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Fairyland

Brexit’S Biggest Fans Face New 115 Billion-Pound Pension Hole

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Sorry I can't copy the graphs but here is a quote:

Turning 65 in the U.K. used to mean mandatory retirement and a future of endless holiday. But in 2016 it has come to signify a very different cut-off: membership in the single most pro-Brexit age group in the June 23 European Union referendum.

About 60 percent of Britons 65 and older voted to leave the worlds largest trading bloc in the recent vote, the most of any age group, according to two separate exit polls. The glaring irony is that senior citizens are also the most reliant on pensions, which face a worsening funding gap since the Brexit vote.

The combined deficits of all U.K. defined-benefit pension schemes, normally employer-sponsored and promising a specified monthly payment or benefit upon retirement, rose from 820 billion pounds ($1.1 trillion) to 900 billion pounds overnight following the referendum, according to pensions consultancy Hymans Robertson. Since then, it has grown further to a record 935 billion pounds as of July 1.

Project fear phase1 implementation? Edited by Fairyland

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...very misleading ...the gap has been there for years and the recent low interest rates have made the situation worse ......nothing to do with BREXIT.......cheap journalism...... :rolleyes:

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Another case of "some numbers change in a computer == real world problem." Talk about the tail wagging the dog.

Those numbers are as real as any other and what pays the company pensions.

If there is a projected shortfall this has to be made up in the here and now by increasing payments into the pension fund, leaving less money for investment and dividends.

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Those numbers are as real as any other and what pays the company pensions.

If there is a projected shortfall this has to be made up in the here and now by increasing payments into the pension fund, leaving less money for investment and dividends.

Well if the pension company held a balanced portfolio they would be significantly up since BREXIT, my favourite fund Fundsmith is up 24.9% YTD & 35% over 12 months, whats not to like?

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Can't believe anyone would say such a thing about Brexit. We all know we must see no brexit evil, speak no brexit evil and hear no brexit evil.

...very misleading ...the gap has been there for years and the recent low interest rates have made the situation worse ......nothing to do with BREXIT.......cheap journalism...... :rolleyes:

Another case of "some numbers change in a computer == real world problem." Talk about the tail wagging the dog.

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...very misleading ...the gap has been there for years and the recent low interest rates have made the situation worse ......nothing to do with BREXIT.......cheap journalism...... :rolleyes:

Ah Brexit - is there NOTHING that it's not responsible for?

I can see it being a scapegoat for every economic problem that emerges for the next decade at least.

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Ah Brexit - is there NOTHING that it's not responsible for?

I can see it being a scapegoat for every economic problem that emerges for the next decade at least.

Agreed. There may be some things it contributes to - positive and negative - but to blame the uk pension mess on it - is really quite embarrassing.

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Can't believe anyone would say such a thing about Brexit. We all know we must see no brexit evil, speak no brexit evil and hear no brexit evil.

Fine then, point out one genuine issue it's caused that doesn't involve fiddling around with numbers and isn't a result of panic disconnected from any realities on the ground.

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Fine then, point out one genuine issue it's caused that doesn't involve fiddling around with numbers and isn't a result of panic disconnected from any realities on the ground.

Well pension funds invest in a variety of vehicles including gov bonds and uk based industry. The value of uk industry has begun to fall and will continue to until we have stabilised our relationship with the EU. A number of companies are flagging up profit warnings which is not good for portfolio values of pension funds.

Pension funds also invest in property, but I don't think the plebiscite had any direct affect on property prices.

Bloomberg is quite respected, you can close your eyes to it if you wish. Zero hedge may come up with some other argument, but zero hedge is largely regarded as laughable.

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Agreed. There may be some things it contributes to - positive and negative - but to blame the uk pension mess on it - is really quite embarrassing.

It's the economic equivalent of starting to renovate an old house - as soon as you start to work on it, all sorts of bad stuff that was buried beneath the plasterboard and forgotten about starts to become apparent.

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Well pension funds invest in a variety of vehicles including gov bonds and uk based industry. The value of uk industry has begun to fall and will continue to until we have stabilised our relationship with the EU. A number of companies are flagging up profit warnings which is not good for portfolio values of pension funds.

Pension funds also invest in property, but I don't think the plebiscite had any direct affect on property prices.

Bloomberg is quite respected, you can close your eyes to it if you wish. Zero hedge may come up with some other argument, but zero hedge is largely regarded as laughable.

So in other words not one genuine issue that doesn't involve fiddling around with numbers and isn't a result of panic disconnected from any realities on the ground. "Brexit causes problems because people are stupid" pretty much sums it up.

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Bloomberg is quite respected, you can close your eyes to it if you wish. Zero hedge may come up with some other argument, but zero hedge is largely regarded as laughable.

The idea of Brexit happening was also regarded as laughable not so long ago, as was the idea that the subprime housing market in the US could bring down the global economy- the problem with the Bloomberg world view is that it mistakes vested interest for truth making it of limited value as guide to what is actually going on. Zero Hedge may have a prediliction for hyperbole but it at least presents a more diverse range of opinion than the monolithic Bloomberg party line.

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So in other words not one genuine issue that doesn't involve fiddling around with numbers and isn't a result of panic disconnected from any realities on the ground. "Brexit causes problems because people are stupid" pretty much sums it up.

