Sunday, October 30, 2011

All spent already, gone is misleading

UK business pensions deficit hits record of £295bn

"The truth is, companies, the Government, and the regulator need to understand that we have simply made promises we cannot honour. Someone has to lose out, either the company's shareholders, or the members, or maybe both. There's just not enough money in the system – and that is only getting worse. Not even if the pensionable age becomes 75." I am posting this to further the idea that pensions have already been spent principally to lower and hide the tax rate required to balance the books under New Labour.

Posted by stillthinking @ 01:38 PM (1187 views)
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3 thoughts on “All spent already, gone is misleading

  • stillthinking says:

    Also it should be understood that these schemes are audited and controlled by the government, itself with an unfunded scheme, and that those who arranged private pension provision (perhaps by buying something now to sell later…) are still free to retire when they like. So really some people got done.
    Also, I wonder if raising the retirement age is going to spectacularly backfire. The purpose is to lower borrowing requirements and costs, fair enough. But at the same time as these borrowing requirements and costs reduce, the side effect is that the number of people prepared to pay in reduces also, and this reduction in funding may perversely force costs up anyway. I base this on the fact that a large proportion of people seem to be planning to opt-out of the forced government pension schemes introduced next year.

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  • general congreve says:

    I’m in my thirties, the majority of my friends are what you would consider professionals, but despite this most are still living in rented accommodation, hardly having stepped up in property terms from their student days. Most don’t have pensions and those that do are unaware they are just being robbed to secure Alf and Ethel’s vote at the ballot box and will never see their money again, certainly not in real terms.

    The whole idea behind forced government pension schemes is not some noble endeavour to make sure everyone is cosy and secure in retirement, but a sly plan to direct more money into gilts, via obligations on many private pension companies to hold a percentage of their investments in gilts. They just want to rob more money from the people of this country so they can keep the debt ponzi rolling a bit longer, as a lack of people being able to afford pensions has already undermined the whole pyramid to the tune of £295Bn. At that level they’d need to be able to take around £1000 from every working person in the UK just to overcome the deficit. The amounts actually needed to generate the sort of surplus capable of paying out 20k an annum to your average punter in retirement for roughly 20 years (400k each) is completely unachievable. Can’t be much longer before the industry and the government has to reckon with the gaping financial hole below the water line.

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  • Anyone who buys into a pension is a mug, unless it’s one of the few gilt-edged final salary schemes that are still around, whereby they have a guarantee (though I’m not quite sure how strong that is).

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