When the Daily Mail announces that “this is the worst time in living memory to retire” things must be bad.
Some 60 percent of people aged over 50 now expect to work past the retirement age of 65 because they cannot afford to stop work.
The government has encouraged us to take out private pensions rather than increasing the state pension. Now the collapse in the stock market has wiped a third of the value off those pensions.
One in three 55 to 64 year olds believe they’ve poured their money down the drain by saving into a pension, says a survey by insurance giant MetLife.
The National Pensioners Convention (NPC) calculates that the average private pension will give a single man of 65 an income of less than £2,000 a year. A pension pot of £100,000 will, at current annuity rates, yield an annual sum of just about £4,500.
Meanwhile, the National Association of Pension Funds reckons that 1,000 private sector final salary schemes will close to new members over the next five years, and a quarter will close their schemes to existing members.
Traditional final salary schemes are seen as providing the most secure retirement. But many employers offloaded their schemes to pensions buyout merchants—private equity operators who are solely out to make a profit.
Hundreds of thousands of workers have had their pensions handed over to these speculators without being given any say.
Nine million people rely solely on the state pension of £95.25 a week, or a £57.05 reduced rate for those, mainly women, who have not paid enough national insurance contributions to qualify for the full amount.
Britain’s state pension provides around 30 percent of average pre-retirement earnings, lower than in Greece, the Netherlands, Spain, Austria, Hungary and Denmark.