A financial expert has urged the Government to deal with the UK’s worrying retirement problem now the election has been decided.
Andrew Oxlade, Director at Fidelity International, stressed that rising pension ages across the nation have shown no sign of stopping and should be ‘dealt with imminently’ by new Prime Minister Keir Starmer.
Right now, state pension age sits a 66 years old for both men and women. But plans set in law indicate a jump to 67 between 2026-28, with a further push up to 68 by 2046.
Given its highly sensitive nature, Oxlade expressed his surprise over the issue’s mild reaction from the British public, yet he anticipates it may be at the forefront of discussion in the coming months.
“Consider, for instance, the violent pensions protests that have repeatedly erupted in France and the Russian demonstrations of 2018,” he said.
“The reason this issue may return to the headlines in the UK in the coming months is because a decision to accelerate the rises was delayed ahead of the election but will need to be dealt with imminently.”
Oxlade’s thoughts come amidst a chorus of experts raising alarm bells over the sustainability of state pensions. Earlier this year, the International Longevity Centre (ILC) claimed that pension age may need to rise to 70 or even 71 by 2050 to remain affordable.
This comes against the backdrop of growing pressures on government finances which could exacerbate ‘demographic imbalances’ and widen economic inequalities in the nation if left unchecked, the ILC warned.
Oxlade points out that the UK’s increasing life expectancy and the Government’s ‘triple lock‘ legislation are two factors adding to this strain. The latter is a policy aimed at shielding pensioners from inflation changes.
He continued: “As a result [of the triple lock], State Pension payments have grown relatively quickly over the past decade. The bulge in Baby Boomers reaching retirement further increases the cost pressure.
“…The primary ways to mitigate this are either slower rises in the State Pension, which would involve watering down or abandoning the triple lock, or to increase the age of State Pension eligibility.”
Aside from this, Oxlade has urged the public to start thinking about their pension early. Contributing to a company pension or using private pensions is a good place to start when it comes to saving money.
“It is important to take control of your pensions, to get a holistic view – and to have a plan,” he added.
