The investment analyst lists the pension crisis as bigger than the problems in the eurozone and government spending cuts, which take up far more column space in UK newspapers. “I know this has been acknowledged as a problem, but I don’t think it’s gone far enough – this is the single biggest issue facing the UK population in the next 20 years,” said Morgan.
“It’s not just a small number of people who are going to find retirement difficult – there are going to be a huge raft of people who haven’t put any money aside for themselves.”
Morgan lists disillusionment with the financial services industry and sheer apathy as the principle reasons for the crisis.
“The fact of the matter is, people care more about saving for holidays, a house deposit and going to the pub,” he explained. “There clearly needs to be more education in the area from a young age, which we aren’t seeing.”
“I previously worked for a corporate pension provider, and I was seeing schemes that matched employee’s contributions and more, yet still were being ignored. This is just plain daft in my opinion.”
“It’s also the general distrust of financial services. Every time there are negative headlines about banks or pensions it leaves a lasting image, which is a shame because there’s plenty of very good people in the industry.”
The latest FE Trustnet poll revealed that almost three quarters of investors favour saving through an ISA than a pension.
Morgan says the results are reflective of the difficulties facing the younger generation. “I can understand why ISAs come out on top, because you get far more flexibility and can get your money out for a house deposit, or something else short-term,” he said.
“There’s also the problem of annuity rates being driven down because of gilt yields falling, as a result of inflation, quantitative easing and so on.”
“I think there’s certainly a place for both; since houses are less affordable these days, I suppose it makes sense to save first through an ISA and then a pension at a later date.”
“To be honest though, the main thing is putting some money aside for your retirement, regardless of how you do it.”