Dramatic evidence of Britain’s rapidly ageing population emerged yesterday as figures showed that the number of pensioners now exceeds those under 16 for the first time.
The landmark demographic shift promises a future of pension shortfalls, a greater burden on the NHS and steadily increasing retirement ages. The research, from the Office for National Statistics (ONS), was held up as proof of Britain’s failure to prepare for an era when the over-80s represent the fastest-growing section of the population. The nation’s make-up has shifted dramatically in 40 years.
We baby boomers were the luckiest generation ever. Free education, walk into a job, just-about affordable housing, final salary pensions, state pension at 60 for women.
This will never happen again.
What should the young do? Breed, breed, breed! And the ageing? Work, work, work! UK state pensions are changing for the worse.
The UK State Pension age is currently 65 for men and 60 for women. The State Pension age for women will increase gradually from 2010, so that by 2020 it will be 65.
The State Pension age for both men and women is to increase from 65 to 68 between 2024 and 2046, with each change phased in over two consecutive years in each decade. The first increase, from 65 to 66, will be phased in between April 2024 and April 2026; the second, from 66 to 67, will be phased in between April 2034 and April 2036; and the third, from 67 to 68, between April 2044 and April 2046″.
“Under the new Pension Credit scheme, the Department for Work and Pensions (DWP) admits that low earners will see their retirement income increased by only 1 per cent of their salary, or £2 a week, after 10 years’ saving in the Government’s flagship new pension scheme to be launched in 2012, because their savings are eaten away by means-testing.
Even someone earning £25,000 a year who contributes to the new Personal Accounts for 20 years will only see their income in retirement increased from 31 per cent of salary to 34 per cent.
Experts say the figures highlight the way Pension Credit, the means-tested benefit paid to pensioners with small pensions, reduces the incentive for many people to save”.
For pensionable salary earners, employers’ rush to switch from final salary to defined contribution schemes also transfers the risk to the employee and could leave millions badly short in retirement.
Less daunting predictions exist such as the quite respectable arguments in “The Imaginary Time Bomb: Why an Ageing Population is not a Social Problem”, by Phil Mullan I. B.Tauris. “Historically, modern societies double their wealth about every twenty-five years. This kind of growth, projected across the next half-century, would dwarf the extra pension and other costs to society of more elderly dependents. Moreover, it is far from certain that extra years of life mean extra years of ill-health and dependency. Serious disease tends to be concentrated towards the end of life, so living longer may simply postpone the point of onset, without increasing the costs.”
But few are plugging that line just now.
The Republic’s plans for individual savings accounts fare no better than the UK’s pension credit, according to an ERSI analysis
“The proposals for mandatory savings accounts would for the same level of contributions, produce pensions 20% lower than simply upgrading the basic state pension.
So tough times could be ahead for the young’uns and even for oldies, if they want to retire early.
But a lot can change in 10,20 30, years, so let’s be optimistic.