The Urgency of a Pension

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Industrial economies around the world are presently in the process of restructuring their economic models and projections in order to address the consequences of an ageing population; a large number of which is ageing within a period of transition whereby a combination of science and medical advancements are enabling the average person to live far longer. With men expected to live to the age of 89 by 2050, and women to their early 90’s, by then it is anticipated that 47% of the population will comprise of retirees.

As is often the case today, these present-day issues have considerable implications on public spending, since many of the present generation retiring do not have the savings to fund their retirement. This would ordinarily lead to an excessive burden being placed on public revenue, and if not offset in some manner would inevitably see the UK budget experience some detriment. Consequently, this would result in an substantial impact upon the economy as a whole.

In response to this dilemma, the government has the task of devising solutions to provide for the future of the UK economy, and so there have been legislative amendments, the introduction of new legislation and tax incentives, and a wide range of support services to provide information to those that are affected by these changes.

Quite simply, the government has a responsibility toward pensioners of today and those of tomorrow, but that responsibility is to be shared by the individuals themselves, employers and also government. Any other balance simply would not be sustainable, equitable or justifiable.

Pensions are not a new development: the have existed and been quite accessible in a variety of areas since 1908. Often employers will offer a pension scheme, and on occasion the employee is able to get certain contributions to the scheme matched by their employer. These contributions have routinely been treated by the tax office with favor and encouragement, by allowing tax free incentives to apply, and then qualification for a State Pension on retirement. The projected income that is derived from these schemes may not always be anticipated as enough for the future pensioner to retire on, particularly since employers tended to withdraw from these obligations in light of the ageing population, and due to 70% of the baby boomers generation of the 1940’s and 1950’s whom are currently employed. Since by the age of retirement mortgages are normally settled, it is not possible to obtain remortgage advice in order to possibly release equity for retirement.

While it is both a personal choice of lifestyle and priorities, and future accumulated sums and returns are only able to be estimated at best, this remains one of the most principal issues significant to all UK citizens and therefore it is only right that it commands both introspection and consideration. For any further financial information, please click here.

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