Pensions are a costly problem – and we need to talk about them
The pensions system has fallen under the gaze of the Institute for Fiscal Studies, and not before time.
Retirement is a vexed subject and little discussed in the UK, where there has always been a feeling among policymakers that a higher birthrate than most developed countries and buoyant levels of immigration – almost exclusively of working-age people – meant Britain was immune to a global problem with ageing.
While a high birthrate was once a feature of the UK’s population statistics, the destabilising impact of the 2008 financial crash and government austerity since 2010 has persuaded many couples to have fewer children or remain childless. The pandemic has only made the situation worse.
After a post-Brexit-referendum slump, immigration has soared in recent years, but many of the incomers are Ukrainian or Hong Kong Chinese people and the length of their stay looks uncertain. So the UK can look forward to a dwindling number of workers supporting a growing number of retirees.
As the IFS said in a report last week explaining why it was embarking on a review of pension finance: “At the current state pension age of 66, on average men are currently expected to live for another 19 years and women for another 21 years, so the consequences of having underprovided for retirement can be substantial and have long-lasting effects.”
A government minister might be forgiven for rejecting the claim that the subject is little discussed. Haven’t ministers spent large amounts of energy and cash making sure pensioners can cope with the costs of 21st-century living?
It is certainly true the government has sought to protect pensioners’ finances. Figures from the Department for Work and Pensions show that £151bn out of £254bn-worth of welfare
Read more on theguardian.com
