Britons face massive pension gap

Britons are facing a £1.2 trillion pensions gap between what they think their retirement income will be and how much they will actually receive, research showed.

The average person needs to save £50,000 more during their working life than they currently plan to in order to obtain the pension they want, according to consultancy firm Hewitt Associates.

The group found that the average worker, who was aged 43 and earned £25,000, hoped to retire at 63 on a pension worth £15,300 a year.

But they are saving only 5.9% of their salary into a defined contribution pension each year in order to achieve this, meaning their pension is actually likely to be worth only around £5,900 annually in real terms.

Even once the state pension is factored in, people would still need to continue working until they were 70 or increase their pension contributions to more than 19% of their pay to receive their desired retirement income.

The group said the gap between the pension that people hoped to receive it and its projected size had soared by 50% during the past six years, with Britons facing a pensions shortfall of £800 billion when the same research was carried out in 2004.

Lynda Whitney, pension consultant at Hewitt Associates, said: "Saving for retirement is a major issue and one of the largest socio-economic problems to be faced by the new UK Government.

"This saving gap cannot be met through higher state benefits funded by taxing future generations as the proportion of pensioners is increasing relative to the working population.

"People need to wake up to the fact they will have to save more, work longer and/or live on a lower pension in retirement."

But when told about the shortfall they faced only 10% of people were prepared to retire on less than they had hoped, while just 27% said they would increase their contributions.

Press Association

Wise Owls Comes of Age

Last week I went to represent Wise Owls in Brussels at the AGE-Platform Europe annual conference.

It has been a long journey getting into AGE – as the membership historically was blocked at national level. This has been particularly true in the UK where Age Concern (partnered by Help the Aged) had an effected monopoly on members and excluded new applicant organisations. Now that we have been voted in as full members of AGE-Platform Europe, we are now able to be members of the UK branch of AGE.

I was welcomed by the Age UK representative (Age UK is the amalgamation of the old Age Concern and Help the Aged) and was pleased to be asked to attend the UK AGE meeting in October.

There is a need to democratise the national AGE networks, and we hope to help the UK open and welcoming to organisations involved in battling ageism across the UK, bringing with us our marketing expertise and commitment to democracy.

There is also a need to widen the participation of organisations in Age Projects and expert groups. There is currently only one representative per country in each group and we hope to push for specialists and experts in these areas to represent the UK at an EU level. We hope that we be able to join the expert group unemployment given our lead in roll in developing employment support for older working people.

It was exciting an simulating to be apart of the only main EU network representing older people and as a result we hope to both promote the work of AGE there projects, research and campaigns in the UK and hope AGE will be promoting our campaigns and best practise in employment and training to there 150+ member organisations spread across the whole of the EU.

Some comments on the make up of the conference:
1. There were only 2 non-white people attending the conference of nearly 150 people.

2. Despite the fact two-thirds of people over the age of 65 are women across the EU, only around 40% of the conference attendance were in fact women.

3. The vast majority of organisations who are members of AGE are made up of and represent the interests of pensioners. However, my plea for greater representation and emphasis on the needs of the older working age population (50-65+) were well received and I was able to network with other organisations across the EU who also focus on proving support to older working age people.

There were many calls/mine amongst them/ for there to be greater support in overcoming the high numbers and percentage of older working age people out of work. While there are considerable discrepancies in the situation facing older people in different EU countries, there was general agreement that older people are often excluded from the lists of the formally unemployed which has distorted the statistics on age and non-employment. This means that older people do not get there full unemployment entitlement and that older people non-employment is not regarded as a priority for government intervention and financial support. We hope to have both UK and EU campaign to start overcoming this problem.

The AGE membership there was a general feeling of outrage and the situation and treatment of older people and great worries were expressed about the impact of the coming economic criticise at the numbers of older people who were likely to face redundancy and consequent poverty.

Some of the individuals that I met who were both interested and impressive included representatives that were from – Malta, Finland, Holland, Sweden, Hungary, Cyprus, Slovakia, Slovenia, Spain, France, Italy and Ireland.

I’ll keep you updated on activities that arise from our membership of AGE and promote some of the key facts, research and campaign information coming out of Age-Platform Europe. Anyone wanting more information contact me by e-mail.