Jayne Dowle: An uncertain future looms for all of us as nation’s pension funds fail to add up

IF I spent all my days worrying about my pension, I’d never get any work done to pay for it. However, like almost everyone else, I’ve got to face the fact that however hard I work, I’m not saving enough. In fact, according to a new survey, putting something aside for retirement has reached an all-time low. Saving has been decimated by the “triple whammy” of economic uncertainty, older first-time buyers saddled with mortgages into their dotage and an ageing population, which means more of us needing a shrinking pot of public money.
By The Newsroom
Published 6th Jun 2013, 13:05 BST

If you’re reading this and feeling slightly smug because you’re in a decent work pension scheme where your employer makes contributions to match your own, hold on a minute. I’d just like to point out that one in five British people are saving nothing at all for the day when they stop clocking in. And this being a relatively civilised country, it is likely that you will end up contributing to their financial survival through your taxes, to support whatever form the state pension takes in the future.

I haven’t got a crystal ball, so I can’t tell you what that might look like in 20 or 30 years, or indeed, pick the Lottery numbers. If I did have such an item on my dressing table, I would be gazing into it every week and hoping for that magic combination to come up.

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Frankly, unless some long-lost aunt leaves me an astounding legacy, I can’t see any other way of personally accumulating the £270,000 the Joseph Rowntree Foundation estimates I will need to enjoy “a living wage” of £16,400 a year when I finally close the laptop lid and retire. And that sum is only so, ahem, reasonable because I have paid years of National Insurance contributions; if I hadn’t I’d have to magic up more like £500,000 to keep body and soul together.

I have no idea where money like this can be squeezed from, unless I auction off the house and live in a tepee, grow all my own food, and sell not only the car but possibly the children. To think that in my twenties the main thing which got me through the drudgery of office life was dreaming of my fifties, backpacking around India. To think also that the first pensions advisor I ever talked to drew me a graph and asked me to pick an age at which I wanted to stop work and that graph started at 45, the age at which I am now. And I am no closer to retiring than I am to taking a trip to the moon, never mind India.

I find it so frustrating because it’s not like I’ve been entirely useless over my pension. I’ve got a modest pot of money in a private scheme from a salaried job I had for several years, which I manage with the help of a financial advisor, and as I teach part-time at a university I’m in the pension scheme there, which is a good thing. Add them both together though and even with two decades still to go before I hit my mid-sixties, I can’t seem to make a six-figure sum – never mind more than a quarter of a million pounds.

Of course, the simple solution is to accept that comfortable retirement was a fleeting notion belonging only to the twentieth century and to carry on working. And I guess in this respect I am relatively lucky, because all I have to do is keep typing and talking and hopefully someone will continue to pay me for it. That’s just me though. What about all those other millions of individuals facing the future with fear? Perhaps we will all be lucky enough to keep our health and strength, but what if we don’t? What if our employers don’t want us, and shove us aside unceremoniously for younger, fresher blood? What if there are no actual jobs for us to do in 20 years’ time? All these “what ifs”.

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No wonder it is easier to keep our heads down and regard the future as if it is never going to happen. The problem is, this attitude will only make matters worse.

I try to face it, I really do. I even read a personal finance planning guide the other week for some tips. To help motivate me to save, it advised me to visualise myself having a “lifetime experience” during my retirement. The best I could come up with was a trip to the garden centre with no guilt because I should have been at my desk instead.

I am sorry then, but I don’t have the answer to my own personal pension crisis, so I certainly can’t come up with the solution to help this government, or the future governments which will inherit the problem.

All I know is that this is one legacy which none of us want, 
but it is one that the majority of us look likely to be stuck with.

Related topics:Jayne DowleIndiaNational InsuranceJoseph Rowntree Foundation