Morning Line: Is it the end of retirement as we know it?

When the kids had all left home my wife and I piled on the pension savings to the maximum for the last ,and highest paid part of my career (12 years). In addition we took the scheme into SERPS when the Govt. were paying people to leave it(The bargain of the century). I also encouraged my staff where possible to take their bonuses and buy property ,to let, at bargain prices in the early 90s. Most who took annuities in the early 90s were getting double figure interest. This all shows it is all a matter of timing and luck in putting a pension together. One other major factor was that during the long years of savings the pension company received all dividends gross with no tax payable. The return on pensions savings all through the Thatcher years and into Major were phenominal by comparison to the present day. Brown and the socialists were the biggest disaster for pension savings in its history and no one can deny this. We all thank our lucky stars that we saved in an era when you got real Govt. support not saying one thing and doing you down with another.

Just a PS. Many of my staff consulted me in the 90s on annuities. The prices fluctuated on a daily basis between Companies. I remember the middle gilt yield in those days was around 14/15 % generating high annuity yields fixed for life on dramatically lower life exspectancy than reality turned out to be the case. This is a hazard of the annuity business you can only pass on the losses to the next generation.

Graham just highlights how much of a casino we are all playing in - even if someone else picks the numbers - knowing some to be "loaded" against us (and they pick up their "house commission" win or lose. Before the next crisis (there certainly will be another) the only answer is to nationalise pension companies, insurance firms, banks and more... before the next set of City spivs scalps us once more.

The author seems to be in a media driven panic.......he's only 28 and a financial journalist, when his funds are in a SIPP and he starts to self-manage them after 30 years he'll have enough experience to generate an income from the markets without having to rely on a "pension"......this self-managed savings pot will be the source of his income.

Moral: don't believe everything you read, trust your own ability.

Or you could just join the Police. Average retirement age 51 after only 25 years working and on a two thirds final salary gold-plated pension. You will likely get a promotion about two years before you retire as well so your pension will be that little bit higher. You'll be young enough to get another job and live the life of riley paid for by the new generation of tax-paying youngsters in the private sector. If you don't fancy the police, try any other civil service post. PS I'm in the same bucket as you, Chris; trying to save a £300,000 pension fund for me, buy a house out of taxed income and also paying for civil servants schemes through my taxes.

Just another ryder for serious pension savers, although as a trustee we largely got it right through the 70s 80s and 90s for our members. They retired financially comfortable we could not see the effects of draconian tax on pension income. Losing your age allowance effectively cancels out the Govt pension and having annuity income takes you into the 40% tax bracket. One way round this is to assess the maximum pension without losing the age allowance and then save further in ISAS where the income is tax free. I urge you all to examine the post position whilst planning your pension. I came to the conclusion in 1970 that constant vigilance and regular examination was the only way not to be disappointed when you get there.

As an 'early retirement investor' I very much support the view that one should contribute to the 'max', when possible, into both low-cost stock and shares ISA's as well as a SIPP. Not only for yourself, but also your partner, children or grand children.

Once you realise that:

1. the idea of a fixed retirement age will be a fondly remembered quirk of a passed age and tax payers will only be able to retire when they can afford to maintain a lifestyle that is acceptable to them

and

2. the majority of wealth is created from investment income rather than savings or employment income, it makes sense to focus on investing for retirement rather than working more.

As a result, depending on 'fair' value in the market, as an 'early retirement investor', I very much focus on a rather simple income re-investment strategy, rather than any other type of investment strategy. In the intermediate periods of high valuations/lowish -no growth- dividend yields, I am more than happy to wait for the inevitable downturns to fill my boots.

