UK is facing pensions time-bomb, says report
BRITAIN is facing a retirement time-bomb which could force many people to rely on the state in old age, according to a report from the independent financial advisers Chase de Vere.
The study found that many Britons want to enjoy a long retirement but aren’t saving enough cash to support themselves in old age.
The Chase de Vere report said: “Unless action is taken, the only possible outcomes are that these people will have to retire later, have a poorer standard of living in retirement or become a burden on the state.”
Chase de Vere’s research looks at attitudes to longevity among 1,000 UK citizens. The company has compared the results with similar research which was undertaken in Germany, France, Switzerland and Austria.
A spokesman for Chase de Vere, which has an office in Leeds, said: “We wanted to see how the prospect of living for longer in the UK measures up to European counterparts. The results don’t make for particularly good reading.”
The study found that on balance, people think that the increase in life expectancy is a problem rather than a benefit to society. This view is strongest among older people.
The report said: “In the UK, 44 per cent of under 65s see people living for longer as a problem, while 31 per cent see it as a benefit to society.
“For those aged over 65, 50 per cent see increasing longevity as a problem while only 28 per cent saw it as a benefit.”
The report also highlights concerns that the UK isn’t prepared to cope with increasing demands on its healthcare systems and social services as a result of the ageing population.
The report says: “Of those aged under 65, 71 per cent of respondents in the UK don’t think our healthcare systems will be able to cope, compared with 81 per cent of people aged over 65.
“The numbers concerned about social services coping were 62 per cent and 73 per cent for the two UK age groups respectively.
“We are starting to build a picture of increasing longevity being viewed as a problem, with younger people more concerned about higher pension costs; and older people highlighting the need for a change in attitudes towards the elderly.”
The study found that Europeans are more focused on taking steps to ensure they have the financial resources to enjoy a longer life.
It said: “It is strikingly obvious that the household savings ratio, the percentage of disposable income that is saved or invested, is much lower in the UK than in other European countries. This is a huge concern, especially as workplace pension guarantees have been scaled back over the years and the state pension is under pressure with further changes likely; including increasing the age at which it can be claimed.”
According to Chase de Vere, the household savings ratio in the UK in July 2016 was just 5.1 per cent, compared with 9.7 per cent in Germany and 12 per cent in Austria.