The other day I received a letter from the Department of Work and Pensions, informing me that I would receive my state pension at the age of 66 years and 8 months.
What to make of this news? Should be I glad that I am still 10 years from being a pensioner or should I worry that there will be no money left in the pension pot by the time my turn comes to draw upon it? Worse than that, should I worry that I may not live long enough to receive the pension? Gloomy thought, that one.
Apart from my state pension, I have a personal pension, which I set up when I was 26. At the time, I was given projections for the eventual payout. Most of what I was told went completely over my head and the written information I was given would have foxed Stephen Hawking, God rest his soul. I didn’t give my pension a lot of thought. After all, I was decades away from being of pensionable age and could not possibly imagine what I, or the world I lived in, would be like when pension day came.
So the years rolled by, in the blink of an eye. I got myself an Independent Financial Adviser to help me translate the rainforests of pension statements and summaries which struggled through the the letter box, once a year. On my IFA’s advice, I continued to make monthly payments into my pension. It was much more than I wanted to pay, but I was assured it was necessary for me to enjoy a comfortable retirement.
Fortunately, I have survived to the age when I can draw on my private pension and I thank God for that. There is now a pot of money, which has to last as long as I do. The pot doesn’t have a secure lid which means that money can pour out of it if something bad happens in the world or, more precisely, if the money men (and some women) in charge of pensions think that something bad is going to happen. They may be right or they may be wrong and getting their knickers in a twist, but money will pour out of my pension pot anyway and there’s really not much I can do about that. Money does slosh back in again, but you never know when that will be and it never seems to come back in at the rate at which it poured out. Either way, the money men (and some women) will charge you, even though they have not secured your pension pot with a lid tight enough to retain what’s in there. Theoretically, at least, you could lose the entire contents of your leaky pot.
So it turns out that pensions are a bit of a gamble from start to finish. Not only do you not know exactly how much might be in that rusty, leaking old pot, but you don’t know how long you will live to dip into it. This is when it all starts to get a bit absurd because you have to try and figure out your prospects of longevity. Of course there are actuarial figures to help you, but these figures relate to notional people and I don’t know any of those. I know that my dear old mum and dad survived into their 90s, God bless their beloved souls, but that doesn’t guarantee that I will follow in their aged footsteps. Their parents and my grandparents, died much younger. A very dear friend, who was younger, fitter, slimmer and had a much healthier lifestyle than me, died in her late 40s. She was the last person I would have expected to die young.
Apart from that, there are hideous, random events which no-one could foresee and these are happening every day, all around us. I could just as easily be caught up in one of those, as the next person.
So here in my middleish years, I must regularly confront my own mortality in order to determine (i) when I can draw on my pension and (ii) how much I should take. All the while the money men (and some women) move my pot around, allowing the lid to slip off, from time to time, with unfortunate consequences. I should make it clear here that I’m not being flippant about ageing and dying. Facing up to one’s own demise is a truly serious business and one which I may return to, in future posts, on a more serious basis. This post is directed to one of life’s absurdities, as I see it. Having been a fairly careful person, all my life, and very risk averse, it looks like I’m turning to gambling in the later stages of my life. Too bad that, because I’ve never been a gambler.
As for the state pension, well I appreciate that the government is trying to help people plan for their old age and give them certainty. For me, there’s a rich irony in the fact that the state pension is right up there with some of the most uncertain and imponderable features of life.
I’m not complaining (much) and I have a lot to be thankful for. It’s all part of life’s rich tapestry.
Better go now and get on with honing my poker skills…..