Monday 15 November 2010


The Daily Mail seems to be surprised by the fact that research has reveal that one in three people in their 50s has saved nothing for their future. This means that millions of people will spend an old age of financial misery living on only a state pension. Frankly I find it less surprising. The Daily Mail, it seems, is out of touch with how ordinary people live.

The failure to put something away has been put down to a “spend rather than save” culture over the last few decades. But I would suggest that it could be put down to the fact that at the bottom of the income scale there is simply no money left at the end of the week/month for savings. There is always something to use the money on.

And it isn’t going to get any better. With many people taking pay freezes whilst inflation (real inflation, not the government’s invented figure) is soaring. Electricity, gas, petrol, food and clothes are all increasing in price at a rate far above the “official” inflation figures, and bus and rail fares are set to increase, along with a hike in VAT.

This will leave working people with even less disposable income.

It is all very well for the government to say that they need to increase the amount that people save for retirement, but with all the demands that there are for the meagre incomes that some people have, together with the fact that interest rates in banks mean that money deposited is actually reduced in value over the year, it is a tall order to ask people to save.

Company final salary pension schemes which used to take care of people’s needs in retirement have all but disappeared and, many have failed and people no longer trust them. It’s hard to believe that we once had the best pensions in the world...until Gordon Brown got his hands on them!

Private pensions, it seems to me, are hardly worth having. They depend entirely upon the value of the stock market at the time of retrial, and if you have no choice about when you are going to retire, you can end up with a terrible deal.

And, at the bottom end of the market, if you can only save a small amount, you are better off having nothing and taking advantage of the safety net which will take you from £5000 a year state pension, to £7,000 (still less than half what is regarded as the poverty rate in the UK). In other words, if you are likely to have private pension of around £40 a week, you would be better not to bother saving, because you will receive this amount in benefits.

The current government hopes to scrap this system by the end of the parliament, and replace it with a pension of around £140 a week for everyone, which will take away one of the disincentives for the poorest to save. However, this is an aspiration rather than a concrete policy, and I have doubts whether they will be able to do it.

They also want to force companies to enrol employees on to a pension scheme, although who will fund this is not clear at present.

One thing for sure, there are many people looking forward to the bleakest of futures on a miserable pittance.


  1. You're right, Tris. Pre-1997 Britain had a pensions fund that was the envy of Europe until Brown set about it (I think he did it at roughly the same time he sold off the gold).

    I believe (put your tin foil hat on!) that our housing system is tied into this as well. Unlike continental Europe, which is mainly into renting, the British have always aspired to home-ownership. Many people came to rely on the value of their homes when they retired so that in effect, property became an individual's private pension fund. Pensions have crashed, property prices have crashed - I don't think the two are unconnected.

    Under previous, pre-97, Labour govts a private pension was mostly wasted anyway due to rampant inflation which effectively wiped out the value. Unless you're uber-rich it looks as though state provision and subsidy beckons in old age.

  2. At least members of the EUSSR won't have to worry. Their gravy train has gone high speed and will allow them a comfortable old age. Unless it collapses - Greece, ireland.. Portugal, Italy, Spain ?
    Good programme on Channel 4 tonight at 8pm about the EUSSR corruption.

  3. Accurate opinion Tris about not bothering with a private pension. I did and Gordon Brown murdered it so I'm much worth off. Would have been better buying premium bonds.

    It's said everyone is better off nowadays than they were 50 years ago and I would agree with that, but 50 years ago people had a saving habit (although they were mainly women). They could usually squeeze a few pence at the least out of the budget for 'a rainy day'. Fair enough, it was always money eventually spent on family but it was a culture of those days.

    Ask even reasonably well paid people these days if they have a rainy day pot and they'll look at you blankly. No one saves for anything anymore. It has to be instant possession.

  4. Chin up David Cameron unveils new UK plc corporate song all together now. The UK is finished as a 'respectable' country when poverty is going to rise year on year encouraged by inept politicians.

