Thursday October 19 2017|THE TIMES (London), p 4
Retirement timebomb is ticking for millions
by Mark Atherton
More than 15 million Britons are facing a retirement timebomb because they are not saving . . . [and many of those who are saving are using the wrong vehicle for their savings. The first rule is to save from earning, and invest from savings, and not to invest from earnings. The second rule is to save in the form of assets that conserve purchasing power (e.g. gold not paper money).]
A Financial Conduct Authority study . . . found that half of consumers —25.6 million people—were at risk of being financially vulnerable.
This could mean that they have got into debt, have no savings, are poor at managing money, or face financial problems through bereavement, divorce, or ill health.
Among the facts highlighted are that:
The problems start when people are in their early 20s. More than 50 per cent of those aged 18 to 24 are described as potentially vulnerable financially, largely because of a lack of cash and a high level of debt. One in five has no savings while 55 per cent have debts, mostly student loans.
[A part of what you earn should be yours to keep. The self-discipline required to save money will lift you out financial difficulty. If you fail to establish the savings habit, you may never own a home of your own, or have the lifestyle you aspire to have.]
At the other end of the scale, 69 per cent of people over 75 are classified as vulnerable . . .
[Think about it, after a lifetime spent working in one of the most prosperous nations on earth, better than one half of the people have achieved no more financial security than they had in their early 20s.
The debt based financial system created by central banks and unscrupulous governments doesn't work for most people. Unlike gold, the fiat money issued by central banks is designed to lose value year after year. That is a consequence of inflation and inflation targets. Inflation will keep you poor. The pound in your pocket is worth less at the end of the year than at the beginning of the year in terms of its purchasing power. Doesn't that make you a little mad??]
The struggle that today's young adults have to get on to the housing ladder is highlighted by the fact that 48 per cent of 25 to 34-year-olds still rent. Many of those who have a mortgage may face problems when interest rates start to rise, as forecasters expect next month. Eight per cent of all mortgage holders —and 37 percent of those aged 18 to 24 — have a loan that is more than 100 per cent of the value of their property.
[Translation: a downward spiral in property values is headed our way.]
While the study warns that too few people are saving long-term for their retirement, of those who are building up a pension pot through a money purchase scheme, only 12 per cent have more than £100,000 in it. At current rates a £100,000 pot would buy you an annuity of only about £5,000 at age 65.
[If you are having difficulty stretching your paycheque to meet your monthly needs now, how will you survive on much less? Could you really survive on 40 per cent, or less, of your current income?]
Patrick Connolly at Chase de Vere, the financial adviser said: "People who aren't saving enough for retirement face the stark reality of either a lower standard of living in old age or in effect working until they drop."
[Break free from the herd.]