Individuals need to take responsibility for their retirement savings rather than relying on the government for financial support, according to Australian financial planning firm Ellwood Barry McPherson.
EBM director David Swanwick said at the IFP conference in Manchester today that the perception in Australia has changed and individuals understand the need to fund themselves in retirement rather than relying on the state.
He said: “What we’re seeing is a massive shift of risk away from the state and away from corporations to the individual. For twenty years now Australian;s have been told ‘the government will not fund you in retirement and your corporation will not fund you in retirement, you will fund you in retirement’. So there is a national psyche now around the idea of sorting yourself out for retirement and making sure you take responsibility and that you get it right.
“And that has brought about some interesting opportunities for the financial planning community because we’ve been able to capitalise on that and give advice where previously we might not have had the opportunity to do so.”
Swanwick said as there is no enforced retirement saving scheme in the UK, there is a real risk of underfunded personal and state pension scheme and an overburdened welfare system.
He said: “Here in the UK you’ve got nearly half the population in terms of men and over half of the population in terms of women who have no pension provisions whatsoever. I think that’s a really scary prospect as a population particularly as you are going to have an older population in years to come.”