Middle-class problems: Pensions
By Mike Higgins
There are many scary websites, but none more so than the pension calculator sites. You enter the annual pension you'd like for a "comfortable retirement", then what you can afford to put away each month. The site then informs you that you're going to need to save three times your pay packet. You sit at the kitchen table and have a cry. And forget about your pension for another couple of years.
Except now you can't. As of this month, most employees have been automatically enrolled into a "workplace pension" scheme. Not one of those ones your Uncle Brian's golfing partner Gary has – a suitcase bursting with cash and diamonds delivered each month ad infinitum and dignified by the term "final-salary pension". No, yours is probably a "defined contribution" scheme, which is financial-adviser speak for "Hmm, good luck with that."
You put a bit in, your employer does the same, you get some "tax relief", and it all ends with a fat-fingered fund manager who takes an almighty 25-year punt on the stock market. Great.
You can opt out of this Government scheme, and indeed all private pensions. That way, you will dodge the various scandals that tend to drag around after the word "pension": ruinously low annuity rates, for instance, or mis-selling. But how do you provide for your old age?
How about this: a) crank up the mortgage; b) buy that doer-upper; c) pray to god that mortgage rates stay at 0.00008 per cent; d) pray to some other god that the property bubble lasts for 20 years; e) then flog; f) kerching.