Speaking in response to a report published by the UK’s Pension Policy Institute last week, which warned that “gold-plated” pensions for private sector workers will crash to an “all time low” in 2020, Green said the UK government must do more to promote engagement in financial planning for the “good of the individual and the country”.
“Politicians are shying away from telling the public the unpopular, voting-jeopardising truth: finances are a personal responsibility – and increasingly so as our cash-strapped country simply cannot afford to provide for its citizens in the way it has done in the past,” said Green.
“Last week’s PPI report confirms that defined benefit schemes are consigned to the history books and that defined contribution schemes, which an increasing number of people will be automatically enrolled in, are considerably less lucrative and have ‘inherent uncertainties’.
“In addition, the economy is in recession, savings rates are frozen, job insecurity is widespread, and mortgage rates and taxes are increasing.
“But households can greatly diminish the horrors of the pensions crisis and the wider volatile global economic situation by seeking professional financial advice.”
The PPI report found that around half of today’s over 50s, living in the UK, will have to save more and work longer if they want an “adequate income in retirement”.
To quantify this, the PPI said 50% of over 50s might have to work for between six and 11 years, or more, beyond their state pension age to replicate the living standards of their working lives in retirement.
Commenting on the findings, PPI director Niki Cleal, said: “In the last three decades, life expectancy has increased dramatically in the UK. On the whole this is good news for individuals, but it also means that many people will need to save more and work longer if they want to have an adequate retirement income.”
