Millions See Pensions Disappear

Millions who put their trust in financial institutions and the government have been betrayed. After a lifetime of working and saving, they find themselves been forced into a retirement of poverty. if you are lucky enough you may have a job where you can continue to work after sixty-five. Unfortunately most people will not be given the option.

The disaster hasn’t ended yet either. Annuity rates are continuing their downward slide.

According to the prudential 2.2million people are planning to postone their retirement because their pensions are not up to the job. If they are unable to continue to work then they will have to get used to a retirement of poverty. Had they not worked and saved all their lives you could argue that it serves them right. These people however do not belong to the idle masses. They have worked and saved all their lives, paid their taxes and now find themselves stranded through no fault of their own. This is turning into a national scandel.

people have been hit by a double whammy. The plunging share market has devastated pension funds and personal shares and the collapse of the housing market has dashed all hopes people had of using their property to finance their retirement.

A member of William Burrows Annuities said that people’s retirement plans have been shattered by the financial crisis. “In a short space of time we have moved from a world where many people benefitted from the best economic and financial circumstances in living memory, to a world where many are facing hardship as a result of falling house and share prices.”

As a result, many are delaying retirement plans. But he points out that there are steps that those in this position can take, to improve their pension position (see below for further information).

Just as important, he said, is the plight of many younger baby boomers who are between five and 10 years away from their planned retirement.

Many in this age-group are simply delaying making financial decisions, he said, until the economic situation improves.

“It is human nature to shy away from making decisions about things that appear complex,’’ Mr Burrows said. ‘‘However, many have lost out because they didn’t realise they had choices when it came to pension planning. By doing nothing now they are falling into the same trap, and could be making their situation worse.”

Michael Rudge, the managing director of Hartford Life, the annuity provider, said: “People’s attitudes unfortunately remain firmly fixed in the pre-credit crisis era, whether it is an over-reliance on property, a lack of understanding about pensions, or leaving retirement planning until the last minute. Many people have not adapted to the economic realities of 2009.”

In a report from Hartford Life due to be published next week – After the Crunch: Saving for Retirement – Mr Burrows describes such consumers as “crunch deniers”, although he also points out that there are growing numbers of those who are “crunch drunk” – in other words they realise the recession has had an impact on their retirement plans, but are confused about what to do next.

He said: “These baby boomers need to become ‘crunch conscious’ and take decisive action now in a bid to ensure the best outcome for retirement(telegraph)

He’s right we need to take decisive action. That action though should not include relying on the financial institutions who have proved themselves to be corrupt and incompetent. Nor can we rely on a bankrupt government which has helped to devastae the private pensions industry. The decisive action we need to take is to build our own wealth. trust in ourselves to manage our own investment and the biggest investment we should make is in oursleves.