Monday, February 13, 2012
Government to become annuity provider.
Pensions have been destroyed
Suggestion that the government enter the annuity market because of market place failure, which is reflected in the high fees and low annuity rates provided to private pensioners. So firstly the obvious answer would be to address the lack of competition and aside from that one of the reasons for poor returns (aside from undoubted excess fees) is the artificially low returns on the gilts that the pension funds are forced to buy! Also as we know these government schemes are always unfunded. So you could view this that the government is becoming so desperate for cash that they propose to receive in entirety the life savings of the private sector population, which they will have spent by the next day, and then fund these ongoing commitments from additional entrants... sheesh.
9 thoughts on “Government to become annuity provider.”
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paul says:
Lord Myners said that final salary schemes were a “single generation phenomenon†and lamented their decline.
A single generation? I wonder which generation that was … ?
mr g, any ideas?
Materialistic Weasle says:
Leaving your private pension in the trust of the goverment – hmmmmm…… tempting !
khards says:
Hey, why don’t we print up a couple of billion and give it away to those who think that they are entitled. They could have a self registration website up and running by the end of the month, they will all be rich.
icarus says:
khards – they’ve done that one. It was called ‘buying a house’ in the 70s, 80s……
nod2glod says:
nothing good comes from the government getting involved. expect the tax payer to have to pick up the ball for this one
mr g says:
@ Paul
We’ve had this discussion before. Not everyone in the boomer generation is the selfserving ar*ehole you and others make us out to be.
This problem was created by the financial sector and governments (both populated by people who are not boomers) acting in their own greedy self interests. Yes, many people of my generation jumped on the bandwagon as did younger people, but to continually blame a group of people shows a blinkered approach which would be met with a howl of disapproval if it was racially rather than age biased.
Don’t worry, you don’t get to me or wind me up, I work on the principle that if I dish it out I have to take whatever is thrown back at me.
Jaydee says:
Surely the bank of england/ government just magic,d up a few hundred billion pounds to buy gilts, thereby forcing the price up and the yields down ( which annuity rates are based on).do you think they did,nt know this is what would happen to annuity yields???
alan says:
Paul,
A wealth gap is opening up. I think its between the exploiters and the exploited.
In the recent sit-ins people were holding up placards saying “I am one of the 99 per cent”. Most people feel helpless against a morally bankrupt political regime in the H of C ~ comprising all parties. By the way, the MP’s index linked pension scheme and benefits are excellent.
paul says:
I think MPs have to be MPs for twelve years in order to retire on a full and generous £66k a year pension.
This feathered bed has meant that for decades MPs have felt happy to blithely ignore the pensions crisis. Only a concerted attack on their own pensions will force them out of their indifferent stupor.
Sorry mr g, I was just yanking your chain.