Over the next decade, 1 billion people will enter the labor market.
Altogether, the global economy will need to create 5 million jobs each
month, simply to keep employment rates constant. Global growth and
poverty reduction over the next 20 years will be driven by today’s young
people, yet many of them face significant difficulties in finding
productive employment.
Not only must we try to keep pace with the growing labor force, we must
also do much better than we have done over the past 50 years. This
requires that we engage more effectively to bring hundreds of millions
of people into productive work and out of poverty. More energy and more
resources must be devoted to developing and harnessing effective
solutions to enable this transformation. This requires a global action
that involves coordination from many stakeholders, and also
requires solid evidence on how best to improve the job market for young
people.
More than 170 academics, business leaders, and government ministers gathered for the Solutions4Work
conference on May 7-8 in Istanbul, Turkey to discuss advancements made
in youth employment and to plan next steps for maintaining momentum and
driving progress on the issue. Convened by the World Bank, the event
highlighted achievements of two initiatives that have contributed to
recent progress: the Global Partnership for Youth Employment (GPYE) and the Multi-Donor Trust Fund on Labor Markets, Job Creation, and Economic Growth
(MDTF). Both initiatives have built a solid foundation of knowledge
that promotes evidence-based solutions to youth unemployment, including Measuring Success of Youth Livelihood Interventions and Strengthening Life Skills for Youth.
To expand on this work and address remaining challenges, a group of stakeholders that includes the International Youth Foundation, the World Bank, Youth Business International, Accenture, Plan International, and RAND Corporation is evaluating the need to create a global coalition dedicated to addressing youth employment.
This post is part of a series appearing from the Solutions4Work Conference – held in Istanbul, Turkey.
Source The world Bank Blog
Saturday, 10 May 2014
10 COSTLY PENSION MISTAKES MILLIONS OF NIGERIANS MAKE-Odunze Reginald C
10 COSTLY PENSION MISTAKES MILLIONS OF NIGERIANS MAKE
According
to recent research, the latest life expectancy figures reveal that a 6o year
old pensioners today are expected to live off their pension for an average of 15
years- this is nearly a quarter of their whole life. That is why if there is any pension
mistake it could cost more.
According to Robert Kiyosaki (1999) in his book ‘Cash flow quadrant, the Rich dad guide to
financial freedom’ he noted that people invest for two basic reasons,
· To save for
retirement
· To make lot of money
The
first one underscores the importance of pension schemes, but people make
serious mistakes in pension and they are as follow:
1 Not interested
Most Nigerians
are not interested to making pension contributions, they are argued that their
parents loose out in the old schemes, because they were unable to access their
fund , having been marred by corruption, irregularities, government bureaucracies
, no adequate data base, they argued that the scheme failed and as such, the
present one will also fail. By that they refused to present themselves for
pension registration.
2 Misconception about the scheme
and influence from the employer.
Most people
feel that the pension system is like the banking system where they can have two
or more account numbers. They entered the scheme with such mind set and as such
they are engaged in double and multiple registrations. Most employers are also influencing the
employees by letting them re –register, the reason being that they are using
this Pension Fund Administrator or the other. There is also the unethical practice of most pension fund
administrators who are engaged in double and multiple registrations.
3 Not saving enough.
Almost
more than two third Nigerians of working populations do not have a pension
account, including the informal sectors, those with various state governments
and other categories too many to mention. Also the savings are not enough as
people are not keying into voluntary contributions. What they contribute is
basically not enough to carry them.
4 Delaying Savings.
Most employees
do not readily make themselves available for pension registration even when the
employers have indicated interest in embracing the scheme. They have
lackadaisical attitude towards enrolling in the scheme. They do not know that
there are investments on the pension contributions. Even among the government
employees they still find it difficult enroll, even when their money is deducted
at source from the Accountant General.
5 Not checking if they are
getting real value for their money
People are not always interested in the
pension money until few months to retire, and as such they do not know what is happening to their contributions
if at all they enroll.
