UK Pension Poverty Warning

A former pensions adviser to the Government has warned that 80% of people may not have enough money to live on in their retirement.

Independent consultant Ros Altmann said the UK is in the grip of a pensions crisis and criticised the Government for presiding over a system in which employee savings have been destroyed.

Her comments were made as part of an ITV1 programme, Where's My Pension Gone?, to be screened at 9pm on Thursday. In it, pension experts assess the state of the company pensions system in the UK and examine the effect that collapsed schemes have had on victims.

As part of the programme Dr Altmann warns that people should be aware that there is a pensions crisis. She says: 'I would say about 80% of the country needs to be seriously worried that when they come to retire, they will simply not have enough money to live on at anything like a decent level.

'If there is one person in Government who is responsible for this pensions scandal, it has to be the Chancellor. Gordon Brown has been presiding over our pensions system at the Treasury since 1997.'

Dr Altmann added: 'The first act was to take money out of the schemes. He has never put it back in. He has also watched people's lives being destroyed by not receiving the pensions they were relying on. They didn't have any other savings and yet he has still refused to accept responsibility.'

In March last year, the parliamentary ombudsman, Ann Abraham, produced a critical report on the Government's handling of failed occupational schemes. She concluded that advice given by the Government had been 'sometimes inaccurate, often incomplete, largely inconsistent and therefore potentially misleading'.

As such, she called on ministers to compensate an estimated 125,000 workers who had lost some or all of their pensions due to companies going bust. But the Government has refused to accept her findings and ruled out compensation, provoking anger amongst campaigners.

In Thursday's programme, Tony Woodley, general secretary of the Transport and General Workers Union, echoes Dr Altmann's concern for the future of UK pensioners.

He says: 'There is barely a person of any age in this country now that doesn't appreciate the time bomb effect of this pensions problem. We could find the disgraceful situation in a couple of decades time where the third strongest economy in the world sees millions of ordinary working men and women literally on the streets unable to live.'

Source: thisismoney.co.uk, Jan 2007

I guess nowadays, people need to take more personal responsibility and make their own contingency plans. I understand it's difficult to save when rent and house prices / mortgage repayments are so high, but here's a few ideas:

• If you're on a repayment mortgage, change it to interest only.
• Be more prudent with your spending. Martin Lewis’s excellent moneysavingexpert.com site will help give you some ideas.
• Start saving and investing as much as you can afford now - even if it's only £50 per month. It's surprising how much it will be worth in 20 years if you get good compounded growth. I'm investing in the market using my ISA allowance (which means it's tax-free) using the ISACO system at: www.isaco.co.uk/?r=flintoft . It works.
• Start a home based business. You can work from home and build something up part time for an excllent second income which will allow you to save and invest more. If you're committed, you can earn enough to allow you leave your job. I'm involved with home shopping company Kleeneze and earn over £3,000 per month part-time. My job is now my 2nd income!

There's always ways around things if you look.

Hope that helps.