An awakening is taking place! The public are becoming more aware of pensions, and more accurately, of the pension crisis.
We are starting to see that the traditional pension system, a cornerstone of the 20th century belief model (go to school, get a job for life, pay your mortgage off, retire on a comfortable pension) is DEAD.
No longer can we rely on the traditional pension system to secure our financial futures. Traditional pensions have failed millions and will fail many more as the stark reality begins to hit home that we are relying on an out of date system for our financial futures.
The main stream media is reporting regularly on the state of our pension system. BBC documentary maker Panorama caused a storm recently when they revealed that pension-selling companies are taking out the equivalent of 80% of the money paid into some pension plans in fees and commissions.
Although part of the problem is that we are all living longer so pensions are becoming less valuable, the pension companies themselves have to shoulder some of the blame. Through excessive fees and in some cases broken promises, greedy pension companies have let millions of people down.
It’s easy to see why traditional pensions have failed when so many are based on the lottery that is the stock market. The FTSE was worth more in the year 2000 than it is today, that’s a frightening thought when the financial futures of too many of us are at stake – you would have been better leaving your money under your mattress.
You may think I am being radical in my viewpoint but many other pension experts are voicing their concerns about the state of the pension system.
Dr. Ros Altmann a widely respected pension’s expert and economist stated in a recent interview on the Motley Fool website:
“People have been cheated! They have not been told the truth. The truth is that pensions are much, much more expensive to provide than anyone has been led to believe”
The language used here is far from moderate, but there is a real and growing concern about the pension crisis we now find ourselves in.
Unfortunately I believe the so-called ‘radical’ pension reforms proposed by the Government are more of a hindrance than a help.
So what’s the solution? More expensive government reforms, we all work until we drop, except poverty?
I have just shown you the tip of the ice berg I could write a book to explain why the pension system has gotten so bad. Inflation for example will be a huge hindrance to pension returns.
It doesn’t have to be this way, I believe in an asset class that has proven itself over time – property investment.
In my next blog I will talk about property being the new pension, but until then what do you think? Have you given up on traditional pensions or are you one of the 56% that has no provision at all? Maybe you still do believe in the pension system?
Let’s discuss, all comments are welcome or why not sign up to our newsletter for FREE education emails.
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