6 Not getting proper enlightenment before
Retirement
Research has shown that what people did not
achieve in their youthful age they tend feel they can achieve it during their old
age. They have that erroneous feeling that the pension money can do all things.Therefore pensioners have that mindset that the pension money will be
target for one or two things, they could not achieve earlier in life. Most retirees
have the mindset that they will collect all the money in the retirement saving
account. They always say, the money belongs to me why pay me 25percent , why
not pay all, or even 50 percent. Most of them are not aware of the Pension
Reform Act 2004.
7 Using
Retirement money to marry wife and buying a car.
Most retirees end up using retirement money
in marrying new wives and procuring new cars. By so doing they attract people’s
attention to their life, they also end up having issues with their immediate
family especially their first wife who now feels alienated, even though they
not know that marrying a new wife set
aside the existing will, if there was no update of the previous will.
8 Not checking your pension pot
Tom Macphail in 10 costly Pension Mistakes noted
that “If you have a pension, have you ever reviewed it? Millions of
people haven't. Moreover, recent research revealed more than two in five adults
(41%) - 8 million people - cannot remember how their pensions are invested. Why
is that alarming? Performance can vary quite dramatically across investments
and even a seemingly small difference could have a significant impact on the
size of your pot” Continuing he stated
that these are just projections. Investments will not always go up in value,
they also go down, so you could get back less than you invested; what is
certain is that they won't perform as predicted. Also, these values are in
today's terms, without considering inflation, which will reduce the spending
power of your money over time “
Therefore
checking your pension pot is very essential in avoiding mistakes.
9 Relying on Retirement fund.
Many rely on the retirement fund, they build
castle on their mind with the retirement fund, they fantasized on what and what
they could do with the retirement money, only to be disappointed that the money
is not big enough.
10 Having
a negative attitude.
Some people
have that mindset that they will not live to see their pension and the Biblical
Job what they fear most always comes to them.
In my experience in talking to people about
pension, some will always say will I live to have the pension? I always tell them, to
maintain a positive attitude towards life.
10 costly pension mistakes millions of Britons make by Tom Mcphail (Hargreaves Lansdown)
10 costly pension mistakes millions of Britons make
Everybody
makes mistakes in life, and pensions are no exception. The only
difference is you could pay much more – and over a longer time - for
pension mistakes than for most others.Why? The chance of surviving from birth to age 85 has more than doubled for men over the last three decades from 14% in 1980-82 to 38% in 2009-2011. More than ten million people can expect to live to see their 100th birthday.
The younger you are today, the longer you're expected to live, the more pension mistakes could cost you.
So what are the 10 most common and costly pension mistakes?
1. Not saving enough
Almost four in ten British adults don't have a pension, including 1.4 million who are within a decade of retiring. How do you know if you're saving enough? People want on average £24,300 a year to live comfortably when they retire. Yet in 2010/11 the average male pensioner had a pension income of £319 a week or £16,600 a year, according to the Office for National Statistics. That's a gap of nearly £8,000.Is your pension on track? Discover the retirement income you could receive and how much you should consider saving to meet your target. Plus, what impact do inflation and charges have on your pension? This f
2. Delaying saving
Quite simply, the longer you delay, the more it costs you to build a good-sized pension. This is because of 'compound interest', which Albert Einstein called "the most powerful force in the universe". How much could delaying cost you?Let's assume you pay £125 a month into a pension until age 65 and the fund grows 5.5% a year after charges. What's the difference if you start contributing at age 20, 30, 40 or 50? Roughly speaking, every ten-year delay could reduce your fund's potential growth by half.
The table below shows the figures. Of course, these are just projections; the actual return could be less or more than this. The figures show the values in today's terms, without considering inflation, which will reduce the spending power of money over time. Moreover investments are not guaranteed: they can go down as well as up in value so you could end up with less than you invested.
Everything being equal, the earlier you start saving, the more potential your pension fund has to grow. This free online pension calculator shows you what this could mean for you.
The longer you delay, the more it costs you to build a decent pension
3. Not checking your pension pot
If you have a pension, have you ever reviewed it? Millions of people haven't.Moreover, recent research revealed more than two in five adults (41%) - 8 million people - cannot remember how their pensions are invested.
Why is that alarming?
Performance can vary quite dramatically across investments and even a seemingly small difference could have a significant impact on the size of your pot.
