Jump to content
House Price Crash Forum
Fingers

Pension Economics

Recommended Posts

Today the fickle media have decide that pensions are important... so I'll jump on their 24 hour bandwagon and ask:

A) If we are all to be compelled to pay a proportion of our salary - say 5% - to a pension, then won't we see

1) reduced disposable income =economic problems, less money to buy houses, prices fall

2) increased money pouring into stocks and investment property (would these cancel out?)

B) If we all save the same amount, then what's the point - when we retire there's still the wrong demographic to support the supposed 2:1 worker:pensioner ration. So you just get inflation as all the pensioner money is chasing the few remaining workers? If we get migrants in to work, then the ratio changes, they pay tax, and there's no problem. Why doesn't the govt just give everyone a £100,000 bond right now, adjusted according to your income, that you're not allowed to spend until retirement?

Fingers

Share this post


Link to post
Share on other sites

Today the fickle media have decide that pensions are important... so I'll jump on their 24 hour bandwagon and ask:

A) If we are all to be compelled to pay a proportion of our salary - say 5% - to a pension, then won't we see

1) reduced disposable income =economic problems, less money to buy houses, prices fall

2) increased money pouring into stocks and investment property (would these cancel out?)

B) If we all save the same amount, then what's the point - when we retire there's still the wrong demographic to support the supposed 2:1 worker:pensioner ration. So you just get inflation as all the pensioner money is chasing the few remaining workers? If we get migrants in to work, then the ratio changes, they pay tax, and there's no problem. Why doesn't the govt just give everyone a £100,000 bond right now, adjusted according to your income, that you're not allowed to spend until retirement?

An individual country can get round the demographic ratio by investing pension savings abroad, and then using them to pay for imported goods and services when they have a larger number of pensioners to support. But yes, in order to do that, you need to take real money out of the economy now -- you can't just make paper promises.

Share this post


Link to post
Share on other sites
Guest rigsby II

If we are all to be compelled to pay a proportion of our salary - say 5% - to a pension

The Government will nick the money.

They always do.

Its another con.

10 years, 20 years down the line they'll nick it.

I promise you.

:)

Share this post


Link to post
Share on other sites

Correct me if im wrong but pensions work because of population growth, its like a pyramid scheme the younger generationm paying for the older generation. The problem is because population growth is forcast to slow there will be less younger people to support the older generation.

The government keeps on saying that the pension problem is caused by people living longer, isnt this wrong, i believe somone told me the 20-30 generation are expected to not to live as long.

The suggestion that we all put 5% of our salaries into a pension doesnt work, because 5% of your salary doesnt give you enough money for a pension, you need money coming in from future generations to boost your pension.

We will assume everything is inflation adjusted and £1 = £1 when you retire...

say you earn 30k, 5% = £1500 invested per year

you work from 20 to 65 = 45 years, you will have invested £67k, lets say through very good investment (removing inflation) it is worth more say 80k.

Your going to live till you 80, so thats 15 years of retirement ... that gives you 5.3k per year to live on from money you have put in, in the past a rapidly expanding population would mean your pension would be worth ALOT more than this. In the future it wont be expanding rapidly, and is forcast to shrink by the time the 20->30s retire...

This means the government will need to ramp up the age we retire at, the age we die at will go down, and the amount of money we save will have to go up because we will be paying for our own retirement... The concept of a pension ceases to exist and it becomes a bank account your saving for in the future

Edited by moosetea

Share this post


Link to post
Share on other sites

The Government will nick the money.

They always do.

Its another con.

10 years, 20 years down the line they'll nick it.

I promise you.

:)

I totally agree

Sounds like another mandatory money pot (but not for us)

Share this post


Link to post
Share on other sites

Join the conversation

You can post now and register later. If you have an account, sign in now to post with your account.

Guest
Reply to this topic...

×   Pasted as rich text.   Paste as plain text instead

  Only 75 emoji are allowed.

×   Your link has been automatically embedded.   Display as a link instead

×   Your previous content has been restored.   Clear editor

×   You cannot paste images directly. Upload or insert images from URL.

Loading...

  • Recently Browsing   0 members

    No registered users viewing this page.

  • 301 Brexit, House prices and Summer 2020

    1. 1. Including the effects Brexit, where do you think average UK house prices will be relative to now in June 2020?


      • down 5% +
      • down 2.5%
      • Even
      • up 2.5%
      • up 5%



×
×
  • Create New...

Important Information

We have placed cookies on your device to help make this website better. You can adjust your cookie settings, otherwise we'll assume you're okay to continue.