Pensions crisis could escalate into care crisisTuesday 23 November 2010
Pensions crisis could escalate into care crisis
The UK’s pensions crisis could well escalate into a care funding crisis unless the government gets to grips with the issue, says pensions expert Dr Ros Altmann, Director General of Saga. Dr Altmann will be delivering a keynote speech for the launch of the Westminster Business School on Tuesday, 23 November, 2010, during which she will outline her vision of what must be done to combat the pensions’ crisis facing the UK.
Dr Altmann has often voiced her views on pensions, recently with reference to the impact of low interest rates on pensioners, watch video, and how a pensions crisis could breed a care crisis, watch video.
“I believe radical pension reform is needed and, because part of the solution must come from longer working lives, age discrimination must be tackled, with employees given more help to stay in work longer. Without dramatic intervention the time bomb will explode, leaving a generation at risk of poverty, without pension provision, and increasing pressure on services and benefits,” said Dr Altmann.
But Dr Altmann also warns that as the pensions crisis has not been tackled the UK could face an even greater financial catastrophe – in care funding.
Dr Altmann warns that the demographic dangers are upon us, with the first baby boomers reaching 65 in 2011. And they are a generation resistant to planning for the future but who live much longer than previous generations.
*Latest research reveals one third of over 50s have no pension provision
*Company schemes are being closed and people are finding they get little or no pension from many pension funds
*Measures coming from Brussels could increase the crisis with over-burdensome changes to investment backing for pension funds and annuities causing pension values to fall.
The coalition government is introducing the National Employment Savings Trust (NEST) but Dr Altmann does not believe this is enough.
“We need radical state pension reform and social revolution to rethink our lives, with a re-evaluation of what 'retirement' should look like. Put simply, there needs to be more saving, and more working,” said Dr Altmann.
“So far the new government has expressed good intentions, now we need measures to back this up. As well as radical state pension reform there must be more help for the over-50s to stay in work - once they are out, they often stay out. In addition, HR departments need to be encouraged to manage their older labour force better after the ending of the Default Retirement Age. This means having sensible discussions with older workers about perhaps shifting to part-time work, assessing them on the basis of their ability to do the job, not their chronological age.”
To download a copy of the presentation please click here.
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