PENSIONED OFF!

There may be trouble ahead... retirement pensions will increasingly become unaffordable in the coming years, whether it's the state retirement pension or company and private pension schemes

It's Friday. It's financial. It's Friday Financial with JULIAN SAYER.

It's official. The UK state pension is worst in Europe.

It's been a busy two weeks looking after my six year old during the Easter holidays, but that's the conundrum of modern life. One of my pet hates is the lack of time modern life gives you; investing your most precious commodity (time) into the teaching of your greatest asset (your children.) So I am afraid this week's blog will be a short piece.

How a society looks after it's young, old and most disadvantaged says everything about it. This Government's continued attack on the most disadvantaged continues relentlessly. The poor, unemployed, handicapped, young and old are all suffering with reduced income, while the rich and multinationals continue to flout the tax laws stashing trillions of pounds in off shore tax heavens. This week I want to take a look at what's happening in the pensions industry, how it's affecting the pensioners now and how it will affect you when you retire in the future.

Having worked in the industry for twenty odd years, one thing I know for sure, is that this Government will continue to reduce the amount of pension you are going to receive in the future. Everything points towards it, an ageing population, reduced tax revenues, low employment levels, and longer life expectancy. In the UK we were once the envy of the world with our well run state and private pension schemes, and those lucky enough to have worked in the "golden generation" have reaped the rewards and are enjoying the benefits of these schemes. Sadly, just like our other world renowned institutions like the NHS and Railways, our pension system will be run down and hived off for the profit of the few, and to the detriment of the many.

THE GREATEST DECEPTION OF ALL

Quantitative Easing: State sponsored theft on a larger-than-industrial scale from the working and middle classes to the mega rich. In addition to denuding the mass of the population of their meagre resources, employment and welfare, the proud cultural heritage of countries such as the United Kingdom is also being ruthlessly plundered.

It's Friday. It's Financial. It must be FRIDAY FINANCIAL

with the blog's money and banking expert JULIAN SAYER.

This week Julian takes a look at how RBS has managed to take billions of taxpayers’ money and, err, piss it against the wall.

MUCH to the dismay of the British taxpayer, the Royal Bank of Scotland (RBS) announced their latest financial results this week. Only another £8.2 billion pound loss, bringing the staggering total of losses since 2008 to £46 billion.

http://uk.reuters.com/article/2014/02/27/uk-rbs-earnings-idUKBREA1Q0ED20140227

This raises a lot of questions, but the one I want to illustrate today is how does a bank survive these losses, and continue to operate in the financial world. The very simple explanation is Quantitive Easing (QE.)

Quantitive Easing is simply the art of creating money out of thin air via central banks, in our case The Bank of England. That money is then given to commercial banks such as RBS, in exchange for huge chunks of toxic debts that the bank has on its balance sheet, and are effectively worthless. The commercial banks are then meant to use these magically created new funds to start lending to the economy and everything in the economy will be hunky dory.

However, that hasn't happened. So what has happened since the financial crisis broke in 2007? Well, first off, the banks moved the goal posts on lending. Fearing more losses they reduced the criteria on which they lent, cut the amount of mortgages they issued, reduced the overdrafts they lent, and cut new lending almost overnight. This in turn had a disastrous effect on the real economy, businesses cut back, many went to the wall and unemployment soared. Hundreds of thousands of businesses have gone to the wall over the last few years. So if the banks weren't lending this new money, what did they do with it?