Pensions

Pension woes

A lot of you have written in with your stories of shrinking pension pots.

Andy is typical, He says: "I'm due to retire at the end of next month, so for the past five years my pension pot has been invested in very modest growth areas.

"In January, my pot was worth just over £606k, it's now valued at £505k. Even careful investors plans have been absolutely decimated," he points out.

But Ian Brown says: "A typical medium risk pension default fund that the majority of pension funds are held in, would have grown around 75% in the last 10 years.

"In the last month, it will have lost around 15% .

"Somebody asked why pension are linked to financial markets: there is your answer- If they were not, all pension pots would be a LOT smaller."

Sympathy for the pension savers?

The issue of people's pensions shrinking during the current market turmoil has certainly stirred up Business Live readers.

27-year-old engineer John has no sympathy at all.

"Under no circumstances should the government support pension schemes. Like the financial adviser has said, it is known that the value can go up or down.

"If I have to manage my money. So do they. If they want a pension handout then I want a house discounted to a 1980s rate. That sounds ridiculous, because it is."

Meanwhile Brenda thinks the link between pensions and the stock market should be severed.

"I have wondered for years why something so important as pensions, our funds to live on in the future, are tied into something as volatile as stocks and shares," she says.

"It seems obvious to me that something that says “your investment could fall as well as rise” is not the best place to be encouraged to put money that governs the future quality of our lives.

"This link between pensions and stocks and shares also means that too many people are affected by the movements of markets. Are there really no safer ways?"

That's the eternal question of risk and reward, which is perhaps something to be discussed another day.