Some great reading from around the web.
For a second time this month, I’m going to make a Motley Fool podcast my post of the week. I hope it doesn’t go to their heads!
This new home run is an interview with Dr Ros Altmann, director general of Saga, the old person’s youth club.
Altmann is an expert on pensions, and it shows in her deep knowledge of how the system is still broken, why NEST pensions may be counter-productive, and why working for longer as much as saving more is going to be inevitable for most people (but not you and me, unless we want to!)
Here’s a snippet:
The money used to pay pensions today is funded by the contributions being made today. There’s no fund. National insurance is a myth – there isn’t a fund that you pay money into out of which your pension then comes. So the national insurance system is not working in the way people would expect it to work.
The level of state pension that is paid out is determined politically, rather than being, if you like, a function of proper calculations of life expectancy, actuarial equivalents, and so on. That again goes back to some of the problems we’ve got, which is that over the years the government has known that there are more and more people coming up for state pension age.
The baby boom generation has been around [for years] now, the first one is going to hit 65 this year, or already has, but the government kept pretending that it had sorted out the problem of funding pensions for all these people by using forecasts of private pension income that were completely unrealistic, and that weren’t adjusted sufficiently over time.
The whole podcast (which is also available in transcript form) is vital listening for anyone who wants to see the shape of retirement in 30 years hence.
I strongly recommend a listen/read.
From the blogs
- Are you saving too much for retirement? – Gen X Finance
- Your personal rate of inflation – Oblivious Investor
- Instant noodle inflation – Shanghai Scrap
- Financial memory syndrome – The Psy-Fi blog
- I survived – but just barely – The Wisdom Journal
- Furtively rooting for the last incandescent light bulbs – A Grain of Salt
- House prices went up everywhere 2002-08 [chart] – Clusterstock
- Playing the field with your investments – Investing Caffeine
- Can a new kind of capitalism ever work? – Simple in Suffolk
- The Average American’s finances are a shambles – Digerati Life
- In praise of idleness – Sawbones Surio
Money Maven roundup
- Canadian Finance blog explains the P/E Ratio.
- MH4C explores various ways to send money.
- Wealth Pilgrim on how a mortgage works.
- Len Penzo is giving $100 to a passionate reader.
- The Military Wallet asks how long should you keep financial documents?
- Joe Taxpayer has written a post on Intuit’s TurboTax website.
Mainstream media stories
- The rich and the rest – The Economist
- Drop in UK consumer confidence ‘astonishing’ – BBC
- Britain: not booming anymore, as Martin Wolf discusses – FT
- Risky/structured products face FSA ban [at last!] – FT
- Portfolios seek inflation protection – FT
- China could price itself out of all sorts of markets – FT
- Going on past history, the bull market hasn’t run out of steam – FT
- New inflation-linked savings bond from Birmingham Midshires – Telegraph
- EU sex ruling could increase the cost of car insurance – Telegraph
- Big companies back in the stock market driving seat – Telegraph
- Are mortgage costs about to rocket? – The Independent
- Tapping into frontier markets – The Independent
- Does Internet group buying deliver bargains? – The Guardian
- National Trust to step in to save English woodlands – The Guardian
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