Immigrant pension taboos

I live in  West London – Brentford and Eton (lower Slough). If I want to eat, a curry is the natural choice, if I buy groceries, it’s most likely from an Asian grocer. My Grandfather was the Methodist minister for Hounslow, his son, my father, lived in Brentford sixty years ago. When he came to Brentford recently , he was amazed at what he called “Little India”.

There are many parts of Britain where first and second generation immigrants form the majority of the population. Put aside Kensington (Middle Eastern potentates) and South West London (Australia and South Africa). My thinking is about immigration from Africa, the Far East , South America, Eastern Europe and the Caribbean, immigration of people with radically different backgrounds and opportunities than myself.

I have only my own and anecdotal evidence for this assertion (I have seen no culture specific research). Nevertheless, I am sure that many immigrant communities, Hindi, Sikh, the various Chinese communities and many Moslem groups view our pension system as  alien and incomprehensible.

It’s often been observed that the family support mechanism in immigrant communities are stronger and that the elderly are able to rely on younger generations , emotionally, physically and financially. This is certainly true today.

But according to a Sikh couple I was talking with yesterday, the pace of integration of her family into “Western ways”, meant that they were not expecting their children to be around for them, many of their friends felt the same.

They, like many Asian families are investing heavily in property, especially buy to let. They rightly point out that these tangible assets (houses and flats) produce the inflation linked income streams (as bankers call them)- pensions as they call them, that they’ll need to support themselves in their later years.

The only thing they wanted to talk to me about, was tax. Their accountant was talking to them about using pensions as “tax wrappers” to shield themselves against capital gains tax.

I asked them why they hadn’t done anything more than talk. they replied that they did not consider realising gains on the houses they were buying. They were also deeply distrustful of the pensions system which they hinted was run by and for others than them.

The energy with which we discussed these matters suggested that “self-sufficiency” from State and family support was high up their agenda. Second generation immigrants have not suffered the same level of dislocation as their parents but nor do they have the confidence in the UK infrastructure that I have.

I’ve read very little from the DWP, NEST or the various pension think-tanks on how the new immigrant communities see their State and private pension provision. Perhaps “the establishment” believe that this is not an issue.

I worry that (as Spanish Banks know only too well), an over reliance on property markets is a risky strategy. I am concerned that many Asian communities have no engagement with private pensions and I’m surprised that this is not a matter anyone seems to want to discuss

About henry tapper

Founder of the Pension PlayPen,, partner of Stella, father of Olly . I am the Pension Plowman
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