Steps To Take To Finance Our Own Retirement Due To The Current Pension Deficit
It would appear that in just over a hundred years we have come full circle with regards to deficits in our state pension
The Old Age Pensions Act was passed in August 1908 and the first payments were made on the 1st January 1909 when the maximum payment was five shillings for a single man or woman. Payment was only eligible if you earned an income of less than twelve shillings a week and the pension could even be reduced if a person had too much furniture.
The pension was denied altogether if a person had been to prison in the previous ten years, was habitually drunk, had not worked when able to or was generally regarded as a bad character.
Whilst this pension did provide for more people it was still not enough to live on. In addition to this The Friendly Societies that provided collective saving schemes aimed at the more prosperous and the workhouses that were aimed at the totally destitute were both bucking under the strain of people beginning to live longer. People were living beyond the point where they were physically capable of working which brought about the new phenomenon called retirement.
In 1928 the scheme was revamped to target all workers and the retirement age was reduced to 65. Payments by this time were dependant on workers also paying in. In 1948, along with the National Health Service, came what is now the modern state pension available to everyone and included employers contributing through national insurance contributions.
Even though current day pension payments are now more generous than before and the pension age for women has now lowered to 60 we are now facing similar difficulties to those faced a hundred years ago. Again life expectancy has gone up. Anyone reaching pension age are now expected to live another twenty five years compared to just nine more years back in 1908. Due to this the retirement age from 2048 will be increased to 68 which is only two years younger than back in 1908!
This is a dismal prospect for today's generation. There is not even any comfort for those who have been fortunate enough to contribute to occupational or private pensions to supplement their state pensions as these schemes have performed badly due to the current financial crisis and many are actually in deficit. Due to this there is unlikely to be the opportunity to take early retirement as in previous years hence most people will actually need to work to a minimum of 68 years old.
This is indeed a bleak prospect especially as so many people are already unhappy in their work. The prospect of having to work until 68 is indeed a great burden to many of us.
However the solution is not to wallow in self pity but to take control of the situation ourselves, we need to find a way to create a secure financial future for ourselves. Instead of relying on the traditional way to finance our retirement namely a pension we need to look into other options instead.
With house prices still relatively low and mortgage interest payments also low, it could be a good investment opportunity to buy property that can be rented out initially to fund the mortgage payment and then upon retirement it could be sold to create a lump sum or continue to be rented out to create a monthly income.
Also with interest rates being so low at the moment and the stocks and shares markets being so unpredictable it is beneficial to look into other investment opportunities. There are currently many different investment opportunities available that can offer long term returns, Examples of such opportunities are investing in gold and old coins. There are several businesses that offer advice on various investment opportunities that may be worth looking into.
Finally if the prospect of having to continue working until your 68 is your current job is proving daunting why not consider changing your career and becoming your own boss? By setting up your own business you will take control of your own destiny and will be able to create more personal and financial freedom. You will ultimately dictate your own working hours and will benefit yourself from your hard work. The harder you work the more you can create wealth and a secure future for yourself. There are many different business opportunities available and many offer the opportunity to work from home hence the ability to work flexible hours based on your own needs. There are also internet based opportunities which will often offer one to one coaching on how to start your own business and how to create wealth by investing in to the right opportunities. The advantage of internet based businesses is that they have low set up costs as many of us already have the necessary items to start a business namely a computer, a desk and a telephone.
The other advantage of starting your own business is that you do not need to terminate working for your employer straight away. You could initially set up your business in your spare time to run alongside your current job while you gauge how successful you can be. When you are starting to achieve your success you can then leave your current job and commit to your business full time.
By running your own business you will be able to reap the rewards for yourself. The harder you work the more wealth you will create. If you then continue to work hard and invest your wealth wisely you will not only provide financial security for now but also for your retirement. You will also be taking the necessary steps to ensure that you will be able to take early retirement and not have to work until your 68.
About the Author
My name is Roy Derrick. I have been self employed for over 20 years and developed numerous companies. I now work full time from home operating an Online Home Based Company that enables me to share with others how to become successful and create prosperity and a lifestyle to be proud of. My advice is free. Find out how. Visit: www.perfectprosperity.com