UK, US, Australian citizens struggle with retirement plans

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13 Oct, 2017

UK, US, Australian citizens struggle with retirement plans

People in the United Kingdom, United States and Australia are finding it increasingly difficult to prepare for retirement due to growing demands for them to manage their own risks, according to a new international actuary survey.

In a statement, Ted Goldman, senior pension fellow with the American Academy of Actuaries, said: "Many people start planning but can't follow through because they aren't equipped to address complex questions like how much they need to save for retirement, how they will cover the risk of an especially long life, or how they will handle unexpected costs associated with chronic health conditions as they age".

Mr Goldman added that policymakers need to support education initiatives to help retirement savers.

The report showed that just over half of all participants in the survey of working-age people age 18 to 64 feel prepared for retirement, with longevity being the least understood.

The survey published on Thursday by the American Academy of Actuaries, the Institute and Faculty of Actuaries and the Actuaries Institute of Australia, concluded: "Only about one-third of the respondents know how long their assets will last in retirement, and about half have planned for the possibility of a longer-than-expected life".

All three countries are moving away from defined benefit pension schemes. The UK has a higher percentage of its population over 65 and a smaller proportion of that group (21%) employed than Australia, with 25% still working, or the United States at 30% respectively. However, the UK spends a similar proportion of its gross domestic product on benefits for its older population as does the US, and noticeably more than Australia.

In addition to targeted financial education, the report also recommends increased use of default features in private retirement plans, whilst ensuring that public pension and social insurance systems are sustainable and adequate.

Today's earlier news - UK bank Aldermore in talks over possible takeover