Its not easy & I am lucky to have bought property in LONDON BOROUGHS in Zone 2 & 4 at low prices. Thanks to BLAIR/BROWN SOCIALISM I fill them up with Single parents GIVEN THE RIGHT TO REMAIN status so they are not ASYLUM SEEKERS anymore. Guaranteed rent effectively for as long as I own them.Tracker mortgages by sheer fluke at 2.4% or less...THE WELFARE STATE PENSION FOR LANDLORDS...Most my tenants are ungrateful despictable people........which is hard to believe but very true... Yes retirement will be harder for everyone.I was in a guaranteed final salary scheme but only for around six years with a former employer. Employees there now pay 7%....Personal pensions. If you consider yourself capable open a SIPP.I did due to fund managers not being very good at their chosen profession. The state....forget it. The government cannot even reform itself & sovereign debt COULD HAPPEN. Be a Policeman? Well they contribute 9% of their salary but they no longer get mortgage allowance or free rent & in this increasingly violent society why shouldnt they retire early. Everyone has their own agenda including single parents,asylum seekers,alcoholics,criminals just dont let the lunatics takeover the asylum. Accumulate as much wealth as possible for age 60+ but dont live on bake beans enjoy life after all we only get one.

Our so called leaders will make sure their pension pots are stuffed to bursting. I'll bet the Kinnock's Major's and the like are receiving a lot more than 6% annuities on their gold plated pots. It will be the same for the current 650odd parasites that sit in the house at present. What cut backs is their mantra.

To get 2/3 of your final salary (plus inflation proof) as a pension the rule of thumb is that you (or your employer) have to contribute about 20% of your salary to the pension scheme until you are 65.

Re Graham Barlow at 12.59

He makes a good point about the age allowance (income tax free pension) being clawed back after the combined state and private pension reaches a modest level and that income within ISAs is tax free.

He therefore suggests investing in ISAs rather than a pension scheme beyonf a certain point. However, there is no tax relief from investing in an ISA but there tax relief for investing into a pension scheme (up to £1.5m ish). I prefer to get the tax relief up front and invest in the pension scheme.

Chris, there is one major blessing about being 28 and just starting paying into a pension - by the time you reach the date you want to start drawing on it, annuities will be long gone and everyone will be drawing down their pension and living with the risk.

But the time you should be into risky investments is now. Risk is highly subjective and depends entirely on the amount of work you are prepared to put in. I can only assume most investment managers don't put in much work . . . .

David Evershed. Lucky old you looking at a pension pot of £1.5 Mil.. In the 80s and 90s these figures were unheard of and the salaries and the Tax relief were far lower! However I am sure you have got the right wave length Constant vigilance and reviewing regularly..I hope annuities will be dropped because this purely a lottery ,and my judgement tells me that annuities of 11.5% will never be seen again.

The pension system is broken. Outside the protection of the Public Sector it is impossible for most people to save enough during their lifetimes to build an investment pot large enough to deliver anything like a 2/3rds final salary pension.

The maximum public sector pension should be reduced NOW for everyone to no more than 40k - and that includes everyone already receiving public sector pensions - some well over 100k. The country cannot afford it because they are all paid from the Current Account - there are no investments producing the colossal outflows now needed.

As for the lucky few in the private sector who have SIPPS or other pension pots - let them have full and immediate access to the whole pot rather than lock them in to a ludicrously low return. When it's spent let them starve or go back to work - this will have 2 effects. It will make people aware of the financial problems ahead and we will all die earlier through worry and reduce the burden on our children!

I contributed into two private pension companies in the 1980's - one went bust and the other, mutual, company was swallowed by a Bank. The current forecast for my pension in a few years time? £80 a month!

But at least this is better than my in-laws; one a sales director and the other his PA for 30 years - with the help of a "Maxwell" type MD and our friend Gordan they got nothing for 30 years of contributing. My Farther-in-law had to work to the day he died just to pay the council tax etc.

Am I contributing to my pension? Not likely!

Rob Moore, so why don't you become a copper then if you think its that wonderful?

In any event you are wrong. Since 2006, the police pension scheme has a minimum retirement age of 55 along with less generous benefits. The people in that scheme currently have to contribute 9.5%. This is surely set to rise and the final salary finishing line will probably fall off the edge of the horizon for police currently young in service.

Those under the old scheme paid 11% contributions and it wasn't unheard of for bobbies starting off in the 70s to be so poorly off, they had to find illicit moonlighting jobs to feed their families.

