15/09/2014 Inside Out South West

as we hit the road with the pensions haves and have`nots.

Welcome aboard the pensions special. Are we ready? Yeah!

If you don't save for your later life, what are you going to live on?

The state pension is going to be around ?20 a day.

Is it ever too late to start saving for a pension pot?

We give one woman a financhal MOT. Plan?! I don't have a plan.

Really, you're looking at more than doubling your monthly paxment

the high risk deals that could cost you dear.

They sometimes feel that the only way out of this misery is to

I'm Jemma Woodman. Welcome to Inside Out South West.

Nearly half of 18 to 60`year`olds in the UK haven't got a prhvate

reckon they'll manage on state retirement handouts alone.

And that's the worrying phcture revealed in a new Inside Out survey.

But first, Jon Cuthill on a potentia pensions timebomb.

Previous generations retired at 60, got on with the gardening

and were grateful for a fred bus pass.

But with life expectancy continuing to rise, even if

we retire later we're likelx to be retired longer.

These days, most of Britain's workers don't have a pension sorted,

which could leave us relying entirely on the state or, lhke our

65`year`old bus and its 70`xear`old driver Mervin, still working.

I enjoy it and I'm a part of the busindss.

It's a nice job, you meet nice people.

I did invest into a pension but it went down the pan, so...

Today, we're on a trip to the seashde.

And where better to meet thdm the Pensioners pub?

Half of our passengers in otr 1 49 Bedford bus are retired.

The other half are pension refuseniks, a handful of Brhtain's

13 million company employees who don't have a private pension.

The Government's rolling out a schem to try to put that right.

Auto`enrolment makes it a ldgal requirement for companies to

But if you earn less than ?00,0 0, you won't qualify.

And anyone self`employed will have to sort themselves out.

Here's a question for you ` hands up who has got a penshon.

OK. Who hasn't got a pension? Hold on. Why not? Money, re`lly

Saving up for a pension, putting money aside each month,

just isn't feasible at the loment. I'm Adam Fox.

I'm 27, I'm a senior colour technichan.

I get paid ?500 a month at the moment with my training, so there's

absolutely no extra funds therefore pensions and things like th`t.

And Adam's not the only one. You haven't got a pension ehther? No

I'm Katie, I'm 26. I'm a carer. I'm on ?6.50 an hour.

so it's not beneficial to md to pay into a pension at thd moment.

Hilda... Look what just came. What's that?

It's your letter from the Qteen Is it?! It is!

Hilda's celebrating her 100th birthday today.

These days, you're 44 times more likely to do the same than 60 years

ago, which has prompted the Government to make the most sweeping

changes to pensions in generations. Hello there, welcome aboard.

Time to make room on the bus for Minister of State for Pensions

Steve Webb, the man responsible for the radical reforms.

The first thing we've got to do is get millions of people

into a pension at all, parthcularly starting with young people,

and then we've got to get pdople to build on that base minimum level.

So 8% of your salary, for most people,

won't get you a comfortable retirement.

It's a start but we want to build on that. What about the charges

Once you get a pension, you're going to be nailed by charges.

In the past, too many peopld have been ripped off, frankly,

These new workplace pensions will be different

because we're going to cap the charges.

So from next April, more than 99p in the pound that you

put into a pension will go into the pension, not into charges.

So they will be the best value pensions, particularly

because your firm is putting money in as well.

One of the best things you can invest in.

With a captive audience, Stdve Webb can't resist the opportunitx

to nudge the pension messagd. So tel me about your pensions experience.

Have you got one, do you thhnk you're ever going to have one?

What's your story? I'm self`employed. OK.

I do events and weddings and things like that and I don't think

the return that you get from a pension is going to be valid.

Mark is 39. Instead of a pension, he's opted for a buy to let.

My property's going to be rented out to students.

In Southampton, there's a rdally high student population,

and it's right in the centrd of town so it's a wicked location

and it's always going to rent, no matter what.

37`year`old Balvinder Singh has frozen his private pension,

put off by the constantly increasing retirement age.

I don't trust pensions because I don't

know how much I'm going to get and what I'm going to get that,

because they keep increasing every day.

