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 last week that the perception in Australia has changed and individuals und-erstand the need to fund themselves in retirement rather than relying on the state.
He said: “What we are seeing is a massive shift of risk away from the state and away from corporations to the individual. For 20 years now, Australians 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 have been able to capitalise on that and give advice where previously we might not have had the opportunity to do so.”
But he pointed to the ageing population as well as decreasing population growth as major problems, saying that in years to come the ratio of workers to retirees is expec-ted to halve.
He said as there is no enforced retirement saving scheme in the UK, there is a real risk of under-funded personal and state pension schemes and an overburdened welfare system.
Swanwick said: “Here in the UK, you have 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 is a really scary prospect as a population particularly as you are going to have an older population in years to come.”