Try thinking about retirement as a holiday

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The Independent Online

Another week, another pensions survey pointing out that we all need to save more. Last week HSBC suggested that there's an ostrich generation of folk failing to take responsibility for their retirement. This week it was the turn of Scottish Widows.

The Lloyds Banking Group-owned insurer published its seventh annual UK Pensions Report, launching it with a debate in Westminster on Tuesday. Frankly, there wasn't much of a debate to be had. Instead, there was consensus from alll the interested parties there – including the charity AgeUK and the Personal Finance Education Group – that the coming pensions gap is a problem and something needs to be done about it.

Scottish Widows' pensions guru Ian Naysmith suggested people need to be "frightened" into doing something about their pension planning. Shadow Pensions Minister Rachel Reeves said she wants to find ways to "encourage" people to save for their retirement.

The problem, as most attendees conceded, is that most ordinary folk have more pressing financial priorities than saving for retirement. For young adults, it could be the worry of paying off student debts or building up savings in the possibly folorn hope of buying their first home.

For slightly older folk, raising children or the ongoing cost of maintaining a home can swallow all their spare cash. Even those who have money to spend or save often choose to spend it now on holidays or a better car than lock it away. That's totally understandable. As Ian Naysmith pointed out: "There's no point in living in poverty now to have a decent time later".

Scottish Widows' figures show that only 51 per cent of people are making enough provision for their retirement. Last year the figure was 48 per cent, which sounds as if there's been an improvement until you look back and discover the figure was 54 per cent in 2009.

The fact that half of us is not saving for our retirement may not be too big a problem if we've all done the same and are aware of the financial implications. But if we are really ostriches ignoring the future and simply living and spending for now, then that is a worry. Think about retirement as a long holiday – does that help you take it more seriously?



Buy-to-let mortgages are back with a bang, with lenders lining up to tap into the market with juicy new deals. Shockingly, some seem to be exploiting potential landlords by charging among the highest mortgage fees I can ever recall seeing.

Two mainstream lenders this week trumpeted their buy-to-let deals. The Skipton has a two-year fixed rate at 3.99 per cent while the Coventry has a five-year fix at 5.49 per cent. Both are reasonably competitive rates for their length until you look at the arrangement fees.

The Skipton is charging £2,495 while the Coventry tops that with an outrageous £2,999. There may well be additional work in setting up a buy-to-let mortgage, but not to that extent. It's time to stop this practice and for all fees to be scrapped so borrowers can compare interest rates easily.

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