PENSION CRISIS SHOULD COME AS NO SURPRISE

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.

SARKOZY IS REMINDED THAT FRENCH PRESIDENTS GOVERN "FOR" THE PEOPLE

After almost a week of demonstrations Nicolas Sarkozy has been forced to appeal for calm after cars were burned and shop windows smashed today.

Additionally the oil refinery strike is biting now all over the country. Around 4,000 petrol stations are running out, or are out of petrol, with long queues building up.

It is expected soon that fuel supplies for freight vehicles will run out and at that point distribution of food and supplies to factories and shops will start to dry up.

Sarkozy, who was at an international summit in Deauville, has set up an emergency committee to deal with the crisis, He said that he cannot allow shortages; that the majority of people want to work and must not be prevented from doing so by a lack of petrol.

He has said that he will not pull back from his pension reforms, which include raising the basic age of retirement from 60 to 62.

At the end of this week his Bill will face its vote in the Senate and this will mean it is a step closer becoming law. This Senate vote has already been postponed from last week.

However, Nicolas should be aware that no matter what he does, the French do not like it when someone attacks their way of life. They take a different attitude to life in most of France. It is about living; not about working. Work is necessary to allow one to live, but it is not life. Life is food and art and wine and politics and philosophy and fun and l'amour.... and some work.

The strikers will not let the mere fact that the Senate has approved the Bill get in the way of their intention to reverse it. They consider the reform to be unfair and they intend to stop it, as they have done with other laws in the past that they felt were contrary to the French way of life.

The manifestations include people from all walks of life, and strangely to Celtic minds, include school children. Around 380 schools were disrupted on Tuesday. (Kids learn early to protect their cherished way of life.)

Students too are protesting on the basis that keeping people at work for another two years will mean that there will be a shortage of jobs for them, as the normal process of retirement and promotion is interrupted.

There have been calls for a General Strike too, and it could happen, as people are more and more discontent with the right wing president and the way public services have diminished on his watch.

Of course many will say that les réformes des retraites is long overdue. There is a large pensions shortfall as there is in most countries. But I have a feeling that Sarkozy will end up ruing the day he tackled le public français on such a thorny subject. He may get his Bill through, but will he make it work? And he only has 18 months before the next presidential election!!