Pension pot changes

[Aggers]

I am puzzled, and somewhat suspicious, of the recently announced Government
plans to allow workers to withdraw some of their 'pension pot' in company pension
schemes. I know I would probably be told that it does not apply to me, but I am
concerned that if vast amounts of money are withdrawn from those pension providers
who invest money to generate the means to pay me my pension, may find that they
have insufficient funds left to generate the necessary cash to pay present pensioners.

What do you think?

[manxie]

The same is happening here in the Isle of Man too, as you likely know we are an independant country to the UK we have our own government and make our own laws etc .

We have our own pension funds here and national insurance just like the UK.

Recently the UK government(tories) have taken off us over 200 million from our GDP by demanding we return a portion of VAT paid often to uk suppliers anyhow for goods we have to import even foodstuffs all have to come in by boat, as does everything practically.

So you can imagine the cuts we have had to endure because of their move to screw everyone especially the poorest or disabled or handicapped.

We have a population of only about 80,000 so we have been hit very hard indeed and have had to draw down on reserves to relieve some of the pain, but as anyone knows you can't raid the piggybank for long till you go one day and find it empty.

At the present time we are told the pensions fund will cease to support demand in about 25 years, so like the UK changes are having to be made everywhere in the hopes that somehow we can balance the books better to still provide for the younger generations ie those 40+ now and the younger ones as well still to contribute to the funds, there is talk here to extend the working life same as UK and raise retirement ages, where will it all end I wonder??

I am glad I and my wife are retired now and have our pension funds (all spent) lol and also get our state pensions, I do wonder if my daughter of 44 and her younger sister 24 will be assured of a pension they can live on when it is time for them to retire. I have two sons as well 45 and 32 who are both now resident in the UK so have to safeguard themselves as best they can.

I would imagine that ultimately the "state" pension will at some point be retired itself and everyone who works will have to rely on private investment companies and pay into private pensions to ensure their financial security in their old age.

Sadly the dreams of the post war years of social security and pensions and a welfare state are being abused by many as in people from abroad coming here for medical treatment for free that they can't afford in their own country.

Another flea in my ear is the new residents from the EU and elsewhere... A bit of UKIP here I believe they should have to prove that they can support themselves for at least 1 year preferably longer even 3-5 years and no benefits at all till then, all their entitlement till they have paid in for example 3 years then is zero, all they would be offered is a single fare to return to where they came, that way you deter the scroungers and encourage hard workers (that we need) sadly we no longer have apprenticeships to provide our youth with the chance to work and earn their own way, We need a big change to how things are done now and if the EU don't agree then we should get out we can still trade as well all round the world as we always have, still I am digressing from your point sorry but in a way it is all connected we need more young people working and contributing to the economy and ultimately the state pensions.

Manxie xx

[Workingman]

I was always under the impression that the UK pension pot had continually been spent on projects past, present and future and relied on today's NI payments plus debt. It has never been invested in order to grow and meet future needs. Blame politicians for that.

As for private pensions, the old 'caveat emptor' or 'the value of investments can go down as well as up' had to be heeded. It does seem strange, however, that pension funds would be allowed to drain their pots and thus break their contractors with investors.

In the short term things should be fine, but I do worry for the likes of Manxie's children, and also my own. Unless inflation runs rife, or Monopoly money is printed, their pensions look increasingly at risk.

[TheOstrich]

I share your concerns, Aggers. Now that people will be able to withdraw 100% of their pension pots rather than the old system of 25% maximum lump sum, and the rest used to purchase an annuity, there is a concern that private pension providers will see less funds flowing their way as less people will want / be forced to purchase annuities. Of course, a prudent person would buy an annuity, but how many people are going to be prudent? Good private pension providers should already hold sufficient funds to pay for all their annuity commitments, but it wouldn't surprise me if some ultimately run into trouble and there isn't some "consolidation" of pension providers in the coming years. Either that, or the pension providers have to diversify and try and find new products to sell. I know that my own pension provider has been badly affected by bloody Osborne's initiative. A slightly worrying time .....

[cromwell]

I am convinced that the politicians of the UK would love to make the old age pension means tested. Pensions make up most of the cost of the welfare state and sooner or later they will be attacked. The ageism of media coverage these days, talking about how much better off pensioners are than the young, is a precursor to all this.