With the baby boomers coming to retirement age in 2012 and people aged 50 and over set to increase to roughly 50% of UK population, Pensions are a key issue in politics today.
The National Federation of Pensioners hosted a fringe event at the Liberal Democrat Conference with Stephen Webb MP and Norman Lamb MP which gave me the perfect opportunity to question the Coalition policies.
The Conservative-Liberal Democrat coalition proposed radical reforms for the pension systems in the UK. this included restoring earning links with pensions and establishing an independent body to review the system.
In addition to this, the mandatory NEST Pension Scheme is set to be introduced in 2012 over a gradual period for all people to ensure that such a pension deficit does not rise again.
What is not clear, is whether the NEST Pension Scheme will also be run in the same form of "Ponzi" fraud has been seen in the last hundred years in the UK.
This form of investment scheme can only fail, where money is taken from one person to invest in simply given to the next as an alleged payout of that investment. We are currently in a position in the UK where, with such a significant amount of people set to retire, we do not have enough people of working age paying pensions to be able to supply the current pensions.
However, when questioned, Stephen Webb MP asserted that it would not be a Ponzi scheme, instead referring to how the NEST Scheme would prevent the deficit in the future. However, I don't feel that my question on the investment was fully answered.
I would suggest that there are no guarantees and unless I am confident that my own money is going to come directly back to me at the end of my working life, I would be loath to invest in such a scheme.
Short-term returns are not a viable investment, the current financial deficit should identify that if nothing else. I would prefer to see far more sustainable pension policy before I entered into any such NEST-egg.