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By Mike Freer of BWCI
A READER said that they had read recently that pensioners would be worse off in the future than they are today and asked whether that was true.
It was recently announced that the UK Department for Work and Pensions is going to revive the Pensions Commission, which first reported nearly 20 years ago, to look at how to tackle “a retirement crisis that risks tomorrow’s pensioners being poorer than today’s”.
The department has also commissioned the next review of the state pension
age, which currently stands at 66 years old and is already scheduled to rise to 68 by 2046.
In Jersey, anyone born after March 1964 will have to wait until their 67th birthday to receive the States old-age pension. This date is under constant review and may be pushed back in due course.
Currently, to get a Jersey pension at the full rate (100%), you must have paid, or been credited with, a total of 47 years’ worth of contributions.
The UK government has warned that people retiring in 2050 will be worse off than pensioners today, unless action is taken to boost retirement savings.
Almost half of working-age adults are not putting any money into a private pension at all, with low earners and the self-employed less likely to be pension saving, the DWP said.
The shortfall is also worse among women and some ethnic groups, with only one in four people saving in a private pension.
People drawing their pension 25 years from now are due to be £800, or 8%, worse off per year than their counterparts today, the department said, with four in ten people currently not saving enough for their retirement.
