Never Retire

Pensions are underwater

It will be fascinating to see if we get real transparency and competition in pension provision, now that the vast horde of public sector staff can no longer rely on the taxpayer to fund a nice, cosy retirement.

No doubt the unions will fight for a reprieve, but ultimately public sector workers - like the rest of us - will have to focus very carefully on where their pension contributions go, and how much of their return is dissipated in fees, brokerage and dealing costs. No one will have the luxury of assuming they'll actually receive a pension (certainly not a life-sustaining one), just because they pay into one today...

The corporate pension deficit stands at £362bn, directly affecting 12m people. And while all sorts of indexing and accounting tricks changes will be used to reduce the impact on company balance sheets, that won't translate into pension incomes for employees.

And there's no reason that the public sector will fare any better, absent the taxpayer safety net.

Image from Early Retirement Today.