The UK government now needs to be honest with the public about a possible pension age rise being discussed at the Treasury, warns the CEO of one of the world’s largest independent financial advisory, asset management and fintech organisations.
The warning from the chief executive and founder of deVere Group, Nigel Green, comes as speculation grows that the government plans to hasten a rise in state pension age to 68 by 2035.
Men and women’s state pension age is currently 66, and between 2026 and 2028 it will rise again to 67.
But the government is reportedly set to announce an earlier-than-expected state pension increase to 68, possibly in the Budget on 15 March.
A Department for Work and Pensions spokesperson said: “The government is required by law to regularly review the state pension age, the second of which will be published later this year.”
The deVere CEO said, “Should, as we expect, the government hike the pension age to 68 in 2035, workers who are now in their mid-50s could expect to wait an extra year before receiving their pensions.
“The Treasury urgently needs to find money to plug the massive hole in public finances and by raising the pension, it would raise tens of billions of pounds.
“As such, we think it is almost inevitable that this is what will happen.”
He added, “This scenario underscores that the government now needs to come clean with the public.
“For too long they have been avoiding being honest about telling the unpopular, voting-jeopardising truth: retirement finances are increasingly a personal responsibility.
“It’s becoming clearer that the government won’t be able to support and provide for its citizens as it has done for generations before due to an ageing population and shrinking workforce; weaker economic growth; rising living, health and care costs; less generous company pensions if they exist at all; and the fact we’re living longer, meaning that accumulated funds need to go further.”
How much you will need to save for your retirement is a very subjective issue. It will depend on a variety of key factors including your current age, at what age you want to stop working, how much income you will expect in retirement, what your retirement aspirations are, whether you are due inheritances, and your current personal financial circumstances, amongst many others.
“The earlier you start preparing for your retirement, the easier and more effective it will be,” he affirms.
Nigel Green concludes: “With it being a perceived easy solution to finding tens of billions of pounds to fill the public purse, we expect the government will raise the pension age.
“This is a wake-up call that we all need to increasingly take more personal control of our retirement if we are to want to maintain the standard of living of our working lives in later years.”