Millions of baby boomers now have just a 10-year period in which they can either make or break their retirement plans.Things aren't likely to get better. According to research by The Independent in 2007,
According to new research, seen exclusively by The Sunday Telegraph, only one in four fiftysomethings is financially prepared for retirement and one third have no retirement savings at all.
many have seen their pensions and savings squeezed from all sides: company pension schemes have cut back while the value of the state pension has fallen.
But it is private savings that have been hardest hit: those in this age group have suffered a toxic mix of poor investment returns, rock-bottom interest rates and ever-declining annuity rates, so even those who manage to build a decent pension fund find that it secures a smaller income in retirement. MetLife's survey showed that those in their fifties were on average hoping to retire on an income of £18,100 a year.
Mr Brown's 1997 decision to tax dividends paid into pension funds will have far greater consequences than previously thought.Relentless taxation, inflation, and interest rate manipulation has left pensioners reliant on a wide range of complicated benefits, such as free bus passes and winter fuel allowance. If these people had simply been allowed to keep more of their own hard earned wealth, they would be self sufficient. Instead, they rely on current taxpayers.
The accountants also concluded that the 25-year-old would receive £6,000 less in annual pension payments on retirement, while the 35-year-old would see his pension reduced by £5,000 per year.
Even taking into account future inflation of 2 per cent per year, the reduction in the size of the two pension funds would be £60,000 for the 25-year-old and £57,000 for the 35-year-old.
Prior to 1997, for every £80 of dividends received by a pension fund, a further rebate of £20 would be received by the fund from the Inland Revenue.
When Labour came to power in 1997, pension funds rarely showed a deficit and looked ripe for taxation.
Mr Brown is set to retire on a guaranteed pension of at least £100,000 a year, thanks to the generous final-salary pension scheme enjoyed by MPs.
Gordon Kerr has a written a great article for the Cobden Centre opposing government intervention in the pensions system.
When will our new leaders stop following in the footsteps of the Old Labour belief that the Government can regulate and legislate to fix the economy? Does our Government believe that the best of all worlds is one in which a civil servant interferes in every limb of business?