Well you must make your own decision here, personally I think there is a very clear linkage. The U.K. Economy will reinvent itself but it will take many years if we leave the single market.

The idea of Brexit happening was also regarded as laughable not so long ago, as was the idea that the subprime housing market in the US could bring down the global economy- the problem with the Bloomberg world view is that it mistakes vested interest for truth making it of limited value as guide to what is actually going on. Zero Hedge may have a prediliction for hyperbole but it at least presents a more diverse range of opinion than the monolithic Bloomberg party line.

I can't disagree with you on this, I suppose it is purely who you choose to trust the most.

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When the government picks winners someone is going to loose.

They chose to underpin banks and socialise the risk.

This is just the cost of that, how do pension funds compete for yield with unlimited funny money?

Edited by Fromage Frais

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...very misleading ...the gap has been there for years and the recent low interest rates have made the situation worse ......nothing to do with BREXIT.......cheap journalism...... :rolleyes:

Yes the gap has been there for years and firms have been struggling to fill it for years. Now following the Leave vote its suddenly got £100bn bigger, not sure what part of that you find misleading or why its cheap journalism.

The real world impact is that UK firms will now have to agree pension fund recovery plans with the pension regulator - even assuming it will accept a 10 year recovery plan that's an extra £10bn a year out of company investment/profits/dividends for the next 10 years.

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this is only defined benefit pensions (for those who are not yet those priveliged pensioners (i.e. it will not affect those already with gold-plated pensions)

and furthermore - no-one knows how any particular cohort voted in the referendum (there was no box to tick to say I am over 65, under 25, gay or ethnic minority !)

It does annoy me that sloppy journalism keeps stating the stats about how many young/old people voted and how they voted as actual fact when it is merely based on a poll (of a few thousand people. )

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The idea of Brexit happening was also regarded as laughable not so long ago, as was the idea that the subprime housing market in the US could bring down the global economy- the problem with the Bloomberg world view is that it mistakes vested interest for truth making it of limited value as guide to what is actually going on. Zero Hedge may have a prediliction for hyperbole but it at least presents a more diverse range of opinion than the monolithic Bloomberg party line.

Yup - if you've an interest in finance, politics etc you should read every source you can get your hands on imho. The 800 pounds gorillas like bloomberg etc are extremely useful for getting the broad market consensus (which may or may not reflect reality) whilst the alternative sources - tin foil hatty though they may sometimes be - will offer at least a counterpoint or genuine bleeding edge stuff.

Then you make your own mind up about in whose interest a particular stance may be.

Edited by Frugal Git

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This is interesting. The reason the funds of existing pensioners will struggle is due to low returns on safe cash/bond investments, especially the last few years and worse since Brexit.

Meanwhile, equities, especially foreign equities which are in non Sterling X Currencies, have done well in Sterling terms. These tend to be held younger people who are still saving.

As mentioned, my total fund is up £65k since Brexit and someone else on here was up closer to £100k.

Perhaps the wealth transfer effect is starting to flow the other way. Once BTL crashes, we'll all be sorted.

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Fine then, point out one genuine issue it's caused that doesn't involve fiddling around with numbers and isn't a result of panic disconnected from any realities on the ground.

Rubbish, as others have said, genuinely well managed funds have a balanced portfolio, just checked mine and it is 8% up since Brexit. This is probably because the fund has significant foreign investments held in currencies other than sterling. Plus I am currently anticipating an annual draw on the scheme at retirement of 3.5-4% unlike the original poster who lives in fairyland.

Anything over my modest 3.5% at retirement will be viewed as a bonus.

P.S. My outlook is a big change from the days of final salary schemes where literally an extra 50p a week bought you 5 years early retirement, this figure was only a little over 30 years ago!

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There seems to be a lot of missing the point here.

Like most, my pension fund is substantially up in the last month when measured in £.

How much actual pension that'll buy me is down. Again. And that more-than wipes out the paper gain.

It's the price of pensions that shot up. Think of it as if your local average house price had risen by 25% overnight: your savings might be up, but the amount of house you could buy is another story.

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Well pension funds invest in a variety of vehicles including gov bonds and uk based industry. The value of uk industry has begun to fall and will continue to until we have stabilised our relationship with the EU. A number of companies are flagging up profit warnings which is not good for portfolio values of pension funds.

Pension funds also invest in property, but I don't think the plebiscite had any direct affect on property prices.

Bloomberg is quite respected, you can close your eyes to it if you wish. Zero hedge may come up with some other argument, but zero hedge is largely regarded as laughable.

And all this occurs in just one month post referendum? Nothing to do with years of malinvestment preceding it?

As one commentator recently pointed out, if global and national economies were more sound, the Brexit result would be quite a bit less relevant than it is.

I think you've had too many project fear sherbets.

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And all this occurs in just one month post referendum? Nothing to do with years of malinvestment preceding it?

As one commentator recently pointed out, if global and national economies were more sound, the Brexit result would be quite a bit less relevant than it is.

I think you've had too many project fear sherbets.

It occurred the day after the referendum (in fact beginning within seconds of the first results came through indicating the possibility of a Leave vote - with the instant fall in Sterling and start of the slide in bond yields).

The month delay is just the time it took to collect, process and publish the data.

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