Not surprisingly, it is the oldest pensioners (those aged 75 or over) who suffer most from not entering retirement with an adequate and sustainable level of income.
It is noteworthy that over the last 30 years the financial position of retired households has improved, again probably in the main because of the growth of private provision and in the case of the poorest pensioners in recent times because of the undoubted value as a proportion of their income of pension credit.
However, can we be confident this trend will continue over the next 30 years? As things stand now, pensions are in the doldrums. Employers in the priPrivate saving generally is in decline, with many individ-uals seemingly unaware or uncaring about the consequences and seemingly sleep walking into an uncer-tain old agevate sector are continuing to close down high quality defined-benefit schemes and replace them with often very inferior alternatives.
Private saving generally is in decline, with many individuals seemingly unaware or uncaring about the consequences and seemingly sleep walking into an uncertain old age
Private saving generally is in decline, with many individuals seemingly unaware or uncaring about the consequences and seemingly sleep walking into a very uncertain old age. Even the hitherto much valued public sector pensions are now coming under attack.
The Government has a stated intention to re-invigorate pensions and we must hope it is successful in doing so. The best thing they could do is to increase the state pension to a level at which pensioners can live comfortably and those planning their retirement can be encouraged to put their savings into private pension arrangements confident in the knowledge that they will not lose out on means-tested benefits as a result.
With hundreds of thousands of baby boomers coming up to retirement over the next few years, adding to the cost of state provision, that may not be possible to achieve in the short term and other measures may have to be set in train.
In the meantime, it does not help when the deputy gov-ernor of the Bank of England is quoted as saying he would prefer people at the present time to spend, not save. In the context of our looming pension crisis, that is hardly the message the pensions community and those it serves really wants to be put out, is it?”
Malcolm McClean, Partner, Barnett, Waddingham