Sunday, 23 March 2014

Lamborghini's For Sale, Going Expensive

When the major political parties appear to agree about something it is the time for the ordinary citizen to start worrying. 

As the worlds of pensioners and pensions move into uncharted and uncertain territory it could be that few know where they are now and fewer know in which direction they are going.

The complexity is beyond most people especially those in the media and related trades.  Because of the mind world they work in explaining something long term and complicated has to be reduced to the now and simple explanations, whether they bear much relationship to reality or not.

For some time now, the figures on pensions in almost all the sectors have not added up and have been worsening.  Politically, real discussion was avoided as well as admitting the steady deterioration in future prospects. 

Those who do understand often chase get rich quick wheezes such as property, the latest speculative fashions and for a very lucky few high paid jobs with fat pay offs and pension pots in either major financial enterprises or public sector bodies.   

Decisions and adjustments that might have been made were not so what has been going on recently has been an admission that some changes are made, however cosmetic or ill thought out whose effects will be felt in later decades.

The Lamborghini cars joke, give pensioners control of their pension pots and savings so they can spend them as they will, is illustrative of some misconceptions. 

Checking the prices of their models reveals that they are more expensive than the savings or funds in the pensions funds of many people, the annual insurance is greater than many actual pensions and the petrol costs more than match the household fuel bills.

The reality is that for very many, what they might have is a continuing gradual attrition of the funds for ordinary reasons, often matters beyond their control.  The disabling conditions that can come with age and add to livings costs is one.

At the same time there is a squeeze beginning in many ranges of income generally which may curtail savings for those people for the future.  In any case changes in the social structure etc. may well lead to much less saving and then smaller pension pots.

It is possible that this squeezing may worsen at the same time as the retired population increases significantly.  At the same time as we are fiddling with the pensions we are told that there are more centenarians than ever and the numbers of those in great age will rise and rise.

At one time there were not many men who made it much beyond the age of 65 and that at a time when the old were a much smaller part of the population.  One way the change is already having an effect is because the "cuts" in some areas match the deficits in pension schemes.

The figure still do not add up and if either the economy or the financing runs into greater problems then the whole situation will be worsened by the needs of the unfunded pension schemes, very many in the public sector.

The figures might begin to fit if the pension age was raised to 85 for state pensions and public sector pension schemes.

1 comment:

  1. This article is mind blowing. When I read this article, I enjoyed.

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