Monday, October 11, 2004


So, stories about how people are putting too little aside for old age are in the news again. Can't say I'm surprised. This morning's Breakfast had a feature on a builder in his mid-thirties who quite readily admits that he knows he should do something about a pension but never gets around to actually doing anything about it. He said he would be interested to talk to a financial adviser and see if what he was told could motivate him to start investing for his future.

Bloody fool. With an attitude like that he probably deserves to live on the poverty line when he retires. The problem is that his attitude is an all too common one. Complacency is rife amongst people in their twenties and thirties when it comes to ensuring adequate pension provision. They see pensions as unimportant, too complicated & something that can wait until tomorrow. All of a sudden, half their working lives have passed and it's too late to do anything about it.

I know the feeling very well. Having left university aged 22, it was almost three years before I started paying into a pension. I could have set one up before then but I couldn't be bothered with the hassle. And I knew far more than most about how pensions work having been employed by one of the countries biggest pension providers at various times during summer breaks and the like. Then I started the job I've now got and joined the Group Personal Pension Scheme that the company runs as soon as I could. I've been putting the maximum 17.5% of my salary into the scheme ever since (most of it contributed by my employer). My pension pot is growing very rapidly indeed.

It's difficult to see what can be done to change this situation. Stakeholder pensions were brought in as a kind of 'easy option', particularly for people who don't have access to company operated schemes but I don't think they have been that successful in encouraging people to really start planning for their future. Pensions are, by their very nature, complicated products and simplification would not be easy. Media scare stories also don't seem to do the trick. Workers are just too short-sighted to care.

Can it really be that the only way for the government to ensure that we make plans for retirement income is to put legislation in place to force us to do it? At times, I think that maybe that is indeed the only answer.

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