Savings & Pensions UK
12 Oct 2004
Updated Jan 2007 to include link to ITV's Where's My Pension Gone?
Compounding the forthcoming climatic miseries arising in the natural world,
another storm of human origin is raging fast over the horizon. The new decree
from our political peers is "Save more and work harder, longer", lest we face poverty
and despair in our old age as a massive pensions shortfall looms.
Several decades ago many of us were persuaded to take out an endowment mortgage, anticipating a downstream bonus when the insurer paid off the mortgage with money to spare for us. Many also took out a private pension, perhaps also investing heavily in a scheme run by our employers, secure in the knowledge that the state would complement our efforts when the time came to down tools for the last time. Comfort, security and financial independence were assured into a healthy old age.
Along came Robert Maxwell and Equitable Life, split capital investments, precipice bonds and Lloyds, as just a few examples of where reality can fall some way short of expectations. Hedge funds are another issue, for another time, but watch this space.
In the main we didn't mind or even care about the massive salaries, performance and productivity bonuses that company directors and entrepreneurs award themselves. The benefits and trappings of wealth are for some an incentive to be diligent and inventive, and a shareholding, stakeholding society enabled everyone to take part in the jamboree at a level that suited them and their expectations of living in the UK. Now, barely in to a new century, we are counting the cost of having placed our faith in the system. Perhaps now, as the Enron and Parmalat floats pass by in the parade, we start to hear a small but strident voice proclaiming that the emperor has no clothes.
Sharp practices and downright fraud now threaten to turn all our hopes and dreams into a nightmare that even waking won't dispel.
Where, some might ask, did all the money go? Much of it certainly kept sloshing around the system somewhere, like oil in a crudely engineered and leaky sump. The rest most likely ended up as numbers in cyberspace, manipulated in offshore banks that guard the proceeds of astute "tax planning" and such unencumbered, privileged investment schemes. As the small voice becomes yet more strident, however, attention begins to focus on the lawyers and the accountants, whose squabble over matters of disclosure and client confidentiality might herald their own nightmare - accountability, responsibility and nobility. As it develops, the squabble might reveal grounds for some of our leaders to pull nervously at their own increasingly tight, sweaty collars?
A snapshot of recent times, however, stretches credulity almost to breaking point as the system seems to more vigorously hound the humble while favouring the wealthy and entrepreneurial, no matter how reprehensibly they might have behaved.
When all said and done, there is no formal contract with our birthplace; having no choice as to where or to whom we are born, life is a series of handshakes as we constantly review our definitions of trust and reliance, which is why we can elect those whom we choose to govern us and discard anything that fails to meet our expectations.
There comes a point, however, when enough is enough: if you promise to stop robbing us, and promise to make sure that accountability, responsibility and nobility prevail, we will heed your urges to work longer and harder. If you don't, you will have a very big problem indeed.
Paul Bantock
Further reading and viewing
25 Jan 2006 - ITV's Where's my pension gone?
Hundreds of billions of
pounds saved by members of employee pensions schemes have vanished without a
trace. It has left
over a hundred thousand workers with little or no retirement savings, and
millions more facing hardship in old age because of slashed benefits.
In a revealing documentary for ITV1, business journalist Jeff Randall
investigates how the British public has been failed so massively by the company
pensions system, and tries to find out exactly why our pensions have disappeared
and who’s responsible. Download the fact sheet.