Top world economist admits to being baffled by pensions
Written by Carl Turner on July 31, 2016.
Do you ever feel perplexed by pensions? Are you looking for enlightenment over what you will be entitled to and when? Well you’re in good company. None other than the Chief Economist of the Bank of England, Andy Haldane, a man voted one of the most influential people in the world by Time magazine in 2014, has admitted during a speech at a dinner that he did not understand the UK pensions system.
Haldane said (somewhat modestly considering his position!) ‘I consider myself moderately financially literate. Yet I confess to not being able to make the remotest sense of pensions’! While that might give a degree of comfort to lesser mortals struggling to come to terms with their pension requirements, it doesn’t offer much help in terms of reaching the goal of financial security when you retire.
While in recent years pensions freedoms have increased, giving people more options as to how and when to drawdown their pensions, most workers suffer from a severe lack of knowledge of even the most basic information. For example, a ‘Which?’ survey revealed that almost half of 50-65 year olds have no idea what their state pension entitlement will be.
Haldane believes the solution lies in education. He advocates the teaching of maths in a way which is more relevant to everyday life, the inclusion of basic financial concepts, such as budgeting, interest payments and savings, in the school curriculum and the introduction of courses for adults to bolster their financial knowledge.
I wholeheartedly agree with these recommendations but I would also add that everyone should review their pension arrangements every year in order to ascertain whether they are on track for their retirement goals and make any adjustments necessary. If, like Andy Haldane, this is a task that bemuses you, help is at hand! A professional financial adviser which is UK pensions qualified can bring the expertise and knowledge you lack to the table and give you the peace of mind in knowing that your pension planning is in the best shape possible.