Sometimes they're saying 60, 65 now they're saying 70 years.

I don't know how I'm going to live at that time.

I can understand why people may want to do things in addition to

pensions but they should consider pensions as one of their options.

And for people that think it's too hard,

there's always something ` a little something that will make it

easier for them ` such as if they work for an employer, it cotld be

the employer could contribute into their pension scheme.

So ask the question, phone people like us at the Pensions Advhsory

Service, and we can give people little hints to make it helpful

But don't just rely on one source of income in retiremdnt.

Things are different on the retired side of the bus,

where some have the sort of goldplated final salary schemes

that anyone who is signing tp to a pension now will probably ndver get.

I don't see myself as being in any way privileged.

I see myself as having workdd in the public service for a relatively

reasonable salary, but the attraction of it was always

the reasonable pension at the end of the day.

Pension pretty good, really, because it's index linked and I know

from year to year exactly what it is I'm probably going to get.

I ended up with a final salary scheme.

I'd been with the same company for 30 years

and was rewarded for that loyalty with a decent pension.

But not all pensioners are as fortunate.

I'm Lynne, I'm 67 and I'm strviving on a basic pension, which is

I'm Reg. I'm 78 and my statd pension is about ?640 a month,

plus I have a private pension which is ?150 a month.

Between them, that's an income of roughly ?13,000 a year.

Recently, ?17,000 per household was quoted as the amount

When you're young, you don't think about 40 years hence, do you?

It sort of creeps up on you until you suddenly get to about 44,

We don't take life too seriously because I think if we did,

Joan's 93 and has been retired for 30 years.

She thinks there's been a ctltural shift towards spending now

rather than putting money away for later.

I don't think nowadays people know how to save ` young people `

so they've never had to makd do and mend like we had.

As the pensions special rolls down the promenade, time for somd words

of warning for those of us who might still have our heads in the sand.

The majority of workers don't have pension savings,

so anyone on that side of the bus, you're not alone `

there's lots of people like you out there.

if you don't save for your later life, what are you going to live on?

certainly for those who are relatively young now, is ch`nging

dramatically and, from 2016 onwards, younger people will know th`t

the state pension is going to be around ?20 a day.

Now, if you think you'd be happy living on ?20 a day for

the rest of your life when xou've reached retirement,

but if you think you might want more than ?20 a day to have a

decent lifestyle, then unless you do some savhng now,

you won't have any money coming in from that pension later.

So it's all about being prepared ` or is it?

I was planning to start sorting out my pension at the age

of around 40 which, after today I've realised is far too late.

I think we're more, like, live for today,

because you never know what's going to happen tomorrow.

Business is going good, property's going well,

so I'm quite happy with how things are going.

One thing is for certain, though ` when it comes to keeping our heads

above water when we retire, we're all going to have to plan ahead

If you're worried about your pension then why not visit our webshte?

There's lots of helpful advhce and information.

So, how late is too late to take action?

We asked one woman from Plylouth in her 40s to find out.

when music festivals were the hangout of hippies of tender years.

But now the groovers have grown up a bit.

Like 48`year`old Siobhan from Plymouth.

Festivals are her passion, along with...

Cookery classes. I do forensic science ones. Tap dancing now.

I recently did bookbinding. Anything that just gets my attention.

There's only one problem ` how is she going to pay for it all

when she retires? Plan?! I don't have a plan.

I'm thinking I need to prob`bly sort something out,

Many of Siobhan's friends are in the same boat.

I haven't made any provision apart from state pension. Are you worried?

A case, perhaps, of Porsche today, pauper tomorrow.

There's an awful lot of people around my age who haven't

done anything about it and suddenly, we're sort of coming up to 40,

or hit 50, and having a bit of a panic now

So, has Siobhan left it too late to sort out her pension?

Ali Treharne is BBC Radio Ddvon s financial guru.

I don't think it's ever too late to sort out your pension.

I think you need to underst`nd that it's a part of your money.

You need to understand how it's invested

and what it can possibly produce for you by means of retirement hncome.

But obviously, the longer you save for, the more chance you have

of your savings growing and the more you can put aw`y.

So it's something that people really ought to

get into the habit of youngdr, much younger.

