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UK Heading for Pensions ‘Dark Age’

UK Heading for Pensions ‘Dark Age’

Heading for Pensions “Dark Age”

Pensioner poverty set to rise with 64 percent of UK workers
looking to rely on state pension in retirement as occupational pension scheme
membership falls UK comes out ‘bottom of the pile’ in G7 for state
pension provision.

State pension provision in
the UK
lags behind its G7 counterparts and needs to be reformed in order to avoid
today’s workers living in ‘pensioner poverty’, research from AXA reveals.

In the UK, the state
pension is worth just 31 percent of the nation’s average earnings, less than
half that of the Italians who retire with a state pension worth 68 percent of
average earnings. Despite this, research from AXA found that some 64 percent of
residents intend to rely on their state pension in retirement as more and more
workers move away from occupational pension schemes.

Steve Folkard, Head of
Savings and Pensions Policy at AXA said: “There has to be a concerted,
co-ordinated effort to make sure that people are adequately provided for, or we
will inevitably be faced with a pensions dark age.”

Recent research,
commissioned by AXA showed that 64 percent of people will use only the state
pension to support themselves in retirement, while almost one in five (18
percent) of 25-34 year-olds believe equity in their house will support them in
later years, something that may not be possible if the stricter lending
criteria comes into force and mortgages are harder to come by. With the housing
ladder potentially becoming even more difficult to jump on, just seven percent
of 18-24 year olds believe they will have any equity to support them in their
later years.

The ‘buy now pay later’ culture of the ‘noughties’ has left almost a quarter
(23 percent) of people believing they will still have to pay outstanding debts
in their retirement (excluding mortgages) with almost one in five believing
they will still be paying for their home (18 percent). 44 percent of people
believe they will be able to dip in to savings in their retirement, however
with a reduction in average savings seen recently, they may not be left with
the financial cushion they are expecting.

28th October 2009

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