How hard is it to build a £1m retirement nest egg? Find out below…
The Daily Mail and an investment manager from Brewin Dolphin have got the ONS to dig up information that suggests that someone in the UK has a pension pot of £11m and that 46,000 of us have pots worth more than £1m.
The article suggests that auto-enrolment is a route to wealth and concludes with the news that the Government continues to let a private members bill enable the widening of auto-enrolment through the 2017 reforms.
It’s the kind of article that sends me back in time to the heady eighties when I thought that financial services really would unlock a better life. I was sold a sausage on this kind of sizzle and wasted much of my best years selling such nonsense to myself and others.
Here is aspiration on a grand scale
‘Someone entering the workforce today aged 18 and paying £389 a month could reasonably expect to retire with a £1million pot aged 68 assuming annualised returns of 5 per cent after fees.’
Well it’s not quite Del Boy’s fantasy, but it’s the next best thing. That’s because
the key to getting to these lofty sums could be employer contributions and auto-enrolment into pension plans.
Building a pension pot is “magic” and we’re left with the conclusion that
‘There’s no question that the magic of compounding mixed with some sound tax advice makes for an extremely potent cocktail.’
This kind of get rich slow stuff was very common when I started out selling whole of life plans as pensions. “Life Assurance Premium Relief”, “huge capital reservoirs”, “money makes money”, these were all part of the salesman’s toolkit.
Selling the dream of financial self-sufficiency in later life, through a £25pm savings plan started that very day earned me £100 a sale. Those who ran Lloyds and Target Life, who I represented , earned considerably more.
But there are a generation of people my age who have moved on – fed up with this nonsense!
Sadly , it seems there is a generation coming up behind, who haven’t learned our lessons and are still considering that getting quick slow, is as easy as AE.
Providing pensions is a tough business and it isn’t made easier by this kind of tosh!