We've asked Ali to give Siobhan a pensions make`over.

Siobhan isn't paying into a private scheme right now

but she thinks she might have done in the past

She reckons she can get by in retirement on ?12,000 a year.

when Siobhan is likely to rdceive a state pension ` and remember,

the state pension age is increasing in the next couple of decadds.

So we'll work out when she's likely to receive that and that will form

the large majority of the pdnsion income that she thinks she needs.

I'll then work out the shortfall and I will then work out how much

I believe she needs to save each month so that she can meet

that shortfall of income from her own personal savings.

And I hope that will make hdr realise that starting now is

an incredibly put important thing to do.

While Ali crunches the figures, we've asked Siobhan to experience

the reality of living on a reduced income.

?12,000 a year would give Siobhan about ?230 a week.

Take away the cost of her likely overheads

and she's left with ?70 spending money. Can she stay within budget?

Well, it's been a long time since she had to be frugal.

I didn't earn a lot when I was younger

so I've always had to buy everything cheap and budgetx,

and now that I've got a better paid job and a bit more

disposable income, I'm a bit more extravagant now.

I feel like I don't have to shop like that,

First stop, picking up some bits for ` yes, you've guessed it `

Right, so I got a box of Pinot Grigio so that will do us

over the weekend. And lots of snacks in between. How much did yot spend?

?54, but I have got a few basics for home as well in there.

The majority was spent on these bits and bobs for the festival.

She manages to resist the lure of the department store

And there's plenty of temptation here.

?120?! Wow! Oh, look, a collapsibld kettle.

Oh, that's a must have, that is Next, the jackets catch her eye

You might be wondering what's wrong with the one she's got on.

Not pink enough, apparently. Thanks very much. Brilliant. Thanks a lot.

OK, so I bought the jacket ` the nice pink bright one `

and it was ?100, so I am officially now over budget.

So living on ?12,000 a year just might be a challenge.

But how much does she need to start saving to have even that?

Financial adviser Ali Treharne is back with the bottom line.

So, Siobhan, I've done the calculations. The good news

is, you know you mentioned you have a personal pension

from your previous employer that you didn't really understand?

Well, that's worth ?28,000. Really? Yes.

So don't be put off by the word pension.

So the employer was paying hnto it, you were paying into it,

So you have that pot alreadx and that's going to be

You will have the state pension which is likely,

under the new state pension rules that are coming in from 2016,

to provide you with ?7,700 of income each xear

So using your personal penshon of ?28,000, my figures are that

you should be saving an addhtional ?200 a month from now. Wow!

It's quite a lot a month, isn't it? It is.

It's a bit more than I was expecting to have to pay.

If I can soften the blow a little bit,

that part with your existing personal pension should

provide you with enough to lake up the shortfall of income,

so that you should have just over ?12,000 worth of incomd a year.

But is ?12,000 a year realistic Time for a confession.

I've sort of being watching my budget for the last week,

and I've already blown my btdget cos I had a day off and went shopping.

whether the 12,000 a year is really going to be enough

if I have these little blowouts which am I want every now and then.

Well it sounds like no is the answer if you are having these blowouts.

You need to build in some extra there.

I wish I'd started saving ydars ago. Well, it would make a difference.

And also, a word of caution here ` you mustn't delay,

because it will cost you de`r if you do.

So really, you're looking at more than doubling your monthly payments

For Siobhan, it's been a wake`up call.

It's been quite strange going into this different hdadspace,

chatting with Alison, finding out what my options are, and,

actually, I've got another 20, 30 years after I retire

that I'm going to be around, so it's been quite a strangd process

to go through but I feel now that I'm basically saving for my future.

Siobhan has decided to invest partly in a pension

and partly in a NISA, hoping that by putting a bit away now,

she'll have many years of h`ppy clamping in retirement.

This is what you work for, H suppose ` days off like this.

This is what I have the cash for, this is what

I got a pension for ` days like this and more bottles of this.

Inside Out has been digging down into the reasons why

so many people have got a downer on private pensions.

39% of 18 to 60`year`olds who took part in our exclusive research

told us that they simply couldn't afford it.

28% said they were too young to start thinking about it yet,

and 27% said they haven't got round to it.

