Are you relying on the State to look after you in your dotage?
It’s a fact. We are all living longer, and pensioners are notoriously hard to kill*, which means that pretty soon the country will be overrun with silver haired layabouts. Or will we? The current generation of pensioners are supposed to be the last of the cruisers, owing to their final salary pensions schemes and, unless they retired in the last few years, decent annuity rates. So what will happen when you, or I, get to retirement age? Will we ever be able to afford to retire or will we work into our graves?
My own State Pension age has increased three times and I am still young (ish). If the changes continue, I will be in my eighties before the Government coughs up a penny of my many thousands of NI contributions over the years. And given the increased number of pensioners there will be then, how much I will get is anyone’s guess- we all know that current employees are funding current pensioners- and if the oiks that make up the yoof of today don’t start earning some cash to keep me, I could be in retirement trouble.
So naturally I have made oodles of private pension provision with all that spare money everyone has lying around these days- why not just tie up the money you don’t have for another 40-50 years? No? But it's not just me- new research suggests that almost two thirds of people in the UK (65%) are relying on the State Pension to keep them when they are old.
The unbiased.co.uk survey also found that one in seven women were making no provision all in the expectation that their husband would keep them in retirement. Only 5% of men, on the other hand, were anticipating being kept by their wife’s provision. However, the survey also showed that those furthest from retirement, those under 35 and facing a retirement age of at least 68, are less likely to expect so much, with only 44% saying they would rely on State pension, compared with 84% of the over 55s. Only 4% of people thought the Government’s new semi-compulsory private pension scheme NEST would keep them.
But people are not completely ignoring their own advancing years. 47% of respondents said they had some private pension provision, and in line with reports of ISA popularity, 25% believe their ISA pots will be their main source of income in retirement.
Karen Barrett, chief executive at unbiased.co.uk said: "Planning for retirement is one of the most important things we can do to ensure we are financially secure in the long-term … but not every option is right for everyone and it is important to realise that simply relying on the state to provide for you is not going to be enough.”
While Karen probably has a vested interest in you turning to her for pensions advice, the fact remains that if you are planning to live off the State in your old age, you may want to start binge eating now, to build up a layer of blubber to see you through the long cold winters when you won’t be able to afford heating. Or food. Or possibly NHS healthcare…
* this may not actually be a fact. Bitterwallet does not condone geriatricide.