UK. Retirement: are pensions going to be much smaller in future?
Increasing life expectancy has seen the number of years in which people spend in retirement creep ever upwards. Using census data, the Office for National Statistics calculated that in 1981 a 65 year old man could expect to live another 13 years (17 for a woman). By 2011 this had increased by five years to 18 years of retirement (21 for a woman).
By 2050, more than 50,000 Britons are expected to reach 100, and it is now predicted that a child born today has a one-in-three chance of living to 100 years old. This is a sobering statistic for those saving for retirement, where rising life expectancy raises the likelihood of your savings running out before you die. It has also put the future affordability of the UK state pension under question.
To alleviate some of this pressure, in late March an independent review commissioned by the government, the Cridland Report, recommended that the retirement age rise from 67 to 68 by 2039, a full seven years ahead of schedule. A second report by the Governments Actuary’s Department (GAD) presented a scenario in which millennials – those currently under 30 – would only have access to the state pension when they hit 70 years old.
Full Content: IG News
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