We have not given up much ground, though the push through to a new high for the FTSE 100 Share Index seems to have been put on hold. The news coming through has been positive, rather than negative, though. Expectations expressed by the British Chambers of Commerce that the UK economy will have restored its fortunes to the levels that applied before the financial crisis of 2008 did bring a little comfort to our market, despite a soft start to the week following some downbeat economic stats out of Asia, but it doesn’t appear to be enough.
Also published recently was research suggesting we Brits are more concerned over our prospects for financial security in retirement than most other nations. It seems that most of us do not believe the state pension will be enough to maintain us in our old age and we expect to be less well off when we finally give up work than our parents’ generation. The consequences seem likely to be for us all to work longer – until we are 70 or even later.
In a way this seems only to be expected, given that we are all living longer, but it did appear strange that we are less optimistic than the other nations polled in this research. One of the principal areas of difference with other nations was our belief that the state pension would be insufficient for our needs – or at least three quarters of us felt that was the case. Yet other countries are in much the same predicament as us, with an ageing population placing strains on government resources.
Of course, pensions have been an easy target for revenue raising by governments in the past, while a continuation of the low interest policy from the Bank of England has made annuities somewhat less attractive. What we need is a resumption of the bull market to drive up the value of our pension pots. Whether we get it or not is anyone’s guess.
Brian Tora, who is a respected writer and broadcaster on investment issues, is a consultant to JM Finn & Co. Brian has enjoyed a long and distinguished career in the City. Any opinions expressed are his own and should not be construed as advice from JM Finn & Co.
A version of this article may appear elsewhere in the press
11 March 2014
Market comment: a personal view 11 March 2014
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