And if you honestly believe that every copper gets an automatic promotion just before they retire then you are living in La-La land.

So turn your green eyed gaze back to your speedo. (I assume there must be a reason for your bitterness and bile).

With so much greed around today, most of us will work until we are about to drop anyway so those of you who have saved for a pension, why bother! You will only have to hand over 20% in tax and another large 20 - 30% to the local authority for council tax. When i retire i will have £15,999.99 in savings only as saving or having a pension in this country is truly a mugs game. When my gran passed in the early 80's, she was left with £8 out of £60 from a private pension as she lost half when her husband died, paid tax on it, had to pay full rent and rates which increased way above inflation every year and had her state pension reuced every time she got a small increase in her private pension. This was after my granfather worked from the age of 14 to 65, fought in the war and claimed nothing from the state during that time. Live for today as u dont know what is round the corner.

Surely one point that Rob mentions, that of being enrolled into a 'default' pension fund needs more examination. Having been there and watched my pension stagnate for many years, I have now taken a more active approach. However, I'm now taking on more risk than I would like, as I approach retirement, in order to try to make up for these wasted years.

Most people will start pensions in their early working life, when they probably have little financial knowledge and, quite frankly, have more pressing needs, such as paying the mortgage, raising kids etc. They will rely upon 'financial advisors' to provide the knowledge that they lack in this area. Unfortunately, most of these will not have a clue about portfolio management and will just recommend the 'safest' investments.

We need to ensure that those not approaching retirement, are at least sensibly informed about the risks of taking the 'safe' option and not generating sufficient investment returns to fund the retirement they would wish.

It's worth remembering that (historically) UK taxes are NOT at a higher level.

Anonymous 1. Sorry about the disappearing benefits you and acquaintances experienced. Remember these are private companies. Gordon Brown BROUGHT IN watchdogs (FSA) that, inexpert , inexperienced and perhaps incompetent as they eventually proved to be - were better than nothing. Which is what we had BEFORE these regulators. Self-policing? What, the City? Don't make me laugh. Moral? Never trust a private company to do anything other than try and make money in (almost) any way possible for their shareholders and board.

David Evershed - I believe that the latest figures for contributions to fund index linked public pensions is over 40%, and over 70% for the police and fire service.

You need a fund of £30k for each 1K of RPI pension at age 60, or around £35k to retire at 55. So an average bobby retiring on 2/3 of 30k has a theoretical pot of around £700k.

Nice if you can get it, If you cannot, then you pay taxes to fund it.

any unfunded state workers pension in payment should be cut by 50% NOW if we are all to share the pain of Austerity Britain equally.

Those at the top who have voted themselves mega pensions should be taxed, taxed and taxed again until their pips squeak as a soialist chancellor once said.

The free car and driver for life for ex Prime Ministers should be stopped immediately. After all they help cause the mess we are in.

The HOL should be losed down today and all the bars - 22 at he last ccccount - closed as well.

Agreed wholeheartedly Jock Strap. Trouble is it's a handful of the over privileged that make the decisions. They're not about to let go of the reins. The free car and driver doesn't seem excessive, though, for a minister who guided us all through some great times in the last dozen or so years. The lure of cheap money was too much for some citizens though.

HOL? I have some knowledge (yes, insider) here. I have a cousin who sits in this geriatric day-centre. Like the vast majority of his fellows "up" here, he has contributed VERY LITTLE IN HIS PARLIAMENTARY CAREER (you WON'T HAVE HEARD OF HIM, FOR A START, I'LL WARRANT - but he's set up for life now with ex-MPs pension as well and much, much more. What a country we live in. Dark ages or what? While many ordinary, decent, hard-working folk (NOT behefit scroungers) have had their lifestyle and perhaps families ruined by, say a bill for a new boiler, car repair and similar that they ha.ve little chance of paying for - when these damned people fork out more on a meal... The banks "lead" by jumping straight back into the pigs' trough again, should show everyone what we have become. Cowards who refuse to rebel but still tug their forelocks...