a corner, save and miss out on today, it won't make much difference in the future or don't save and we will look after you. This of course puts more strain on the Government scheme and now it is starting to hurt. It's hurting now because of all the other inefficiencies in the Government so it's been raised as a future problem. The other thing is that because actions in this area take decades to come to fruition they need to be carefully considered but that does not seem to be a criteria for Government.

The only real concerns for private schemes are corrupt or inefficient administrators or Government and a stagnant economy. Economies change dynamically and are generally OK but it needs to be considered they are also influenced by Government.

Now our lowest common denominator Government is starting to look at reducing the cost of the reforms in social services and this will include pensions. Unfortunately, they are a great believer in means testing and more Government so they will likely bring more private pension users actual incomes down. Hopefully, it will likely be sorted, one way or the other, by the time I come to retire. It's years away, I'll worry about it later.

posted by Bag @ 10:13 am