A pension age rise being discussed at the Treasury in a bid to raise billions of pounds underscores why we must take greater personal responsibility for our own finances, warns the CEO of one of the world’s largest independent financial advisory, asset management and fintech organisations.
The warning from the chief executive and founder of deVere Group, Nigel Green, comes as The Telegraph reports that workers who are now in their mid-50s could expect to wait an extra year before receiving their pensions.
The retirement age is set to increase to 67 by 2028 and 68 by 2039. But ministers are said to be considering bringing this in as soon as the mid-2030s.
A government spokesperson, in response to the media reports, said: “No decision has been taken on changes to the state pension age. The review will be published in early 2023.”
The deVere CEO comments: “The Treasury would raise tens of billions of pounds by hiking the pension age.
“Despite it being a politically tricky manoeuvre – as the Conservatives typically do well from older voters – the country urgently needs to find the cash to plug the massive hole in public finances.
“As such, we expect that the government will almost inevitably raise the pension age.
“Successive governments have shown that they see Britons’ pensions as easy ‘low-hanging fruit’ they can raid or tweak whenever they deem it appropriate. This is unlikely to have changed, especially in light of the scale of the issue.”
He continues: “Politicians are shying away from telling the public the unpopular, voting-jeopardising truth: retirement finances are increasingly a personal responsibility.
“It’s becoming clearer that governments won’t be able to support and provide for its citizens as it has done for generations before due to an ageing population and shrinking workforce; weaker economic growth; rising living, health and care costs; less generous company pensions if they exist at all; and the fact we’re living longer, meaning that accumulated funds need to go further.”
How much you will need to save for your retirement is a very subjective issue. It will depend on a variety of key factors, including your current age, at what age you want to stop working, how much income you will expect in retirement, what your retirement aspirations are, whether you are due inheritances, and your current personal financial circumstances, amongst many others.
Nigel Green concludes: “The government, we believe, will raise the pension age sooner than had previously been thought.
“But the fact of the matter is that we, as individuals, need to take our retirement financial affairs into our own hands if we are to have the living standards of our working lives in retirement.”