steviedeluxe

Not too sure where to put this, but it may well be of interest to those hoping to retire abroad based on the company pension. It seems to be saying that the govt qe program is affecting the future pension prospects badly. As I'm a freelance worker it doesn't affect me, but it seems a real kick in the teeth for those who've been loyal to a company and expecting a decent private pension.

http://www.telegraph.co.uk/finance/p...s-Altmann.html

Fred James

It affects everyone including freelance workers who may wish to purchase a pension.

Two problems - firstly the money that a company invests in a pension plan is not growing as fast as it should to cover the potential money they will have to pay out because the yield on gilts is so low and they typically invest in these for long term growth.

The second is that anyone who is going to end up with a pot of money from either the company plan or a private plan is going to find that annuity rates have hit the floor. They have almost halved in the last 10 years.

steviedeluxe

Thanks Fred. I've always had my doubts about annuities as an investment choice (you lose your capital in exchange for better returns) but if the rate is plummeting they become even less attractive. So it's gold, shares or property?

jogger

I hope it doesn't touch public sector pensions.....

steviedeluxe

That's a topic in its own...

Garbatellamike

No mate this won't: however, Lord Hutton has already provided the report allowing the Treasury to decimate public sector pensions.

jimenato

Decimate? That seems a bit drastic!

Garbatellamike

decimate is one in ten, it will be worse than that

Domino

and yet what must be one of the most successful pension funds is the Ontario Teachers, assets growing by the minute even in these difficult times.
Surely a lesson in how to run a pension fund that puts all those highly paid "professionals" and asset managment companies in the UK to shame.

mikelincs

Better not, but I think they are only likely to be affected with the restructuring of the schemes, and current pension holders won't be affected, at least I hope not..

HBG

Public sector pensions are guaranteed by the government, does that make them safe?

Only if our government can borrow the amount it needs every month, at reasonable interest rates. I remember Rajoy saying recently that at some stage Spain may well run out of money, their borrowing rate is around 7%, which is unsustainable.

That could happen in the UK too, and if our government runs out of money, they can't pay for anything, public sector pensions included.

Long before that happens, we will start printing money like mad. OAPs will be paid staggering amounts, thousands of pounds a week. It might just buy a loaf of bread.

It has all happened before, a mere 80 years ago; bankers jumped out of their windows, the Germans voted for a mad Austrian with a funny moustache and millions of people died long before they reached pension age.

jogger

This lot are well into the Quantative Easing and printing money like mad.....

Garbatellamike

yep exactly right, them and the last lot too

Fredbargate

The more the merrier

jogger

Very true, they're all the same, well nearly.