Threats to UK pension savers
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The requirement to offer four investment pathways starting in November may help some.Expecting millions of economically illiterate and functionally inumerate people to successfully manage a drawdown pot. When huge numbers of them go broke there will a) be calls for 'something to be done' by government; and b) a mad scramble to sue everyone in sight which could break the whole system.
My guess is that in most cases we'll end up telling people to say that they should refuse to use one of the investment pathways because I doubt that many will offer good drawdown choices in the drawdown pathway. Up to providers to pick so I expect them to be stuffed with poor own brand equity income and bond funds with a poor asset allocation.0 -
Actually the things that really worry me are:
- Expecting millions of economically illiterate and functionally inumerate people to successfully manage a drawdown pot.
- DB pensioners generally keep spending regardless and help dampen economic swings. Many DC pensioners will react to market downturns by cutting their spending. This could lead to a feedback loop and a downward spiral.
On the first point, I am not seeing a problem. Millions of retirees across the world seem to be managing just fine.
On the second point, all DB pension is doing during a downturn = shifting the pain to the company with DB liabilities. Hence companies cut spending or go bankrupt. That’s not great for the economy either.0 -
In the US I believe Social Security generally forms a much bigger part of retirement income than the UK state pension. I know that Australia were talking about reversing some pension freedoms because of the number of people blowing their Super.Deleted_User wrote: »On the first point, I am not seeing a problem. Millions of retirees across the world seem to be managing just fine.
On the second point, all DB pension is doing during a downturn = shifting the pain to the company with DB liabilities. Hence companies cut spending or go bankrupt. That’s not great for the economy either.
The sponsoring companies of DBs are, hopefully, taking a rather longer term view and would only really see a significant impact if the downturn coincided with an actuarial review - and even then would probably be looking at spreading the impact over a decade. Individual DC pensioners like Spreadsheetman and me are more likely to have short term reactions, especially if they are lucky enough to have a fair bit of fat in their budget.0 -
In the US I believe Social Security generally forms a much bigger part of retirement income than the UK state pension. I know that Australia were talking about reversing some pension freedoms because of the number of people blowing their Super.
The sponsoring companies of DBs are, hopefully, taking a rather longer term view and would only really see a significant impact if the downturn coincided with an actuarial review - and even then would probably be looking at spreading the impact over a decade. Individual DC pensioners like Spreadsheetman and me are more likely to have short term reactions, especially if they are lucky enough to have a fair bit of fat in their budget.
I am in Canada; Canada pension plan and benefits for over 65s provide a similar level of support to UK’s state pension. The vast majority of retirees have RRSP type pensions, which they can draw down any way they like (or buy an annuity) with a forced minimum withdrawal from 75. Canadian retirees are, on the whole, very well off.
And companies with DB pensions have suffered following 2008 as downturn pushed interest rates down, resulting in MUCH higher pension liabilities. Most DB pensions this side of the ocean are underfunded; another downturn will push companies and local authorities into trouble.
The main risk to pension management is that as individuals get older, they lose clarity of mind and make mistakes. That’s why I will buy annuity if and when I reach 75, using a portion of my funds. It’s also an insurance against outliving your money.0 -
Oh they definitely have while unaccepting remainers have !!!!!ed and moaned every day from day one.
Again, the silent majority are watching very patiently, but shocked at the same time as a number have showed themselves up and insulted our democracy.
Brightening an otherwise dull afternoon - thanks for the laugh.
Generally stupid politically?
Gone slowly psychopathic?
Gullible sucker puppet?
No offence intended.0 -
nicknameless wrote: »Brightening an otherwise dull afternoon - thanks for the laugh.
Generally stupid politically?
Gone slowly psychopathic?
Gullible sucker puppet?
No offence intended.
On the contrary no offence taken.
The tone you have written is typical remainer trait, abusive and classless.0 -
Events dear boy events.0
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Some Liberal Democrats are sensible (though a it appears a minority)
Paddy Ashdown said on the day of the referendum “I will forgive no one who does not accept the sovereign voice of the British people once it has spoken whether it’s by one percent or 20 percent."
then when he lost he back tracked and would not accept democracy like the rest of the remoaners.
https://www.youtube.com/watch?v=-Bv_1z2lFlw0 -
Resorting to personal insults is always offensive to the majority of forum readers and contributors. If the sum of your contribution is so infantile and irrelevant perhaps you could do the rest of us a favour and relocate to a media outlet that specialises in trolls.nicknameless wrote: »Brightening an otherwise dull afternoon - thanks for the laugh.
Generally stupid politically?
Gone slowly psychopathic?
Gullible sucker puppet?
No offence intended.0
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