Do you want the government to force you to save?

This is madness but it will create jobs for those managing funds and who measure their performances relatively against indexes (and who get paid good salary even if they loss less money then the benchmark).

The problem with so many people not putting a penny by for their old age is that the tax payer then is forced to support them by way of the "Benefit" system all Western countries now have in place. Sooner or later young people will rebel, one way or another, against this unjust burden. A compulsory pension contribution should be introduced regardless of how it might affect current standards of living.

All contributions should be 50/50% employer/ employee and appling to all taxpayer backed schemes as well.

The main problem is not people who won't save. It's those who can't save. Which is worsened by means testing that ensures that those of us who have saved see all our savings lost during periods of unemployment or sickness.

Being made redundant at an age when no employer wants to know, I am currently spending my redundancy pay and waiting until either my savings fall below £16,000 or I reach 65 and can get the old age pension.

I have lived frugally and saved whatever I could since leaving school at 16. I ponder the merits of taking my life savings on a trip to the casino or the race track. Or buying lottery tickets so that at least some of my money goes to a worthy cause.

Average weekly earnings across the whole economy are £473. I wholesaling, retailing hotels and restaurants that drop to £303. In finance and business services, it is £611. These are mean averages. Young people, trainees and part-timers earn a lot less. Making these people save is making them starve, freeze or go naked.

In Q4 2011, the lowest decile (bottom ten per cent) of workers were paid £6 an hour. That is £240 for a 40 hour week. Try saving after paying for housing, heating, food, clothing, travel to work, Community Charge and the rest of the inescapables. The top decile were paid an average £20 an hour.

If the Tories want the poor to save, they should try skinning a few of the fat cats. Redistribution of income and wealth is the only way to drastically reduce poverty.

PS for those few who care or even understand what facts and logic are, the data is here:

http://www.ons.gov.uk/ons/publications/re-reference-tables.html?edition=tcm%3A77-222482

Considering what has happened recently to the funds of those who saved for a pension -

'Take from dividensd'

Lower GAD so the take from a SIPP is not much more than you could get in an instant access saving account

Tax on whatever is left of the SIPP when you die upped from 35% to 55%

So - the government is 'acquiring' the income that would help your fund keep up with inflation, limiting what you can take as a pension to the interest - so the capital does not reduce, and then taking over 50% of that capital when you die.

The only reason I can see to 'save' in a 'pension' fund is if your employer will pay into it for you.

If you want to have an 'income' when you stop getting a salary (PAYE liable income) then save outside of a pension fund, and have control of your savings as well as being able to take the capital and spend it without paying 'income' tax when you retire - you will already have payed that when you saved it.

and what will they force the self employed to do?

The only reason I had a pension pot was because when I was in partnership a scheme was set up and and when I branched on my own, again, I coninued what had been started and eventually used the whole life element, cashing in, to pay off most of my mortgage.

And then along came Gordon Brown (and his witless side kick Balls and robbed me of half of my potential pot.

Little wonder that the public are cynical, and the Tories followed the aforementioned and did not live up to their promises and continue the raid on those now retired by attacking them further, at a time when interest pays monkey food for cash pots, froze their RPI index exemptions (thereby increasing the tax take) at a time when pensioners inflation (combined with the monkey food on savings) is higher, much higher, than the working person.

I agree absolutely with Jeremy Bosk that a "redistribution of income and wealth is the only way to drastically reduce poverty". The majority of the wealth is held by a few percent at the top. Until these few resolve their personal insecurities, which results in them needing wealth as security (to negate their insecurities), the majority will suffer!

Well said James Button.

The SIPP thing is a classic case of the money men having their fingers up the bottoms for the government.

The whole thing is bent.

Needless to say my FSA didnt point out these minor details

If my SIPP grows at 6% year, (which it should do) I cant draw it down faster than it grows.

Then the Robbing Bast'ards tax what's left at 55%

Saving is for the birds.

Please advise when the revolt starts, I want to join in.

Does anyoen know what a FULL redistribution of wealth would mean in cash terms for the 'average person'? Even jsut using cash what would be the resulting average income?

I'm not prre-judging - just an honest question.

@Dave B,

Total UK wealth is around 9T, with about 4T of those tied up in bricks and mortar (and undistributed).

Only about 1T of those are in financial wealth and 1T / 65m = £15.3k each.

