You can’t really avoid talk of pensions at the moment. With all the strikes and protests I think most people have been affected in some way.
Whatever your view on Public Sector pensions I’m sure you’ll agree there’s no easy answer.
It does make you think though.
How will you pay for your retirement?
We’re all living longer. So much so that bbetween 2011 and 2016 the number of people aged 65 and over will rise by 1.4 million while the working age population below 50 will fall by 160,000. This demographic shift will continue so that that by 2041 there will be just 2.5 workers for every retired person, down from nearly 4 now.
By 2041 retirement pensions will cost taxpayers £32 billion more (in today’s money) – the same amount as the Government’s total spending cuts for this Parliament – and the NHS will cost £40 billion more each year.
A lot of the larger employers used to have Final Salary Pension schemes but most of these have now been closed down. Increasingly now it is our own responsibility to provide for our own retirement.
It is worrying to read that nearly half the working population is not saving enough for retirement, and a fifth are failing to save anything at all, according to latest research published by Scottish Widows.
This found that although people want, on average, an annual retirement income of £24,300 to live comfortably, only 51% save adequately for their old age. This drops to about 25% when those with a final salary pension are excluded.
Auto-enrolment will help to promote the idea of saving for retirement so at least it is a start but is not the complete answer by any means.
It is now more important than ever to seek Independent Advice and plan for a long and happy retirement.
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