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MSE News: Pension system 'needs urgent reform'

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MSE News: Pension system 'needs urgent reform'

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This is the discussion thread for the following MSE News Story:

"A commission uncovered 'widespread concern' about the charges, risks and complexity of the pensions of 23m workers ..."
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Replies

  • Released while the government is in recess, so we will have moved on by the time they get back and this will be ignored again.

    There are no easy answers.

    If you are on minimum wage you simply haven't got enough to save for a pension. To make it worse, the demographic changes mean we will have an ever increasing proportion of the population in retirement, so the current system of the people working today funding the pensions of those who worked yesterday cannot continue. (The 'I've paid my NI all my life' argument always was, and remains, irrelevant.)

    In my opinion the government should be looking at understanding how it can fund *everyone's* pension to a reasonable degree, not just those in local government, etc. If we all get a 'reasonable' state pension (whatever that means) and additions are not means tested, then there is more incentive to save.

    Plus, of course, the 'whey hey, free money' attitude of the pension industry needs to change. Like estate agents, they charge a percentage. If this was limited to a maximum value (say £2k) then they would still get paid, but it would benefit everyone else. Of course you couldn't as easily pay fund managers the £ms that they can get now -- but with appropriate bonuses (such as your fund must grow x% above inflation) that may be justified out of the smaller amount of slush fund there would be to go round.

    I imagine the politicians are heavily lobbied by the pension and FSS, as it is one of our most important sectors -- lol. What hope our future?
  • gadgetmindgadgetmind Forumite
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    I've seen some interesting comments to news articles elsewhere regards this issue and lots of people really are a bit clueless. Most still think you need to buy an annuity, or that you can't access a personal pension until state pension age, and that fees are around 5% pa so you get back less than you put in. I've seen all sorts of nonsense!
    I am not a financial adviser and neither do I play one on television. I might occasionally give bad advice but at least it's free.

    Like all religions, the Faith of the Invisible Pink Unicorns is based upon both logic and faith. We have faith that they are pink; we logically know that they are invisible because we can't see them.
  • edited 1 August 2011 at 3:52PM
    kidmugsykidmugsy Forumite
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    edited 1 August 2011 at 3:52PM
    Euthanasia will be legalised.
    Free the dunston one next time too.
  • edited 1 August 2011 at 4:10PM
    dunstonhdunstonh Forumite
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    edited 1 August 2011 at 4:10PM
    gadgetmind wrote: »
    I've seen some interesting comments to news articles elsewhere regards this issue and lots of people really are a bit clueless. Most still think you need to buy an annuity, or that you can't access a personal pension until state pension age, and that fees are around 5% pa so you get back less than you put in. I've seen all sorts of nonsense!

    Pensions dont have to be complicated. The misinformation and incorrect opinions are what make them complicated.

    Tom Mcphail has come out with a good response (which for once isnt pro HL).

    http://www.moneymarketing.co.uk/1035503.article?cmpid=MME01&cmptype=newsletter&email=true
    I am an Independent Financial Adviser (IFA). The comments I make are just my opinion and are for discussion purposes only. They are not financial advice and you should not treat them as such. If you feel an area discussed may be relevant to you, then please seek advice from an Independent Financial Adviser local to you.
  • edited 1 August 2011 at 6:30PM
    DeepfatfriarDeepfatfriar Forumite
    97 posts
    edited 1 August 2011 at 6:30PM
    The publication of this by McFall of all people quite frankly defies credibility and I am surprised MSE gave him airtime.

    As a New Labour clone he was one of the ones who voted through Gordon's Brown raid on the pension funds to the tune of £6 Billion per annum. The result is that well over £100 Billion was taken out of pension funds and not used to either finance investment in industry or pay people. This incredibily stupid and spiteful move laid the foundations for killing pensions and contributed majorly to the chaos we have now.
  • But what policy position should the UK hold?

    A It is everybody's responsibility to look after their old age. We will give you a pittance of a pension and you can top it up yourself.

    B We are a civilised society and take looking after those past working age seriously. We must help you as much as we can -- it's our duty.

    So which is it to be? The litmus test for me is what to do for someone who has always been a low earner throughout their life -- someone who has always worked but has often only been on the minimum wage, or just above it. They can't afford to put anything away for the future; the cost of living is horrendous for them now. So is it right, that we tell them to get stuffed? You've always been poor and we will keep you poor until the day you die? Is that the attitude to have?

    Or is it correct that the responsibility of society, via government, is to ensure that some of the wealth this county has is shared much more equitably across society?

    Arguing that we can't afford to keep everyone in a decent pension leads to option A. That's the easy way out and basically says 'I'm alright, Jack.' But that single mother who has struggled to bring up her kids -- should she be in this position? After all kids are our future. So when should option B apply? Dead easy for me as I'm going to be fine for my old age -- I have a large enough pension. But then I'm not a single mum.

    I'd go for option B every time, but I bet there are many who would say A. And that frightens me.
  • Hilarious. You strike a deal with public sector workers that they will have hardly any perks (no luncheon vouchers, company cars, health insurance, BUPA, works gym, etc, etc, etc) but they will get a decent pension. They do their bit. You then abuse them for their 'fat pensions' and do your utmost to get other workers, on scabby pensions, to attack them, crying not 'I want a decent pension too!' but 'Take their pensions away!'
    Then you stand by piously wringing your hands because people seem to have lost faith in the idea of making sacrifices to build up a decent pension.
    :wall:
    'Whatever you dream you can do, begin it. Boldness has genius, power and magic in it. Begin now.' Goethe



  • SystemSystem
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    To make it worse, the demographic changes mean we will have an ever increasing proportion of the population in retirement,


    That's a self-inflicted burden arising entirely from a persistent refusal to recognise that life expectancy has been increasing.

    If the retirement age were being continuously adjusted to reflect life expectancy, then the proportion of pensioners to workers could be maintained at a constant and hence affordable level. It's an artificial non-existent problem.


    (Life expectancy 70, retirement age 65, therefore retired/working life ratio = 5/40 = 0.125.
    Life expectancy 85, therefore retirement age necessary to maintain 0.125 ratio = 73)
  • DeepfatfriarDeepfatfriar Forumite
    97 posts
    It shows how deatched McFall and crew are from reality. To claim fund management charges are too high when his government and this one imposed disatrous levels of taxation is a joke.

    Why save if the government is going to attack your pot anyway.
  • fairleadsfairleads Forumite
    595 posts
    gadgetmind wrote: »
    I've seen some interesting comments to news articles elsewhere regards this issue and lots of people really are a bit clueless. Most still think you need to buy an annuity, or that you can't access a personal pension until state pension age, and that fees are around 5% pa so you get back less than you put in. I've seen all sorts of nonsense!

    I've seen nonsense on a fund managers web that states advisers can claim up to 8%.
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