Pensions

Periodically, I find myself musing on the whole pension thing. The thing is, we're forever being told that the vast majority of people aren't saving enough for their retirements. Given current levels of debt in this country, that is hardly surprising. However, even people who aren't in debt probably aren't saving enough.

But there's a very good reason why: the whole system is too damn complicated for words.

In theory, pension schemes are straight-forward: each month a percentage of your pay goes into the scheme, the agents use that money to invest for your future, and when you retire it is turned into a magical pot of money on which you live the rest of your life.

However, no-one has ever indicated to me what sort of percentage represents a 'right' value. Or even a sensible value. So, I put a number on a form that means very little to me, try not to worry about it, and in forty years I will get back what? Is the number big enough? Too much? Just right?

So, that's the first complexity. Then there's the issue of multiple pensions. These days, no-one stays in the same job for their entire careers. Consequently, the sensible way of working (non-state) pensions is to have an employee take out an independent pension when they start their first job, and then have each employer pay money into that fund as their career progresses. Since employers already have the ability to pay money to bank accounts direct, why not pensions?

But, of course, it doesn't work like that. I have had four employers. One of these had no pension arrangements at all (rather poor, that). My first employer set me up with an independent scheme, in the exact manner I described above. All nice and sensible. But my previous employer and my current employer each have their own schemes, and wouldn't or couldn't transfer the payments to another schene. So, I'm stuck with three pensions, one of which has a pointlessly negligible amount paid in, a third that is slowly draining of all value, and a third that will be good for a while, but will suffer a great deal if and when I leave my current job. (Which, one way or another, I will do eventually.)

Incidentally, when I joined my second employer, I decided to immediately start paying money into my original pension again (my second company was the one with no scheme). So, I contacted my provider, and had them send out the appropriate form. I never returned it - the form was impossibly complicated, such that I could not complete it. Which is, frankly, ridiculous - all I wanted to do was take X% from my salary and pay it into scheme Y, which should not be a difficult operation.

It should be possible to sort all this out. It probably is possible to sort all this out. But doing so would require employing the services of a financial advisor, which means (a) paying for the priviledge and (b) taking time off work to meet with him, fill in interminable forms, and generally waste time dealing with things that really should just be simple.

My time off work is extremely valuable (conversely, I have no problem whatsoever with paying for financial advice). So this matter drifts...