Jeff Prestridge

Poisonous pensions: why we will work until we drop

No-one in their right mind would have willingly created the monster that is now the country’s current pension system.

It has become the financial Hydra of modern day Britain. Bizarrely, it is deterring most of us from saving for retirement because we are intimidated by its many heads of poisonous anti-saving rules.

Governments past and present – red, blue and in-between – are primarily to blame for turning what should be a saver’s friend into a foe. Greedy pension providers with their rapacious charges haven’t helped either.

Politicians have meddled furiously, justifying it on the grounds that pension savers enjoy generous – and costly – tax privileges. In doing so, they have created this multi-headed savings beast that few of us trust or understand.

No wonder research, just published by insurer Partnership, suggests that nearly one in five people over the age of 40 do not believe they will ever be in a financial position to justify retiring. They haven’t saved enough because of lack of trust in the system and because they couldn’t afford to. They will work until they drop.

Ever since Margaret Thatcher started the meddling in the cause of freedom and capitalism, things have gone from good to bad. It was Maggie and her minions who forced employers to reduce surpluses on pension funds, and planted the seeds of a future mis-selling scandal with the birth of personal pensions.

Deluxe work pensions that provide employees with a retirement income based on the number of years worked and final salary have virtually disappeared from the landscape. The demolition job was completed by Gordon Brown, wearing his hard hat, when he made his crass decision in 1997 to bulldoze through a heinous annual tax charge on company pension schemes. Some have quantified the hit at £5 billion, others at £10 billion.

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