Andy Haldane, the BoE’s chief economist, explained recently that pensions are too complicated and that property is the better place to put your money due to the continuing rise in prices.
According to the bank’s chief economist, property is the better form of retirement investment than a pension.
Talking to the Sunday Times, Haldane said: “I see myself as not having to worry about money, but plainly not wealthy. I never have [felt wealthy] , and never expect to in this job.”
He sees property as the better, safer bet when it comes to planning for your retirement. “It ought to be pension but it’s almost certainly property,” he said.
“As long as we continue not to build anything like as many houses in this country as we need to … we will see what we’ve had for the better part of a generation, which is house prices relentlessly heading north.”
Ros Altmann, the former pensions minister, responded to Haldane’s suggestion by saying the chief economist’s comments were “divorced from reality”. Furthermore, he pointed out that it was “irresponsible” to suggest people should rely on property instead of pensions.
This is not the first time Haldane has made some headlines when it comes to his dealing with pensions. In May, he admitted in a speech that he was unable to understand pensions as he felt the system was too complicated.
I consider myself moderately financially literate – yet I confess to not being able to make the remotest sense of pensions. Conversations with countless experts and independent financial advisers have confirmed for me only one thing – that they have no clue either.”
According to the BoE chief economist, ordinary workers had no chance to make informed decisions for their retirement funds which led him to call for the system to be simplified.
Feature image by Manchester Business School.