One of the other main reasons people gave is that they just didn't

Inside out's Andy Akinwolerd has been undercover to expose

In fact, that's what they c`ll it ` pension liberation.

When Jeremy from Plymouth ndeded to free up some cash,

one scheme seemed particularly appealing.

At the time, it seemed like the answer to several issues th`t

A way of moving my pension from the funds that

I was not confident about the future of, and a way to release

a lump sum of money which could have helped up my situation at the time.

He transferred almost ?400,000 to the schele

Very clever, very slick, very convincing and they believed them.

Numerous people have said to me that they sometimes feel the onlx way out

of this misery is to commit suicide because there is no escape.

For those of us stuck in a financial hole, freeing up

our pension pot might seem like the light at the end of the tunnel, but

the people I've met so far say they were kept in the dark about tax

That's why I'm doing my own research.

I want to find out if companies are really telling

I can cash my pension in early and not pay tax.

Tell you that HMRC are also going to take a further 35%. That me`ns sea

with about 10% of your penshon. That is a frightening thought. Otr

company is setting out to mhslead or just being short on facts? H'm

hoping some calls will help find out. We have chosen a selection of

companies at random. I have asked an expert to listen in. I'm prdtending

to be 48, so they did cash hn my pension, it would be tax to pay You

can't take money out of the pension before the age of 55. This company

knows the rules, so maybe I will not be misled. Operation Scorpion might

have something to do with that. It is what the police and penshons

readily tours are calling their crackdown on pension liberation

companies. Since being set tp, it has investigated a sector worth

almost half ?1 billion. Are its tactics working? We've been making a

few more calls. I want to know what Richard thinks. I'd like yot to

listen to this and pick out the wrong doings going on. Hello there.

We've made it clear I am under 55 but need cash ` and fast.

The money is generated at 20% of the value of your transfdr.

Those monies are paid back to you through other channels.

Secondly, if you switch your pension fund you will receive 20%

Already shaking your head and grinning.

Whoever that business is, you know, if money is coming out it mtst come

There is no money magicked from anywhere.

But that is "pension liberation , whatever name they put on it.

Well, no, because the money is not coming out of the pension ftnd.

No tax liability for taking cash early?

That case, he's going to lose his penshon.

We can give you a 20 percent cashback.

In fact, of the nine companhes we contacted online and on the phone,

That has left me feeling as miserable as the weather.

What is the pensions regulator doing?

We've raised awareness with the police and providers

and the important thing now is to raise awareness of consumers.

I think it would be a zero`sum game for operators to

So the message to get out to consumers is that

if anyone offers you access to your pension scheme before the age of 55,

they are telling you a lie `nd you need to walk away very fast indeed.

And don't the victims and their advisers know it.

So, I'm playing them somethhng they really need to hear.

The money is generated at 20% of the value of your transfdr.

Those monies are paid back to you through other channels.

It's the same spiel over and over again.

The poor consumer out there does not know...

If people are still being mhsled, why are the victims paying? I am

hoping Ruth Owen can answer this question. She is the Director of

personal tax. People have bden stung left right and centre. I yot telling

me that people have to pay this money back, even if they did not

know about it in the first race If there is a tax due, HMRC must apply.

That is the way the system works. If you have access to money th`t breaks

tax rules, then we do have to charge you tax because you got the tax

relief that you were not elhgible to receive. So, you will be ch`rged.

What is there to protect consumers? I recognise that and I have seen

many cases where there were really tragic circumstances and people were

misled and have lost their dntire retirement savings. I do re`lly feel

for people involved as some are really innocent victims in these

situations. But, from a tax point of view, we must apply the ruld equally

and fairly and if you have chosen to take your pension out of thd safety

of a pension pot, tax will `pply. A lesson the victims are learning the

hard way. My opinion is that their job should be to prevent thd kind of

con artists, people who manhpulate, people who are in distress.

Operation Scorpion is helping raise awareness but as our evidence

shows... There is no problel whatsoever. New victims are still

being stung. That is all from the inside out team this week. We'll see

you next Monday with more stories and investigations from arotnd the

South West. See you then. Hello, I'm Ellie Crisell with

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