I was reading the recent survey completed this month by Standard Life which has revealed the concerns people have about their State Pension. It has definitely confirmed my own concerns on the future and sustainability of the State Pension.
When asked the question, “Do you feel confident that the Government will pay you the same level of today’s state pension when you retire?” the responses were;
• 71% expressed they are not confident, only 13% are confident and a further 16% don’t know.
• The most confident group where those aged over 65.
However only 25% of this age group expressed confidence even though this age group is closest to retirement age.
• The least confident group are those aged between 45 and 54 – only 7% of this group is confident whilst 78% are not confident
It’s no surprise that people feel like this when you look at the state of the economy and whether the exchequer can continue to pay the State Pension at the current rate along with all the other costs and cutbacks.
For me this confirms what we have been saying for a long time:
•You must ensure that you are not dependent on just the State Pension
1.You need to take responsibility for your own retirement fund
2.Do not depend on others to help you
3.Take advantage of the very generous tax breaks on Pensions
4.Ensure that you select Funds which are suitable for your situation
One of the areas that would make pensions more attractive is to make them more flexible. In the same survey – nearly half of those surveyed said they would save more into a pension if they could access some of the fund before retirement. Interestingly this feature was most likely to appeal to younger people. 60% of 35-44 year olds said they would save more into a pension if they were more accessible.
More than one in four expect to retire at age 70 or more.
When asked what age people think they will retire,
• The average expected retirement age is 65.1.
• More than one in four (26%) expect to retire at age 70 or more.
• Only 9% expect to retire before they reach 60