If you can’t save £100,000 – don’t get conned by the Government’s new pension savings scam

This government, like all governments, wants to tax us more so it can spend and waste more while the 29,000 (yes you read that correctly – 29,000) people in the political classes (politicians, staff and hangers-on) stuff their pockets with our money. Tax rises are unpopular, but our political masters are good at disguising tax increases.

The latest government trick to get more of our money is to force people into pension savings. For anyone earning less than £25,000, making any pension savings will be a waste of money. They’ll have so little by the time they retire that the only result of having a few thousand pounds saved up will be to deprive them of benefits available to people on the basic state pension. So their savings will save the government money, but be utterly futile for them.

If I understand the situation, the state pension is about £96 a week. But if you don’t have any other income, you can claim at least another £60 a week in benefits. Pensions savings of £100,000 will buy you an inflation-linked annuity of about £3,500 a year (£70 a week). But if you have managed to save £100,000 (the average pensions savings are just £40,000) you’re going to lose about £3,000 a year (£60 a week) in benefits.

However, another 10 million or so people putting a tiny percentage of their meagre earnings into the hands of multimillionaire pension fund managers will make the City spivs who fund the Tories an awful lot richer. After all, 10 million people saving say just £500 a year each will give City spivs £5bn a year. If they siphon off even just 1.5% in fees and dealing costs, that’s £75m in the first year for doing hardly anything. £150m in the second year and a glorious £750m a year in fees by year ten of the government’s great scheme.

So the bottom line is – if you are unlikely to save significantly more than £100,000 in your pension by the time you retire, you should opt out of the Government’s pension scheme/scam. This means that around 70% of people should avoid the new scheme/scam as all they’ll be doing is handing  even more of their money to be wasted and stolen by politicians, bureaucrats and bankers.