Anthony Hilton: We can save if we think we are getting value
The pensions industry is adept at painting the Brits as feckless spendthrifts
Saturday 06 October 2012
Nest, the Government-backed new second pension, was launched this week, amid much fanfare about how it would encourage the nation to start saving for its old age. And perhaps it will when the roll-out is completed in about five years' time and the millions working in small companies where pension provision currently is limited are brought into the net.
I am not convinced, however. I have always thought the reason poor people did not save was that they did not have any money, and that will continue to be the case, whether or not they are enrolled automatically into a pension scheme. I have doubts too in the majority of cases whether the amount which can be saved will make a material difference when it comes to retirement. The way the scheme is unfolding with thousands of small pension plans means vast amounts will instead be eaten up in costs and charges.
The more general point, though, is that the pensions industry has become adept at painting the Brits as a feckless bunch of spendthrifts – largely to further its own commercial ends – but the facts don't bear it out. Indeed in the last few years the country has been putting cash aside at an astonishing rate.
If the period before the financial crash was a time when people exploited the value of their houses to spend more than they earned, the period since has been the opposite. Figures published by the Bank of England on Wednesday showed there was a net injection into housing equity of £9.8bn in the second quarter of this year. That is the opposite of equity withdrawal, and it is a measure of how much people are paying off or reducing their mortgages – and thereby increasing their stock of assets.
There have now been 17 such increases in a row, and it means the cumulative net injection of equity – or debt reduction – since 2008 when the troubles began is now £133.2bn.
That suggest to me the Brits have no trouble putting money aside if they know what it is being invested in. They just don't like sticking it into pension plans which they think offer poor value.
- 2 Harry Potter fans can apply to the Hogwarts-inspired College of Wizardry
- 3 Jessica Chambers: 19-year-old woman 'doused with lighter fluid and burned alive' in the US
- 4 Russell Brand calls Nigel Farage 'poundshop Enoch Powell' in BBC Question Time debate
- 5 Orange Wednesdays are no more
Weather bomb in pictures: Storms cuts power for tens of thousands – and snow is on the way
Jessica Chambers: 19-year-old woman 'doused with lighter fluid and burned alive' in the US
Russell Brand calls Nigel Farage 'poundshop Enoch Powell' in BBC Question Time debate
Russell Brand was rendered speechless on Question Time by this man
Fury at Airbus after it hints the super-jumbo may be mothballed
Disgruntled RBS worker writes hilarious open letter to Russell Brand after anti-capitalist publicity stunt leaves him hungry
Nigel Farage defends Kerry Smith 'ch***y' comment: 'If you are going for a Chinese, what do you say you’re going for?'
Nigel Farage's approval rating hits 'record low' as popularity suffers in wake of Ukip sex scandal
Pakistan school attack live: Taliban kill at least 132 children in 'horrifying' massacre
Sony hack: Angelina Jolie branded 'seriously out of her mind' in further embarrassing leaked email saga
Panic Saturday: 13 million Britons spend £1.2bn – while 13 million others across the country live in poverty unable to afford food
iJobs Money & Business
$200 - $350 per annum: Carlton Senior Appointments: Managing Producer Office...
$125 - $225 per annum: Carlton Senior Appointments: San Fran - Investment Advi...
Up to £70,000 per annum + benefits: Sheridan Maine: Are you a qualified accoun...
Up to £65,000 per annum + benefits: Sheridan Maine: Are you a qualified accoun...