We’ve reported before that there are many experts who feel that the State Pension Age (SPA) could soon have to rise to 70, to help cope with our ageing population. The Office for Budget Responsibility is now predicting that by 2055 workers will have to work until they are 69. And the World Economic Forum (WEF) is predicting that the “pensions time bomb” in the world’s largest economies will rise from £54 trillion today, to £400 trillion within 40 years unless action is taken.
The Telegraph reports –
“Analysis by the WEF showed the six countries with biggest pensions – the US, UK, Japan, Netherlands, Canada and Australia – as well as China and India – the two most populous countries in the world – faced a retirement savings gap of $428?trillion in 2050, up from $67?trillion in 2015… In the UK, the current shortfall of $8?trillion is forecast to rise by an average of 4pc per year to $33?trillion in 2050… A study by the OECD in 2015 found that savers in the UK could on average expect the state to fund 38pc of their working-age income when they retired, lower than any other major advanced economy… Across the 35 major economies in the OECD, the average was 63pc. But while the think tank has praised the UK Government’s shake-up of the pensions system, which is now linked to life expectancy, it described the notion that it had found a “beautiful balance between affordability and sustainability [as] some sort of Panglossian fantasy”… Many are not saving enough into private pension schemes, it warned.”