The World Economic Forum has issued a dire warning which calls on the Government to impose faster pension age rises as it earmarks the UK as one of several countries facing a “pensions time-bomb”.
The Financial Times reports on analysis from the World Economic Forum which puts the UK pension savings gap at £25trn by 2050 if action is not taken soon.
The pension savings gap is defined as the shortfall between current retirement pots and the amount of money needed to maintain an income of 70 per cent of pre-retirement levels.
World Economic Forum head of financial and infrastructure systems Michael Drexler says: “The anticipated increase in longevity and resulting ageing populations is the financial equivalent of climate change.
“If increases in life expectancy were matched by corresponding increases in the retirement age, the challenge would be less acute.”
He added policymakers need to consider how to integrate 75 and 80 year olds into the workplace.
The analysis also calls for the £1m lifetime allowance to be scrapped, arguing it sends the “wrong signal” that there is a limit to pension contributions.
But Trades Union Congress policy officer Tim Sharp told the newspaper: “It’s clear the UK faces a huge challenge to ensure everyone has a chance of a good retirement, but it can be done.
“The way to tackle the UK’s retirement challenges is to build a consensus about a sensible way forward, not to produce alarmist reports.”