Returning to the pension question

A blog or two ago I talked about pension funds and how they cause long-established businesses a huge problem (particularly in the current climate).

Yesterday there were two articles in the Guardian about pensions. One talked about 'what may prove to be media companies' final undoing - pension funds'. And the other was by Max Hastings entitled 'Forget financial advisers: I wish I'd stuffed my cash into the mattress'. Both made interesting reading on both business and personal levels.

The pension fund question will not go away unless the business it belongs to starts doing brilliantly well. Given that most solutions to a cash-flow problem is to get rid of the most expensive overhead - salaries - it is left to fewer and fewer employees to a) create more income for the company and b) feed into the pension fund.

I personally have witnessed more employees fill a hole in the road than create a flagship dictionary. The reason is that the former were council-funded employees, the second belonged to a private company forever nibbling away at the workforce. I doubt the workmen are ever expected to come up with a more creative, productive way of filling in holes and I fear that the dictionary compilers have no energy nor motivation to increase the revenue of the publisher. And usually they are ignored in favour of bringing in some outside (expensive) whizz with no knowledge of the product.

As for Max Hastings' article, I feel slightly reassured that I am not as useless as I thought. I did exactly the same as him and have a derisory private pension. He mentions Margaret Thatcher and her name seems to be cropping up again and again recently. Partly it is because it is 30 years since she was elected PM. But, I think it is also because all the seeds she sowed have grown into thorny plants that are unable to provide economic sustenance.

All the financial empowering was of people who hadn't really a clue what they were up to. They were left in the clutches of personal financial advisers who needed to create their own personal wealth. This was their 9 to 5 job, so you can't really blame them.

First we had the fiasco of the endowment mortgages. Then we had the urge for people to opt out of pensions and set up their own private pensions with very little help and advice. Max Hastings seems like an intelligent man. If he has ended up in mire, what hope for the rest of us.

So was it something in Mrs T's tenure that put us into this mess? Was it a misguided urge to put everything into the hands of the people (council houses, mortgages, pensions) when they probably didn't want it in the first place? Or were not given enough financial education to handle it. More importantly, we were cast to advisers who had their own interests at heart.

Now it looks like 30 years ago one should have gone for the steady job in the public sector. It might have been less well-paid but just think of the pension. A bit like a 30 year hare and tortoise pension race.