Not much surprises me, but one thing that continually does is the blasé attitude of UK citizens to providing enough to live on when they stop working.  

We can only hope that if interest rates rise, as now expected this year, those
who chose buy-to-let as their only form of retirement planning will be able to keep hold of their properties should rental income drop consistently below the rate they have to shell out to their lender each month.  

Don’t sit on your hands
At least the buy-to-letters made a decision, though.  Research recently published by JPMorgan claims people are willing to spend more time choosing a car than deciding how to invest for their financial security. Moreover, once an investment has been made, 29 per cent of consumers say they wouldn’t review it.

Choosing not to review your pension funds and investments could be truly costly in the long run and is, quite frankly, nonsensical. According to JPMorgan’s figures, almost two-thirds of the UK working population are set to have a pension income of less than £2,500 a year above the basic cost of living. That’s two-thirds of the population with less than £50 a week to spend after basic living costs.

More worryingly, the research indicates that individuals continue to overestimate massively how much income they are likely to receive in retirement based on their own current provision. A quarter of people expect to achieve a pension equal to 40 to 50
per cent of final salary, but JPMorgan’s research suggests that only five per cent of
the population will achieve a pension of this size at current contribution rates.

Making the right moves
The pension industry has not exactly covered itself in glory over the years, but cutting your nose off to spite your face by failing to invest in one at all will ultimately only hurt the individual.  Notice that I use the word ‘invest’. The tendency during volatile times such as these is to reduce risk when making investment decisions and run to cash, but cash is not a good long-term investment, which – definitively – is what a pension is.

Taking too little risk can, strangely, be a risky strategy, and for individuals who are relying on their savings for their future financial security it could be storing up trouble. In short, we are generally a nation of savers, but not a nation of investors.   

Investing in a pension can be made to seem over-complicated. It is really quite simple. All you are trying to do is to create as big a fund as possible for when you need it, within your risk parameters.  

Take control
The main villain is lethargy. Taking control of your own pension fund by choosing where, and through whom, your future is invested is very simple.

By swapping the Mundane Life Managed Fund for a basket of funds such as the BlackRock UK Absolute Alpha, Eclectica Agriculture, Investec Global Energy and the ETFS Grains or Precious Metals, returns have gone from static/negative to quite exciting over the past couple of years or so. All we hear is doom and gloom, but there are plenty of 20 per cent plus stories out there.