  5. The destruction of pensions started long before Gordon Brown, Thatcher changed the laws to allow firms to take pension holidays based on projected surpluses. Entire funds were raided and /or starved. GB then scrapped the maximum pension rule for the already mega rich Executive and capped off the theft with a pension fund tax grab.

  6. Tris

    An older friend once said to me a long time ago when i said i would be happy to retire.

    the sooner you retire the sooner you are in poverty he was right then more so now.
    Personally i have always considered the sun lit uplands of retirement as a load of bollock's.
    I know a few who have a good(plenty of money when they can keep the children's thieving hands off it)Retirement

    Most have not got a pot to piss in and that is the future for the vast majority of us but then it was allway's gonna be that way.

    how the ordinary person can be expected to save around 30% of their wages for 45 years and have a life escapes me..........

    on top of that the stinking vermin Tory expect/demand we reproduce society and provide a
    captive work force which we pay for ourselves.

    Because the fact is the welfare state is really the poor funding the poor with the stinking filthy rich opting out of paying a fair share.

  7. Hello Vienna...

    Nice to see you on Munguin's Republic.

    The buying of houses is certainly one of the issues. As you say, most continentals rent their homes, and wouldn't dream of getting themselves into the kind of mortgage debt that we tend to have. The trouble with the idea of poorer people buying their houses (as Thatcher encouraged) is that they often can't afford to maintain them, and when major works need doing they MUST borrow more money, and of course their whole lives hang by the thread of interest rates.

    The other thing of course is the credit card. Everyone has them, 2,3,4,5 and store cards... and so many max them out... This is unheard of in Germany or France.

  8. We're all DOOMED Phil, DOOMED I tell ye.

  9. Yes SR. I guess before credit was allowed to be available to "ordinary" people, the only way to get things was to save up, which is why our grandparents and parents did just that. Mum tells me that my grandad, whom I never knew, always had some money at the back of his man purse for little treats and special things.

    Then they had a job for life too, and so, if thy were lucky enough to have a pension, it was relatively uncomplicated, and safe.

    I wonder (chicken and egg question) is the state pension the poorest in Europe becasue the company pensions were so good, or were company pensions good because you would freeze and starve to death on the state pension?

    Whatever the answer, both are crap now. Like everything else about the "United" kingdom.

  10. CH... Wasn't he on the fiddle with his taxes too?

  11. Anon:

    I might have known that daft old bat would have been in there somewhere. If there was anything nasty going on you could bet she'd be hanging about it like a bad smell...

  12. God Niko... you're a bit depressed tonight matey..

    Did Mrs Mixed Pickle find out you've been talking about her on here and cut you off with no tea?

    But you're right. I remember asking my brother who knows about these things, about 16 years ago, about private pensions. He said to get around £16,000 a year in pension, you need to have a pot of £100,000. How many ordinary people can pay off a student loan, a mortgage, bring up kids, pay all the bills and save £100,000...? That's at least £2000 a year, besides the saving you do for holidays, Christmas, etc...

    Now I read that because the stock market is in a mess £100,000 would only buy about £7,000 in pension... maybe less....

    What a con.

    We'll just have to get used to the idea that life after work is going to be as crap as life at work, and make the most of it.

    Oh dear I'm sounding as depressed as you.... boo hoo...

  13. I wonder if Niko can explain J murphy's £107,000 limo bill sounds rather Tory to me and tris Diddy men could diddle anyone until they got caught diddling.

  14. I doubt anyone, even Spud, can explain that much money on cars. I'll have a bash though. The money for the Scottish Office comes out of the Scottish Government's budget and Jim wanted to spend as much of it as he could so that the SNP wouldn't have so much to spend on things that matter...?

    Nah surely not...

    Aye... all good Tories, these Diddie men working in the jam buttie mines...

  15. Trsi

    And Tom Harris has quit Blogging.....

    oh i'm gonna bed and avoid that i'm a celebrity her is watching with her Boing! eyes


  16. Awww poor Niko...

    LOL Does Tommy want a job?

    I think he'll have to join the Tories.

    Night night matey....