Middle-aged face long pension trudge

Work till you drop. That might be the future for many currently middle-aged people, some of whom may not retire until their eighties. Saga polled almost 11,000 men and women in their fifties about their future pension prospects. And the survey findings claim many current pensioners and workers are having to fall back on savings each month to cope with basics like utility bills and fuel costs.

Goodbye to a golden age

Some pensioners polled by Saga certainly appear to be living through the tail-end of a gold pension era, with the average person polled retiring at the age of 59 and seven months. Yet 25% of the most well-off pensioners interviewed said they were also dipping into savings to cope with inflation and general living costs.

A sizeable tranche interviewed in their seventies said they were still working, and did not expect to retire until they in their mid eighties. Which increasingly looks like the reality for many people currently middle aged, given inflation and savings pressures.

Massive fees

Much of the debate about UK pensions has focused on state pensions. Just as concerning are the huge fees UK investment managers siphon off from small retail investors in charges, month in, month out. For example, someone who saved £100 a month for 40 years in a private pension is likely to pay more than £110,000 in charges in total.

These fees are a national scandal given how little many pension funds cost to run, thanks to advanced computer automation. Many 'low-cost' funds are essentially tracker funds, meaning they follow the index of the stock market, rather than being actively managed, thereby keeping costs far lower.

The problem for the government is that, were they to force asset management companies to give a clearer idea on total fees, it could rock long-term investor confidence, thereby undermining the government's own policy of encouraging people to make much greater private pension provision.

Read Full Story