The gap between well-off pensioners and those reliant on dismal state pensions is widening further following the latest news that one in four people will be reliant on the state by the time they reach retirement age.
Research by Prudential has highlighted the need for the UK population to think about saving for their retirement schemes sooner rather than later after it was discovered that 80 percent of final salary schemes are now closed to new members. However, despite this, those looking to retire this year are likely to be giving up work earlier and living comfortably on their generous private pension.
The Prudential Class of 2008 Retirement Report, the first major study of people retiring in a specific year, shows the average age for men to give up work is 60 while women are retiring at an average 58 compared to statutory retirement ages of 65 and 60.
Furthermore, despite widespread concern about the UK’s pension crisis, people retiring next year have, in many cases, never had it so good. Prudential's Retirement Insurance Director, Ali Crossley explains: “People retiring next year are in general entitled to think ‘What pensions crisis?’. On average they are giving up work early and can look forward to final salary schemes having worked hard throughout their lives.
“That is good news which is not often a phrase associated with pensions. However every silver lining has a cloud and with pensions it is never hard to find another side. Those of us coming after the Class of 2008 will perhaps not be so lucky unless we take action to plan for retirement."
Prudential's report is likely to be disputed by the 125,000 workers who have lost their pensions after the firms employing them went bust between 1997 and 2004.
Victims of one of Britain's biggest pension scandals yesterday began an all-night vigil outside Number 10 to draw attention to their plight after their five year campaign has gone repeatedly ignored by the Government. The situation of the pensioners has drawn criticism in the wake of the Northern Rock crisis, which saw the Government race to the aid of the predominantly middle-class account holders and offer full compensation for any loss of savings.
In addition, this July, the Government neglected to pass amendments to the Pensions Bill that could have seen the pensioners compensated. Speaking to reporters, former Government adviser and backer of the campaign, Dr Ros Altmann, said:"The Government said it could not spend taxpayers' money on providing compensation. It is now November and the victims are still waiting. Meanwhile, investors in Northern Rock have been rescued in full, at once, at taxpayers' expense."
While The Young Review, an investigation into the pensions scandal, is currently being carried out, the results aren't expected to be in before January 2008, leaving thousands unsure about their futures. One possible measure being considered to help the pensioners will be the option of pooling the crashed firms' assets to form a superfund that could be used to boost the pensioners' cheques.
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