Thinking of Retiring? Forget it!

But that was all before billions were paid to shore up our banking system and the next Government, of whatever hue, is going to have to deal with a massive black hole in the country’s finances. Pensions are one of the biggest problems (and don’t get me started on workplace pension schemes – a topic for another day!).

It was perhaps inevitable that the day of reckoning for state pension age was going to come sooner rather than later.

Ultimately, the one thing we all fear is an impoverished old age. Depending on the State to provide us with anything other than the most basic provision is simply unaffordable, and the UK is not alone in facing what has been called the ‘demographic time bomb’. As medical knowledge improves, we are all living longer - and someone has to pick up the tab for pensions which keep us for perhaps 20 or 30 years AFTER we retire.

In 2005, Lord Turner (now the Chair of the Financial Services Authority) recommended to the Government that the state pension age had to rise if we were going to be able to provide any sort of halfway decent pension. He has now been quoted as saying that if he was writing his report today, he would be suggesting a retirement age of 70, and within the next 20 years or so. The word on the street is that he will be asked by a future Conservative Government to review the state pension system again. I’m not taking bets that he would move away from that position!

And the lesson to take away from all this? Don’t depend on the State to provide you with a comfortable old age. If you have access to a workplace pension (with all their faults) take it, especially if your employer is paying a contribution on your behalf. Failing that, start saving for that long rainy day…

Jennie Kreser specialises in occupational pension schemes, advising employers and trustees of pension arrangements in this highly complex and important field of law.  For expert advice, call Jennie on +44 (0)20 7749 2700 or email jik@silvermansherliker.co.uk.