07 October 2015

The information contained within the following news articles have been pre published. The articles were published on the dates indicated and the information contained within these issues include references to taxation, legislation, regulation and other issues or concerns that may no longer apply

70 is the new 65


It’s simple demographics.  More of us are living longer.  Since 1971, the life expectancy of the average 65-year old in the developed world has improved by four to five years.

By 2050, it is expected that a further three years will be added onto that.  Until recently people have converted that extra living time into leisure time - in 2010, the average retirement age was 63, nearly one year lower than in 1970. But living longer and retiring earlier is only sustainable if the number of workers is increasing.  Declining fertility rates mean this is not the case and by 2050, the EU will have only around 1.7 workers supporting each pensioner.


The British government is already working on plans to raise the retirement age to 68 and there are stark benefits to be had from our doing so: the employee gets more years’ wages; the government gets more taxes and pays out less in benefits; and, the economy grows faster as more people work for longer. 


So what are the implications of this trend for your pension?  Final-salary schemes have been standard practice in the UK public sector, but the recent report by Lord Hutton puts forward some interesting suggestions for reform.  These proposals would maintain the accrued rights of workers, but would see future pension rights being based on state retirement age and on career average, rather than final salary.


Private sector workers face a different set of problems: the risk that falling markets will undermine their retirement planning; and, that they will outlive their savings.  To counter this, experts believe that the government should encourage workers to save more and opt in to pension schemes.  If in doubt, talk to Census Financial Planning today and see how we can help to maximise your retirement income.

Paul Nevin 

Business Development 

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