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Weekend reading: Pensions podcast

Some great reading from around the web.

For a second time this month,  I’m going to make a Motley Fool podcast [1] 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 [2], 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 [3]) 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

Money Maven roundup

Mainstream media stories

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