A typical response to this is that the celeb in question saw the value of their pension pot fall a few years back and was so stung that they decided pensions were not worth it. Instead, they have worked out some alternate piece of financial planning – typically, a second or third property that has more than doubled in value in the last seven years.
The celeb thinking here seems to be, ‘I am an exceptional person with an exceptional income, who is capable of an exceptional approach to planning for my retirement’. While many in pensions might recoil at such flippancy, the approach has value. The excitement gained from their success in property has turned these celebs into investment enthusiasts.
An idea being put forward by Ian Richards, head of defined contribution at Legal & General, runs on similar lines. To engage more employees in pension savings, he has floated the idea of employees being responsible for the investment of 20% of their pension pot.
It would definitely make a change from the proverbial dinner-party conversation about house prices.
David Rowley - Editor Pensions Week