Since yesterday stock market crash. the sum will be a little bit less, of course.

Link to article at independent: http://tinyurl.com/cdalys5

Hang on a minute. I thought there was already a compulsory pension savings system it's called National Insurance!

@Steven22 ....it's not madness . Too many people have gotten into the 'live for today' habit . So many times I have heard people, who have arrived at retirement age, bemoaning that they didn't make enough provision while they could .

And Dennis .....Of course there is National Insurance if you are happy to try to live on the basic rate.

So I think mandatory pension savings is sensible and no opt out !

But it would have to be closely monitored as there are plenty of financial sharks out there just cruising, ready for the kill .

derek, I take the point however I was referring to the fact that SERPS/SP2 was originally supposed to be a bit like a final salary scheme but suffered from the major defect that politicians are running it. I wonder who I trust least, politicians or IFA's?

@derek - Saving and investing is not madness, it is the right thing.

'Save/Invest' into a pension fund in today's climate is altogether another story.

What people need is proper financial education, so they can do the right thing, as opposed to force saving into a semi-blackhole.

@Steven22 and Dennis ....agree with both of you eg 'save/invest in today's climate is altogether another story' and 'a major defect is if politicians run it' . BUT .... Properly run at minimal 'controlled' commission by a raft of top drawer professionals under an umbrella scheme or schemes, and in a spread of different investments (bonds , gold, cash, shares), would surely serve people better than ad hoc arrangements.

I also agree that financial education would be very beneficial , but realistically I think many people, with the standard of basic arithmetic at an all time low, will simply not get their minds around it .

@Derek,

"a raft of top drawer professionals"?

Would you be so kind to enlighten me who these people are?

Perhaps we should require the asset manager to coinvest 90% of their net worth in the same fund. 99% of Warren's net worth is with Berkshire...

My friends in the banks don't even want/dare to invest their own money in the stock market themselves (but happy to tell other's where to invest theirs).

I would be happier for the government to force people to pass a basic financial literacy test before they are allow to get a job/open a bank account than to force people to save money into a pension fund runs by top drawer 'professionals' even though the new fund will sure to create quite a few jobs.

The financial services industry is motivated by greed, the politicians by greed and megalomania, the vast majority of the Great British public is governed by fear born of ignorance and distrust.

Some of the ignorance is down to deliberate obfuscation by the financial services industry, some due to government collusion in hiding the facts, some due to government refusal to improve the education system. And some is due to laziness and stupidity from the public. The distrust is rational if sometimes excessive.

All of the above are moral failings. I am not about to recommend a good dose of old fashioned religion because a) I am an atheist and b) religion and homicidal mania go together like mad dogs and rabies.

It is possible to have a moral outlook on life without religion. There are rational grounds for behaving decently above and beyond fear of hell in the afterlife or hell in an earthly prison. Teaching children reading and arithmetic is important. Teaching them why we all benefit from decent behaviour matters no less. I would go so far as to say that teaching decent behaviour through reason as well as example will improve results in the more traditional school subjects.

Plato's Socratic dialogues are actually a good read.

Lets not glorfy the 'vast majority' who's claim to such praise is that most dont have the same opportunity to impose their 'greed' on others.

Call it greed or self actualisation or whatever, it might not be what we want but its a major driver for us all.

The major sin for most is apathy and the desire for someone else to do the 'hard stuff' - usually so they can blame them if it goes wrong.

What used to be a welfare safety net is now a big comfort blanket for too many.

Saving in a pension is a mugs game. Unfortunately I did not know this 40 years ago. Successive governments have had their fingers in the till and the finance sector has become more rapacious. When (if) you retire you get hit with having to invest in a rip off annuity unless you have a massive pot when you can get a bit more until you pop your clogs when the government or the finance sector get what is left. Not much of an investment. My advice is to become an MP or a public servant and then those int he private sector can pay for a large part of your pension.

@Whatsisname .....yes and do you remember the time when our anti Europe politicians were warning that our pensions wouldn't be safe if we joined the euro community, because the Eurocrats wanted to get their sticky fingers on our then huge pension surplus. So having stayed out, what happens .....Brown grabs a huge chunk.

Daylight robbery ....and little was said by us or opposition politicians at the time. If it were France the entire country would have come out on strike.