Many workers retiring after 2020 are told to expect a “bleak old age”. Up to 14 million workers will retire with pensions far smaller than those enjoyed by their parents, a report warns today. Almost three quarters of private sector staff will be unable to “adequately exist” when they retire due to a low level of savings and the complex, costly and inefficient pensions system. Workers in defined-contribution pensions were being left to carry all the risk of funding their retirement and were often ‘at the mercy’ of stock markets. It suggests that there is a lack of trust in the system and says that private company pensions are often opaque and confusing for workers. Lord McFall said: ‘Sadly, millions of people are being left to navigate a pensions minefield that would puzzle Einstein." McFall added: ‘There’s no point in bringing people into pensions that will erode their savings through high fees..."
The report warns that those who retire in the coming decades will do so on significantly reduced pensions. It points out that the value of pensions has been hit by the global recession, low investment returns, increases in household debt, drops in real incomes and low interest rates.
More than two million people approaching retirement are not financially prepared retirement specialist MGM Advantage found. Its report also revealed that over half of UK adults are not ready to retire. MGM Advantage believes people are still suffering from the impact of the recession with only three per cent of working adults “totally prepared” for retirement, significantly less than 2008’s nine per cent when the financial crisis began.
Craig Fazzini-Jones, of MGM Advantage, warned: “This is further evidence that a growing number are sleepwalking into retirement.”
But even more importantly, employers are walking away, leaving workers without the desired pension protection for their more vulnerable twilight years. The advances from our labour – including an increased life span – are being clawed back by capital to its advantage, pushing the burden from the capitalists and onto the workers. For workers, the struggle is not only over the size of pensions, but over identity, security and, ultimately, working conditions too. The pensions problem within capitalism once more proves the market economy's incapacity to go beyond the limits of the wages system, and adequately provide for the needs of those who have worked all their lives. As the capitalist class endeavours to encourage us to share their interests, we find our lives opened up to the chaos and insanity of the stock market casino. But the market system cannot provide any security for us in the long run, which is why we need to turn the class struggle on the economic front into a fight for a society based upon the direct satisfaction of needs. The real question facing workers is whether they should continue to support the capitalist society. If it were to go, how we are going to survive in old age wouldn’t be such a perpetual worry, since in socialism every member of society, including the old, would have free access to what they needed to live and enjoy life. In socialism everyone would have the opportunity to contribute to the community for as long as they could. Their contributions would not have to be strictly rationed nor controlled and all would be able to share in the common produce.