A 35 year old with a £20,000 pension pot could have a fund worth £55,270 at 65 if his investments grew by 5% a year. His fund might be worth £97,347 at 65 if his investments grew by 7% a year, or £169,669 if they grew by 9% a year (assuming in all cases 1.5% annual fees).
Again, these are just projections. Investments will not always go up in value, they also go down, so you could get back less than you invested; what is certain is that they won't perform as predicted. Also, these values are in today's terms, without considering inflation, which will reduce the spending power of your money over time, i.e. by the time you retire, with a £10,000 annual income you will be able to buy much less than you can buy today with the same amount.
4. Not checking if you're getting good value for money
Most people know how much they pay for their mobile phone, but not for their pension. Nor do they know what they are paying for. The charges you pay typically buy you the services of your pension provider and the expertise of a fund manager who looks after your investments. In addition, some people employ a financial adviser to make recommendations. The charge for this advice is usually either paid separately or added to the pension charges. The services you get from your pension provider vary in depth and quality.5. Relying on property
As the saying goes: an Englishman's home is his castle. But it may also be his largest investment. If you decide to just use property as a retirement fund, you could be putting all your eggs in one basket. Investment professionals agree diversification is key to managing risk, although it doesn't guarantee against loss. So, if you already have capital invested in property, doesn't it make sense to consider diversifying and investing in different asset classes? What's more, the property market isn't exactly "safe as houses" - as people who had to sell their home in 2008 and 2009 will testify.6. Relying on inheritance
A quarter of Britons rely on inheritance to fund their retirement but many could find their plans are resting on shaky foundations. Why is that? Common sense highlights the first problem with inheritances: you can't be sure when you'll benefit from the windfall. The way life expectancy is shaping up, older generations are likely to live well into their retirement years.Moreover, the amount you end up inheriting may be far less than you expect. One in three women and one in five men aged 65 and over will need to go into a residential care home, according to Department of Health estimates. A single room in a private nursing home now costs £36,000 a year on average.
Will you have enough money when you retire? This free 8-page report
tells you what simple, actions you could take to ensure you're on track.
7. Not taking up employer contributions
Companies, especially the large ones, usually offer workplace pensions. In many cases, they also offer to pay money into your pension. The good news is that by 2018 all companies in the UK will have to offer a pension to their employees. The bad news is that most private sector workers aren't currently saving into a workplace pension. This means they could be missing out on "free money".8. Assuming the state will provide for you
One in five people who retired last year will rely entirely on the state pension for their income. This is worrying when you consider 83% of 25 to 54 year olds don't know the value of their state pension and more than 30% overestimate how much they'll get. For 2013/2014 the basic state pension will pay up to £110.15 a week. There is a proposal to replace the present system with a flat rate of £140 a week (in today's money). Would that be enough to fund the retirement you want?9. Not using pensions to save tax
Tax relief on pension contributions is one of those rare occasions when the taxman gives you something back. It cost the government £35 billion in just one year (2010/11). This is because under current rules when you pay money into a pension, the government effectively pays 20% of the total contribution (subject to maximum limits). If you pay a higher rate of tax, the government could in effect contribute 40% or even 45% in total. This means £20,000 in your pension could effectively cost you as little as £11,000. Although the value of any relief will depend on your individual circumstances and tax rules can change.10. Not shopping around when you retire
Even if you manage to avoid the mistakes above until the day you retire, there's one last pitfall to watch out for.When you retire, you can usually take up to 25% of your pension as tax-free cash. After that, most people will take a taxable income from their pension. They usually do so by buying something called an "annuity", although this isn't the only option available.
An annuity provides a secure income for at least the rest of your life in return for your pension fund. If you have a pension with an insurance company, they'll offer you an income, based on their own annuity rate. The vast majority of people take that option. This, however, could be a very costly mistake - and one you cannot rectify: once you buy an annuity, you cannot change your mind.
Annuity rates can vary significantly, depending on the provider you choose. What's more, there are over 1,500 medical and lifestyle conditions that could help you increase your annuity income. You don't have to be seriously ill to qualify, you just need to request an 'enhanced annuity', you could get thousands of pounds more every year for the rest of your life.
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