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Comment by dx034 | Hacker News Reader

In addition to that they name pension funds as #1 source of savings. So they really want people to stop saving for their pensions? I doubt the author of the article wants to live off £150/weekk state pension..

If you want to lower the savings rate you have to introduce a state pension system like Germany where (most of the) pension is paid by current workers. Doesn't work well with the ageing population but means that all money is directly distributed.

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> So they really want people to stop saving for their pensions?

I would stop immediately if I could. I am, however, required by law to save for a pension I will never receive.

The retirement age has already been raised to 67 where I live and is now linked to life expectancy. The second someone finds a cure for old age my retirement will be cancelled. Even if they don't, by the time I'm 67 the pension age will be >70.

As an American in their late 20s I don't know anybody who thinks they'll see a dime out of social security. We know we're paying into it to keep current retirees alive and we know that just won't happen for us.

This is not even social security. This is a private pension. Theoretically, the money is invested and you'll make a nice profit on it. In practice, the only one who's making money off it are the insurance companies.

My pension fund is actually worth less than the amount I paid into it, because all the intermediaries want a cut for their 'services' (whatever those may be). It's like being legally required to flush money down the drain.

I know the difference between pensions and social security.

I also know that some of the commenters in this thread are talking about pensions without distinguishing between public and private pensions.

I also know that there is an enormous amount of capital in the form of public pensions and that public pensions are often invested with relatively few restrictions compared to private pensions. (At least in the US?)

Assuming you're talking about a social insurance plan like Social Security, that's not saving for a pension and never was. It is insurance against getting too old to work productively, which is perhaps a concept that is becoming more and more quaint as technology and medicine both improve.

(Technology means that fewer and fewer people can "work productively" regardless of age, medicine means "too old to work" becomes older and older.)

> Assuming you're talking about a social insurance plan like Social Security

Incorrect assumption.

Then you're really being cheated, if you're "saving for a pension you will never receive." What country/company is this?

Of course I'm being cheated, isn't that the entire purpose of financial institutions ?

They will cheat you off of interest, so in that sense, yes, but "a pension you will never receive" is outright theft if true. I don't know why you would believe that your pension would not be paid out at all. It makes no sense for any party involved; it's much better for all involved for you to have that money to spend it in the economy again.

Financial institutions are private businesses. No one forces you to have a contract with them. Current accounts are very competitive in most countries (i.e. loss making for the bank), all other products are voluntary.

Since you refer to 67, I guess you were referring to Germany or Netherlands and there it is a social insurance. You don't save for your pension. You provide the pension of current pensioners (via taxes or contributions) and trust that future workers will provide your pension.

In all countries where the main part of a pension comes from saving (e.g. UK, US), you will directly receive what you saved (plus interest, minus taxes). A system such as what you describe doesn't exist anywhere as far as I can tell.

Found the Greek! I managed to get removed from the pension fund, because, like you, I don't think I'll see a penny. I save privately now.

I'm dutch. We have to pay into a pension fund, your employer decides which and what plan.

Oh, interesting, the pension limit being raised was the same as for us. We have to pay into a state pension fund, though, which is already bankrupt.

State pension systems tie your financial security directly to government finances, and also to election results decades in the future. They are essentially a form of gambling.

No rational person relies upon them, and rational people are precisely the kinds of people to have savings!

Private pensions also tie you directly to private finances, and market results decades in the future. You're also gambling that the money won't be stolen by the institutions or suffer a collapse in value - banking on a TBTF bailout in the future.

(Overstated slightly, but there is a role for both private and state pensions in a sensible system!)

With a state pension, a government can exclude people from reaping what they have put in, retroactively. I don't expect to be able to claim a UK state pension -- they can just keep putting up the minimum age from 65, to 66 to 70 to 75 to 80... until the scheme is removed entirely.

Whereas with private pensions the values go up and down but are unlikely to hit 0 and stay there -- unless it's really mismanaged!

> I don't expect to be able to claim a UK state pension -- they can just keep putting up the minimum age from 65, to 66 to 70 to 75 to 80

What would be the point of doing this? Whose interest does it serve? It does not serve the banks' interest. It does not serve the politicians' interest. It does not serve your interest.

It brings the deficit down, and as long as it's only done to a narrow group of people at a time and has the support of the newspapers it looks good for the government's economic competence.

Private pension collapses: "stakeholder" ones seem a bit safer, but company ones keep getting into trouble e.g. http://uk.businessinsider.com/sir-philip-green-bhs-pension-f...

German here: the state pension system has become a joke. None of my friends below 35 actually believe they can rely on it for something that comes close to a livable retirement, and even people already on the state pension system feel cheated for various reasons. The only people with okay pensions are politicians and civil servants, who fall under a completely different system.

The Tax-Burden on the other hand has been growing and growing, leading to a lot of braindrain and tax evasion.

If you're saving for a pension it normally would be invested. So it's not really savings as well.

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