Guy Opperman, the UK Pensions Minister, supports continuing to auto-enrol breadwinners into pension schemes during the cost-of-living crisis, suggesting that everyone agrees the more prominent people’s pension pots, the brighter is their future.
Not everyone agrees. I don’t.
And I’ve been a leading pension professional for 40 years, heading up pensions for brands now part of Royal London, Santander, RBS Group, and HSBC … I’d say it’s safe to put myself out there as a pension expert. I have concluded that private pensions should come with a severe public health warning.
They are not the answer for UK citizens, the DWP, the Treasury, and the NHS.
They are simply the answer for greedy shareholders and executives, as they slather over profits and bonuses at the unaccountable hierarchies of profit and power who hold hostage and want to tap into for fees the trillions in life savings of the general public.
As the pensions ministers surround themselves with the opinions of unaccountable hierarchies, they are convinced of their logic.
Bigger pots equal a better standard of living in old age.
The government peddles the old thrift argument as most of the population is being forced into tough decisions choosing between heating or eating. Tighten your belt, and don’t forget to pay your future self. No one else will. It’s a frightening picture they paint.
State pension dates have been pushed back. Inflation proofing State support challenged. Guarantees long disappeared from occupational pension scheme support. Average defined contribution pots stand at less than £3,500 per household.
Pay more. Pay more. Pay more. Shout our leaders.
Here’s what I found.
First, let’s get our priorities right.
“To recommend thrift to the poor is both grotesque and insulting. It is like advising a man who is starving to eat less.” – Oscar Wilde.
Most people are in a cash flow valley right now. The priority should be to make it to the other side. Failure to do so could mean there is no future.
I read in the Telegraph yesterday about a lady diagnosed with cancer putting off treatment as she was distracted by an energy supplier taking her to court.
Next, let’s get our facts straight.
The cliff edge of retirement is terrible for our health.
If we want to live longer, we need to remain mentally and physically active for as long as possible. A study by the NHS shows that 60-year-olds can expect to live healthily into their nineties.
Instead of forcing breadwinners onto treadmills of a work existence, on the bet for the best part of forty or fifty years, they may be able to buy happiness in the last 16 years of their life. Here’s the truth. Many will lose that bet.
The unhealthy treadmill might kill them if the cliff edge doesn’t.
All this could change if advisers spoke the truth about finances instead of selling pensions.
What’s the big secret that the advisers are not telling us?
The truth is that we make wealth; the product they sell saves the money we’ve already made.
That pension pot isn’t down to them. It’s down to us.
It is always down to you. You earnt it. It’s what you didn’t spend. And after inflation, fees, and taxes, it hasn’t done much.
No. Advisers should advise you to find work that doesn’t feel like work from which you never wish to retire. But that doesn’t pay their fees.
Get off that treadmill. Right now.
Do what you’re good at, you love, the world needs and will pay you for.
There are loads of examples around the world. Just think of famous rich people over 60 who still work. The celebs and those who made it after 60, the wealthiest people in the world, still work after 60. They work because it keeps them going.
Look at the centenarians in Okinawa in Japan, they have a saying, “Retire, and death soon finds you.”
Why can’t the activity the NHS prescribe to help us live longer better be economic activity?
Drop that cash flow into your forecast.
Do you still need a pension pot?
I’m not saying you don’t save. Saving is part of an overall financial planning strategy. The most significant part is you and what you contribute to economic activity. And the most important investment is the one you make in yourself.
Do you need to sacrifice putting food on the table for the kids, or heating the house this winter, just to fill the pockets of unaccountable hierarchies of profit and power?
Or the advisers?
Or Guy Opperman?
Stephen R. Covey once said,
“Retire from your job, but never retire from meaningful projects. If you want to die early, retire to golf and fishing and sit around swallowing prescriptions and occasionally seeing your grandkids.”
Many people want to re-invent themselves mid-career, but illiquidity in pension schemes up to age 55 sees them remain on the treadmill. That and the scary stories from pension sellers.
I say, find that meaningful project sooner rather than later.
It will help you live longer and better.
It will help DWP and insurers target pensions to the Old-Old, people who are healthy in later life being the Young-Old.
It will help the Treasury, as continuing economic activity is taxable. Whereas funding pension tax breaks is a drain on the economy.
It stops the brain drain from cliff-edge retirement policies.
And it stops the strain on the NHS, which can’t cope with how things are.
Would appreciate your thoughts.
I think I’m correct, but everyone around says otherwise.