Like many people my age, I have lived in very fortunate times. I was able to take early retirement with immediate payment of an index-linked pension, as was my wife, and we are looking forward to a financially secure future as a result. We are probably amongst the last people who will be able to say this, all indications being that future occupational pensions will not be as generous nor as secure, many are already not.
Not only do we have the security of our occupational schemes, but we also look forward to collecting the State pension at 65 and 60 respectively. Sue is just the right age to scrape in before the pension age for women starts its inexorable climb towards that of men – and in the future, do any of us know what that will be?
Much of today’s pension crisis could have been avoided. There are four villains in the piece who have turned a working pension system into the current chaos.
1) The actuaries, who got their sums so badly wrong that they were advising employers that they could take payment ‘holiday’ long after it was safe to do so.
2) The fund managers, who failed to achieve the returns needed, but continued to receive fat bonuses nonetheless.
3) The employers, who were more concerned with easy profit and short-term gain than the long-term health of their pension schemes.
4) The Chancellor, for taking a large slice out of pension funds, without taking into account the effect it would have (for which, ultimately, the State may have to pick up the tab).
Perhaps there is a fifth villain – all Governments since 1948. Had the NI fund, which was meant to pay for pensions amongst other things, been ring fenced and invested, it would have produced sufficient cash to have allowed State pensions to be funded from investment at a significantly higher level. In the Isle of Man, that’s exactly what happened, and pensions are much more generous – the Christmas bonus, for example, is £60.
Now this isn’t actually a moan about pensions. What set me thinking was the culture of binge drinking which is now rife in society, coupled with the alleged widespread use of illegal drugs at raves etc.
I asked myself the question “Why do young people find the need to go out with the express intention of getting completely legless?”
The answer I came to was lack of security, and talking to some of my young friends, this seems to resonate with them.
At their age, I knew I had job security, I worked reasonable hours for reasonable money (though I would have preferred more, of course). I had a humane working environment, by which I mean that if I got ill, I was not dealt with under a disciplinary code, but as someone who had a problem, which my employer would try to help. I had clear job prospects, and if I couldn’t get on fast enough where I was, I knew I could move to another company to improve my prospects. Above all, I knew exactly how long I had to work for, and what kind of pension I could expect when I retired. I also knew that I could afford to buy a house – Ok, I might have to commute to get the price I could afford, and I might struggle for a few years with a lack of spare cash, but there was no question I could get on the housing ladder. Furthermore, I did not have to live up to some stereo-type image that the ad men foisted on me.
How many youngsters starting out today have the benefits that I, and others of my generation had? Precious few, if any, from what I can see. Most employers now expect a pound of flesh, pay increases are by no means guaranteed, society creates aspirations which most people will never achieve, job security is non-existent, and people don’t know how long they will be expected to work, or what sort of life they will have when they retire. Many youngsters are not bothering to enter pension schemes because they don’t think they are worth it – sadly, they may well be right.
If I were starting out today, maybe I, too, would want to blot it all out at the end of the week. It seems to me that, as a society, we need to find a way to give people hope and confidence in their future.
I think we had the best of times in the late 1950’s to the early 1970’s. Jobs and opportunities were in abundance and most people respected the law and others property.
I feel a little sad for the generations now and those to come they have far too many restrictions and problems facing them.
We definitely had hope and confidence in the future back then, something that is sorely missing for younger people today.
I have to agree with your sentiments, alas I fear at the age of 42 an uncertain future and this leaves me wondering if retirement in this country will be an option for me, sadly most will not care until its to late, and then there will be no safety net.
The main reason I’ve not joined the pension scheme is because i can’t afford to! Being only 21 my main and first priority is saving for a house (donations welcome!) knowing all the time getting onto the ladder is increasing in difficulty.