The Empty Pension Pot

In April last year I wrote about how we are rapidly approaching a retirement crisis. We may have poor pensioners now, but many of the next generation (as well as my own) will not be able to retire at all. As more and more us fail to buy a property, and pay off the mortgage before we retire, and with the rapidly rising number of self employed people with no pension provision whatsoever, retiring could very well become a thing of the more fortunate.

Before pensions were created in 1909, you only retired comfortably if you’d had a good job or came from a financially secure family. Even so, pensions were still only the provision of a lucky few. If you were too poor or, like most people, didn’t have a job that allowed for you to save, you simply worked until you were too old or too ill to work and then you relied on family or you died in poverty. Today, those parents lucky enough to have pensions and to have bought their homes are now dipping into their own savings to support their own children and get them on the property ladder as if this is the golden key to a secure future. Without this cash injection, many people will never realise home ownership and for those of us who don’t have parents that can or will help, the future is rent.

As money is squeezed still further, younger generations are having to face saving for retirement and first home deposits at the same time straight out of University. Graduate job earnings usually fall far below University promises so for many, this is just a pipedream.

I am one of the in-betweeners. Despite being in full time, reasonably well paid work since I left school at 18, I generally worked via agencies and moved companies often, so I never put into a company pension plan. After three years of University late in my life, and then running my business for 6 years, I don’t have the money to put into a private pension and as I am single I don’t have someone to split costs with, so there is little, and often nothing, left at the end of the month for anything but the essentials.

For the most part however, I have always kept up with my NI contributions, and provided I keep up payments going forward, I will at least be entitled to the full state pension (should it still exist) which will provide some of my basics each month based on today’s costs. There won’t be anything left over, but there isn’t anything left over now, so not much is going to change except for inflation rising faster than the rate of my pension. I still have 22 years to do something about it. But what when there is nothing to save with.

I have always been suspicious of pensions and despite taking advantage of high interest savings accounts when they existed, those days are long gone. I can’t save enough to buy a house, and I can’t save enough for a pension. I am trapped in the middle and like so many people now, all I can do is hang on to what I have.

It’s a bleak outlook. It could be bleaker. I know I have to look after myself and stay healthly so that I can keep working for as long as possible. I have to make the savings I have, work to their best potential. But I least I have those things. There are plenty with far less than me, and whiilst I still have that, I have something to work with.

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