Trying to retire in Oban

By Richard Westcott
Reporter, BBC News

Could you retire on £2,500 a year?

Andrew McIntyre gives his take on the pensions crisis

That was the choice facing Andrew McIntyre as he hit his 65th birthday this year. If he had wanted to retire a year ago he would have earned at least three times more. What a difference a banking crisis makes.

"To have made contributions for the past 30 years into a pension fund, and find at the last minute it's all, or a large part of its gone up in smoke in a very short period of time is extremely worrying," he says.

It gets worse. A lump sum Andrew had hoped would cover the last of his mortgage came up £20,000 short. The house is now paid off, but it cost him a big chunk of his savings. For now, he is forced to carry on working.

Andrew lives with his wife in one of the most beautiful parts of Britain: Oban, the gateway to Highlands, or the gateway to the Isles depending on which way you are looking. It would be a wonderful place to retire.

The old idea that you'd get a gold watch at 65 and then go off to prune the roses for the rest of your life is a model that's become totally obsolete Andrew McIntyre

He runs his own business, making and selling innovative rotating greenhouses that he designed himself. He also distributes wood burners, which are selling like hot cakes in the credit crunch.

"I'm one of the lucky ones. I enjoy what I'm doing... but if I get hit by a spell of ill health... My concern is that my children have mixed views about the advisability of providing for later life, because they have seen what's happened to my efforts to do so."

So what has gone wrong for him?

When most people retire they cash in their pension pot and use the money to buy an annuity from an insurance company. They receive a guaranteed income for life in exchange for their lump sum.

The problem is, if the value of their pension savings is linked to the stock market it could have shrunk dramatically in the past few months. The FTSE 100 has dropped 40% since the summer. A smaller pot means a smaller annual pay-out.

Many will now have to either postpone their retirement, if they can that is, or get by on a lot less than they had hoped.

Andrew is not feeling sorry for himself - just shocked at the speed of it all.

"The old idea that you'd get a gold watch at 65 and then go off to prune the roses for the rest of your life is a model that's become totally obsolete."

"Most people are going to have to think in terms of probably working for as long as they physically and mentally can."

In the distance, Andrew's little boat sits in the water, waiting to be sailed. The skipper is too busy to take her out right now.