Confidence In Traditional Pensions Hits An All Time Low – Time To Take Action!

Those of you who have been reading my ‘The Growing Pensions Scandal and How To Protect Your Future!’ series (serialised in Your Property Network magazine, in my blog and now available as an investment guide) will know how close this subject is to my heart.

New stories, released this month (September 2011) provide further proof that traditional pensions have failed us. If you haven’t already turned to property to provide for your retirement, read on for the latest facts and figures. If you are already an advocate of using property for your pension, call us today on +44(0)1273 447 300 to find out what our current opportunities can do for your portfolio.

NAPF says decline is “particularly worrying”

The National Association of Pension Funds (NAPF), which represents almost 1,200 pension schemes with combined assets of nearly £800 billion, has called on the Coalition Government to urgently boost confidence in the system – or risk seeing millions of Britons slide into poverty.

This call follows the latest NAPF survey, which reveals a mere 35% of people questioned say they still have faith in the traditional pension system. This figure has fallen 10% from 45% in the past year alone.

Joanne Segars, chief executive of the NAPF, says faith has slumped at a time when it should be growing. She comments: “This decline is particularly worrying, because from next year millions of people will be auto-enrolled into workplace pensions which they clearly have so little faith in.”

We need to wake up – today!

Ros Altmann, director general of Saga, the over 50s group, agrees that a growing number of people have turned their back on traditional pensions after the series of scandals and midst increasing uncertainty over their jobs.

Ros tells us: “People don’t have confidence in pensions. We need to wake up to what is happening to savings. We have moved away from a culture of saving towards a culture of debt. If an advisor is advising you to put money into a pension it requires reams of paperwork but, until the credit crisis, it was very easy to borrow hundreds of thousands of pounds you could never pay back.”

Too little, too late …

In reply, pensions minister Steve Webb states: “We entirely agree that more needs to be done to boost confidence in questions. We’re working on plans to simplify the state pension – providing a firm foundation on which to save ahead of the introduction of automatic enrolment.”

Is it enough, though? Or is it too little too late?

Andy Zanelli, head of technical sales at Axa Wealth, believes not and has another solution. In an interview with FT Advisor, he says people simply don’t understand the pension system.

An educated answer

“Pension education should start at school,” claims Zanelli. “People are missing out on the benefits of long-term contributions as these issues are not properly caught in schools. It’s a fundamental education piece. Youngsters opt out because they haven’t been properly engaged about the benefits of a pension scheme.”

He continues: “If people were educated, they would step up that risk staircase and maybe move their pension money into something a bit more balanced. People simply don’t understand investment risk. This education should absolutely start at school! We have citizenship and personal, social, health and economic [PSHE] and still children come home with no financial kind of education.”

First steps towards an “impossible task”

I agree wholeheartedly! Yes, financial education should start in schools, but what about those of us who are older and may have already lost out in the pensions scandal? Zanelli believes there is another issue which compounds the problem.

He highlights that many women are still relying on their husbands for their pension pot and warns that around 50% of marriages end in divorce.

Zanelli asks: “If the divorce is sorted out properly, the woman will get half of their husband’s pension pot, but do they understand the implications of this? Do they satisfy a short-term need for a roof over their head, or take some of the husband’s pension fund which has all the other valuable additional benefits? It sounds an impossible task, but we have to start somewhere.”

The property path to success

For Zanelli, concluding that choices are often based on short-term gratification, firmly believes that education is the way forward. So do I and that is why I am so passionate about this subject!

NAPF is turning to look at the Government and what does the Government do? Do you really think we have the time to sit around, twiddling our thumbs, watching our savings disappear and waiting to see what happens next?

No! Of course not! Take action today by deciding you are no longer going to buy into this nonsense. Then, if you haven’t read it already, download The Growing Pensions Scandal and How To Protect Your Future! This, is my opinion, is the absolute best place to start taking control of your own financial future in retirement.

Call our portfolio managers today for a no obligation chat about how to start building your pension pot through smart investment in property.

David Ball: +44(0)1273 447 307 or david@axiscontact.com

Russell Bonner: +44(0)1273 447 301 or russell@axiscontact.com

Live with abundance,