medusa Posted November 19, 2013 Share Posted November 19, 2013 I'm not saving enough in my pension. I know I'm not, but I'm not likely to survive long enough to live to a ripe old age so it won't have to fund my lifestyle for very long. I also don't have any children so I regard my house as a rainy day fund if I ever need the odd hundred grand to pay for anything. When the house is paid off in a few years I will then have just a little more money to pay into my pension and make life a little bit less stressful. Link to comment Share on other sites More sharing options...
I1L2T3 Posted November 19, 2013 Share Posted November 19, 2013 Part of the problem with pension funds is the complete mismanagement of them. There is a whole industry out there living off the back of your savings for the future. Quite often the managers of these funds make appallingly bad investment decisions (e.g. dot com bubble) but still get to cream off perhaps 7% per year in fees in some cases. They gamble with your money and pay themselves handsomely even if they screw up. I hate that people have turned to property instead of saving for pensions in he traditional way because of the issues that causes with speculative activity in the housing market. But given the poor performance of and loss of trust in pension funds and loss I do understand why people turn to property. It's just one of many things that are wrong and broken with our financial system. Link to comment Share on other sites More sharing options...
SpikeMac Posted November 19, 2013 Share Posted November 19, 2013 Part of the problem with pension funds is the complete mismanagement of them. There is a whole industry out there living off the back of your savings for the future. Quite often the managers of these funds make appallingly bad investment decisions (e.g. dot com bubble) but still get to cream off perhaps 7% per year in fees in some cases. They gamble with your money and pay themselves handsomely even if they screw up. . But they have to invest in safe stuff so that they can pay the bills. There are loads of great investment opportunities out there, most of them are off limits to the pension fund managers, because of the risk. They have to pay safe so that they can definitely pay today's pensioners. That affects the return on the pensions of current contributors. Link to comment Share on other sites More sharing options...
I1L2T3 Posted November 19, 2013 Share Posted November 19, 2013 But they have to invest in safe stuff so that they can pay the bills. There are loads of great investment opportunities out there, most of them are off limits to the pension fund managers, because of the risk. They have to pay safe so that they can definitely pay today's pensioners. That affects the return on the pensions of current contributors. They have invested in some pretty risky stuff trust me. A lot of current problems stem from the dot com bust in the early 00s which blew a massive hole in pension funds. But yes you are right there has to be a significant element of safety in how they invest. Government debt (gilts, bonds) and stuff like that. Ooops Link to comment Share on other sites More sharing options...
SpikeMac Posted November 19, 2013 Share Posted November 19, 2013 They have invested in some pretty risky stuff trust me. A lot of current problems stem from the dot com bust in the early 00s which blew a massive hole in pension funds. But yes you are right there has to be a significant element of safety in how they invest. Government debt (gilts, bonds) and stuff like that. Ooops And that restricts fund growth. Which delays retirement. Which builds resentment for those in schemes that are structured differently. Which pits private pension contributor against public pension contributor. Which suits the politicians (who make the rules). Not that I'm suggesting that any of the above facts are linked... oh... hang on. Link to comment Share on other sites More sharing options...
I1L2T3 Posted November 20, 2013 Share Posted November 20, 2013 And that restricts fund growth. Which delays retirement. Which builds resentment for those in schemes that are structured differently. Which pits private pension contributor against public pension contributor. Which suits the politicians (who make the rules). Not that I'm suggesting that any of the above facts are linked... oh... hang on. Indeed. One thing that has really annoyed me in the last few years is the way private pension holders have (politically) been given the public sector worker with the gold plated pension as their bogey man. How many people were taking their own private pension fund managers to task? Labour couldn't speak up for these people because of the New Labour changes to pensions that made it very easy for pension funds and Tories to return fire. A narrative was allowed to build which got people looking the other way at public pensions while the woefully managed and punatively expensive private pension funds just carried on wrecking retirements at will. Link to comment Share on other sites More sharing options...
Anna B Posted November 20, 2013 Author Share Posted November 20, 2013 But they have to invest in safe stuff so that they can pay the bills. There are loads of great investment opportunities out there, most of them are off limits to the pension fund managers, because of the risk. They have to pay safe so that they can definitely pay today's pensioners. That affects the return on the pensions of current contributors. 20 years ago a pension pot of £100,000 would buy an annual annuity of between 12,000 and 15,000 a year. Now £100,000 will buy an annuity of about £5,000 which is a massive drop. If the funds are so safe and the managers are so good, what happened? Link to comment Share on other sites More sharing options...
tinfoilhat Posted November 20, 2013 Share Posted November 20, 2013 20 years ago a pension pot of £100,000 would buy an annual annuity of between 12,000 and 15,000 a year. Now £100,000 will buy an annuity of about £5,000 which is a massive drop. If the funds are so safe and the managers are so good, what happened? People living longer? Link to comment Share on other sites More sharing options...
I1L2T3 Posted November 20, 2013 Share Posted November 20, 2013 People living longer? That is part of the picture for sure. Link to comment Share on other sites More sharing options...
Anna B Posted November 20, 2013 Author Share Posted November 20, 2013 People living longer? The life expectancy index has only gone up by 4 years (men) and 3 years (women) Link to comment Share on other sites More sharing options...
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