Spence & Partners latest blog for Pension Funds Online –
There was a welcome intervention into the murky world of pensions last week, from a source that will be a surprise to many.
It could be that he’s about to reach age 65 and so is worried about his retirement income, or that he’s concerned about being whacked by the bedroom-tax on Clarence House, or that he’s now a grandpa. But whatever the motivation, Prince Charles spoke out – demonstrating his knowledge and understanding of some of our current pensions problems.
On the same day teachers in England and Wales were staging another strike in protest at proposed changes to their contracts, including their pension arrangements.
The apparent contrast in attitudes was, to me, striking. The often-maligned, out of touch Royal was talking much sense about the predicament in which the pensions industry finds itself, calling for some long-term thinking and for some reality checks on the challenges that face his mum’s millions of subjects. However, a reported £3.9m hole in the Duchy of Cornwall accounts may also have grabbed his attention.
On the other hand, our schoolteachers were up in arms. There is talk of average-earnings pension schemes replacing final-salary schemes and an increase in contribution rates. Although it’s understandable that people, including teachers, are concerned about any diminution of their eventual pension, it’s sometimes useful to look at the bigger picture. The vast majority of private sector workers would gladly accept the new pension conditions being proposed for teachers and the prospect of accruing any kind of salary-related pension is now a distant dream for most private sector workers.
It’s slightly worrying that Prince Charles appears to have a greater understanding of modern-day pensions than our teachers and their Unions do.