Pensions Worth 30% Less Than Three Years Ago

geneer

http://uk.news.yahoo.com/pensions-worth-30-less-three-years-ago-045449474.html

:rotfl:Lets see the bulls try to gloat about this.

I do feel quite sorry for our older posters.

Private pensions are worth 30% less than they were three years ago, according to new research.
Price Waterhouse Cooper (PwC) says a combination of recent falls in stock markets around the world and interest rates at a record low leaves people nearing retirment age "between a rock and a hard place".
The accountants have calculated that a pension pot worth £300,000 in today's money would bring in an annual income of £18,500.
Three years ago, the same lump sum would have brought in nearly £22,500 a year.
Recent equity falls are bolstering the gilts market, driving up the cost of purchasing an annuity and pushing down pension incomes, according to PwC.
The firm says that given equity-heavy pension pots will in turn be worth less, pension incomes overall could be 30% less than they were three years ago.
Peter McDonald, partner in the pension practice at PwC, said: "Compared to only three years ago, a money purchase pension is now worth perhaps 30% less than it was.
"Many people retiring now will be caught between a rock and a hard place.
"If they defer buying an annuity until prices improve, they're stuck with no income in the meantime, which might not be an option.
"This huge reduction is due to a double-whammy of higher annuity costs and a smaller pension pot where investments hadn't switched out of equities before retirement.
"This could happen if someone finds themselves out of work unexpectedly - not an uncommon scenario in the current economic climate."
Mr McDonald went on: "The first generation of people on defined contribution pensions is starting to come through.
"Luckily many will this time have alternative pensions as they may have only been in a defined contribution scheme for perhaps a decade.
"The same won't be true for future generations.
"A number of employers and trustees are recognising this and taking serious steps to advance warn members approaching retirement of the risks they face and the options they have to protect and maximise their income.
"We expect Pension Regulator guidance due later this year to recognise this significant problem."

Dan:_4

Im glad i've got a public sector final salary pension

Old_Slaphead

Dan: wrote: »

Im glad i've got a public sector final salary pension

Good to see we're all in this together

Dan:_4

Old_Slaphead wrote: »

Good to see we're all in this together

shall I request to leave the scheme on Monday?

Old_Slaphead

Dan: wrote: »

shall I request to leave the scheme on Monday?

You would have earned the undying gratitude of all fellow taxpayers

lvader

Go figure, mine is worth more.

Pimperne1

geneer wrote: »

http://uk.news.yahoo.com/pensions-worth-30-less-three-years-ago-045449474.html

:rotfl:Lets see the bulls try to gloat about this.

I do feel quite sorry for our older posters.

Most of them are probably home owners anyhow so no sorrow necessary.

pimento

Dan: wrote: »

Im glad i've got a public sector final salary pension

Me too. I still feel sorry for those who don't, though.

dshart

Makes you think when you hear about all the public sector workers talking about going on strike about changes to their pensions.

kabayiri

Will we see more people buying B2L property as an alternative pension arrangement ?

I can't see why not.

pimento

dshart wrote: »

Makes you think when you hear about all the public sector workers talking about going on strike about changes to their pensions.

If I do strike, it won't affect you or your taxes because I don't work for the British public sector.