Half of UK have no pension

A lot of young people starting out in the workplace are excluded from the final salary schemes that their parents received. Many of the large employers in industries such as mining, steel, ship building, postage, telecoms, etc have all gone or have fragmented into much smaller companies. These firms offer little or no pension contributions to their shop-floor employees. The likes of British Telecom, British Steel, British Leyland, etc are history.

If employers are not contributing to pensions schemes then the attraction is just not there, especially when you consider young people's main priorities are to buy a house and start a family. We can only do so much with our money and so difficult choices have to be made. We realise that this is short-sighted, and we know we should be putting money away for our old age, but what else can we do?

The news report really worried me... to have an income of around £10k a year, it said someone in their 20s would need to put away about £200 per month. I'm 22, I put in £75 a month, which is 5% of my income (I'm hoping my employers will one day decide to match this, but I'm not holding my breath on that one!).

I also save around 40-45% of my income - but this is mid rather than long term saving, as I'm sure I'll move out sooner or later (loving the cooked dinners too much at the moment) - though I'm confident I will always be a saver.

I don't think I could afford to pay in £200 a month, were I not to live at home still... And although I live on about £9k a year at the moment, £10k sounds incredibly low!!!

This BBC report keeping quiet about the public/sector private sector divide even though that's the huge elephant in the room in this story.

Their reticence is not surprising since the BBC (i.e. the taxpayer/license fee payer/us ) runs a defined benefit scheme for BBC employees which only requires them to pay in 4% (and the rules put the maximum contribution that can be asked for at 6%). That's likely to require the equivalent of a 16% contribution from the BBC [license fee payer].

It's like printing money for BBC employees. And, of course, it influences the BBC's understanding of and output on the subject. If public sector workers have to pay more for their generous pensions in future, then BBC employees should do so with knobs on.

Typical of the BBC's "we don't live in the real world" approach is the following:

"Taking [a cash lump sum on retirement] does not affect the pension payable to your qualifying spouse, qualifying civil partner or dependants. It will still be calculated on your full pension, as though you had not chosen to exchange part of it for cash."

The government is trying to mitigate the impact of a potential pension "time bomb", through the introduction of Personal Accounts, due to be rolled out in 2012.
Personal Accounts will be a state-sponsored pension arrangement, in which employees will be automatically enrolled, contributing 4% of their salary. The employer will pay 3% and a further 1% will come from tax relief.

Not enough to deal with the "pensions' time-bomb" but probably enough to deal with the government's own "retirement benefits time-bomb".

It should be fun :rolleyes: . It'll feel like a huge tax rise just as other tax rises and NI rises are having to be introduced in order to keep the IMF and the currency markets from our door.

Maybe if they'd brought it in in better times it might even have kept a partial lid on the housing boom. But they wanted to keep getting elected - for reasons we now know.

And the most likely unintended consequence is that other employees who currently help out will grade existing pensions down to the level "suggested" by the government as an alternative to a wage squeeze.

Further highlighting the public/private sector divide.