Friday 24 January 2014

Reader's Letter Of The Day

From City AM Forum:

Compulsory saving

[Re: Brits told: Save six times more for your pension or face poverty, Tuesday]

It's not clear that a compulsory savings scheme would help to solve the pensions crisis in the UK.

Aside from philosophical issues as to whether the government should be able to mandate what individuals do with their money, there are practical problems to address.

In Australia, which introduced such a scheme in 1992, savings were paid out in a lump sum on retirement. But many just accumulated debts throughout their adult lives (anticipating the retirement payout), and ended up no better off in net terms.

Gerald Patterson.

11 comments:

Mark In Mayenne said...

Yeah, that's what I would do.

Bayard said...

"But many just accumulated debts throughout their adult lives (anticipating the retirement payout), and ended up no better off in net terms."

But the financial industry was a lot better off, having levied administration charges on the pension and interest on the loans, and that's what counts.

Dinero said...

I wonder if it would be possible to leverage your state pension by hypothocating it. Probably not. Or how about a private pension , puting the procedes into the pension fund , a positive feedback loop. (humour)

Lola said...

I know I know that I am in this game, but, I have seen this going on in the UK for years. An awful lot of people budget for the PCLS to pay off accummulated debts. It's sort of an 'endowment financed life'.

Bill Quango MP said...

I spent mine before I even put it into the pot.

Brian, follower of Deornoth said...

Good for them. Nobody can save money as fast as the public sector steal it.

Furor Teutonicus said...

And, id at some point inbetween now, and retirement, your firm goes broke, and you end up on the dole, you will be expected to spend it all before the Bru will give you a single penny.

Mark Wadsworth said...

MIM, it is more or less inevitable that most people will do it.

B, yes, it's a win-win for them.

Din, people have suggested that as well,if the City can find people gullible enough to do something, they will do it.

L, ta for back up.

BQ, well done.

BFOD?

FT, that's another bonus for the means-testers, I suppose.

Lola said...

FWIW as soon as I could crystallise my PCLS I did - and I spend/spent it on motor racing....

Lola said...

Apologies. Re my previous post I need to be more 'on message'..I 'invested' my PCLS in motor racing...

Lola said...
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