One man’s pension is a society’s poison

I had what you might call an attack of Retirement Rage this morning. I was talking to the folks who manage my rapidly dwindling ‘wealth’, and about halfway through the conversation it dawned on me just how much my income will drop over the next four years. As in, about 35%.

In the twelve years since I retired, the money we have to spend has fallen by closer to 60%. There are various (mainly, outrageous) reasons why this has occurred, and the only thing I can feel proud about is that none of them were down to personal incompetence. In summary, they read like this:

1. Mis-sold a Scottish Widows Income Bond. Loss: 25%. Compensation: nil.

2. First set of pension investors asleep at the wheel. Loss: 20%.

3. Falling annuity rates over the period. Loss: 12%.

4. Government (DSS) caps over the period on how much I can draw down off the pot. Loss: 8%

5. Zero interest rates. Loss: 20%.

6. Bearish aproach of wealth managers to stock market values. Loss: 18%.

The last of these I feel no anger about at all…towards my wealth managers. They gave an honest and shrewd assessment of where stock values should’ve gone on a level playing field. They just underestimated the lies, money-printing, stupidity, greed and general can-kicking of central bankers, private bankers and oh I can’t bothered – you know who I mean by now.

The other stuff is where the Retirement Rage comes in. (And a host of macro learnings – of which more in a minute).

Scottish Widows is a subsidiary of Lloyds Bank…that fine organisation ‘run’ at the time by Eric Daniels, he of the £15M leaving bonus. You would be amazed at how difficult it is to prove that somebody just robbed you blind. Suffice to say that Lardarse Daniels is, as they used to say in Dad’s Army, “on ze list”.

The first lot of pension managers were called Partridge Muir & Warren, and I’m very happy to risk litigation by telling you that they were a bunch of complete  tossers. Again, the only ‘compensation’ here was the joy of firing them.

As to falling annuity rates, what can I say? Buy an annuity, and the sum is guaranteed…but you can’t will it on. Somehow, leaving a younger wife potentially destitute struck me as on the selfish side of neutral. But on the drawdown basis I now have, the pot is worth 42% of what it was twelve years ago. (Some additional bitterness can be added here by the fact that 50% of the original pension pot went to a first wife as the price of infidelity….to me, not mine to her).

Government drawdown caps on a pension I have privately funded entirely through my own sweat will always represent to me an injustice of Kafkaesque proportions: because our Executive branch have screwed up the nation’s finances and allowed Whitehall pinstripes to enrich themselves to the tune of £1.3 trillion, they give themselves the right to poke their nose into how much of my pension pot I spend.

And last but not least, Zirp. What a scam this has been. “We had to cut interest rates because….” is a feeble rationale which, from 2008 onwards, has seemed to me an excuse-joke that always tails off long before the punch line. Zero interest rates were brought in solely to help braindead banks rebuild their balance sheets. The main contributors to this exercise have been Baby Boomers like me: over 22% of the population being leveraged (aka turned upside down) to save the worthless rhino-hides of roughly 0.035% of the population.

Set against this all this negadividy, what are we lookin’ at here goin’ fuwurrd?

Well, my personal decision to invest in gold two years ago doubled the sum invested. Without that now to help subsidise our income, we would be rather too adjacent to Skid Row for comfort. In ten months time, I get the State Pension of £130 a month….fixed and thus defenceless against hyperinflation, thanks to George ‘Togetherness’ Osborne. And I’m afraid that, given these further straitened circumstances, I am going to have to monetise The Slog in one form or another – if only to at least recoup the weekly cost of talking to Madrid, Singapore, Frankfurt, Washington, Zurich, New York and Paris.

Are there macro learnings from all this? I’ll say.

First, the entire eurozone austerity strategy lionised by the IMF and Berlin is so utterly ridiculous, only a bunch of obese clowns living on red carpets and overly generous EU expenses/pensions/salaries could ever imagine otherwise. I am not a Greek being fleeced to within an inch of my existence, but boy am I unlikely to be doing much high-ticket consuming over the next few years. It can only lead down and further down into a vortex of violent economic depression.

Second, I’m a middle-class, older and generally conformist bloke feeling intense rage about injustice I have no power whatsoever to oppose. We didn’t even get to the part about derivatives and obligations yet. Why on earth does anyone in their right mind think that  surviving that is going to be a breeze for our traditions and political structures?

Third, when nobody can sell cars, fridges, hifi, hitech, and even garden ornaments any more, where will all those made unemployed by that go, what will they do, and how will they react? One thing they’ll do is chuck in their house keys, and leave a housing market beyond flat out and heading towards

And last but not least – at the risk of patronising people – I have some hefty assets and no debts. Forgetting the Greeks for a minute, in a narrow British context I am up there with the fortunate 7%.

What about the other 93%? WTF are they going to do?

If you went to St Pauls, Eton, Oxbridge and thence into politics, well – more power to your elbow. But that’s not much of a cv with which to arm oneself for the coming mayhem.

I go on quite a lot here about the need for radical realism as a new force in British politics. My fear – and my anger – at the minute are built around the fact that folks like me are getting increasingly radical, but the Political Class is becoming ever more unreal.