04 Feb, 2013
UK families to pay £1,600 a year to fund ‘unaffordable’ public sector pensions
It has never been more apparent that the ‘unsustainable’ public retirement pots of state employees are being subsidised by the taxpayer at an unaffordable level.
According to a report by the Centre for Policy Studies, pensions for state employees could be costing the country more than £41?billion by mid 2020, which could see families forking out more than £1,600 a year to fund these costs.
Meanwhile, the report thus calls for a total reform that stops the inter-generational injustice, in which young workers are paying for the older generation’s pensions at the expense of their own provision.
CPS director Tim Knox commented that, ‘We are living well beyond our means’. The idea that taxpayers should pay £41?billion a year to cover the costs for the pensions of public sector workers, is ‘economic madness’.
Recently, the UK Government announced plans to simplify the state pension system - a move that would make no distinction between higher rate tax payers and the lower tier, with retired workers getting a single payment worth up to £144 a week.
If you wish to learn more about planning for your own retirement pot through flexible savings schemes, speak to a deVere Financial Adviser today.
Over-50s ignorant of retirement prospects
Britain's over-50s are in ‘blissful ignorance’ of how little their pension pots will pay out and are thus ‘sleepwalking’ into old age with little or no chance of retiring comfortably – the latest pension report shows.
The National Association of Pension Funds warned today that workers on the brink of retirement need to boost their pension by almost 80% in order to meet their retirement expectations. The Association plans to raise alarm about the generation of workers who have little idea how much is in their pension, how much it will pay them when they retire and how long (or little) the money will last.
NAPF chief executive Joanne Segars explained how a third of workers aged 52 to 64 remain ‘ignorant’ about what their private pension income may provide in retirement, while 59% of workers have never thought about how many years of retirement they need to finance.
This is particularly worrisome when one considers the fact that women in their 50s are living to an average of 88, while men are living to 85, overshooting life expectancy by around two years - when compared with national projections of life expectancy.
Meanwhile, annuities, which many British retirees buy to ensure a steady income are becoming more expensive.
‘It is worrying that so many over-50s are sleepwalking into their old age and are expecting to be better off than they might be’, Segars added.
If you wish to learn more about planning reasonably for your retirement, speak to a deVere Financial Adviser today.