Thursday, 24 June 2010

Work till you drop!

It looks like we're all going to be working a lot longer than we thought, before we can claim for a state pension.

The government announced radical plans today to raise the retirement age from 65 to 66 for men by 2016. There's also a very real chance it could go up further to 70 at some future date.

I have to admit the thought of doing a full time job at the age of 70 really doesn't appeal to me and I never thought I'd ever have to work at that age.

None of the proposals surprise me, as we all need to be more honest and have this debate about pensions. We need to look at how the state can realistically afford to provide for so many older people.

I was reading some stats in today's Evening Standard which said 25% of boys born today will live to be 100 years old!

We already have over 10 million people over the age of 65 and this number will keep on growing.

When the retirement age of 65 was introduced in the 1920's those people that reached that age on average didn't live many years beyond it.

Nowadays 65 doesn't even seem to be old anymore, and for many people they could still have another 15 - 20 years ahead of them. When you take those sort of facts into consideration you have to ask how can we afford it?
The pension problem is one that's a serious issue for many Western European countries. They all have growing older populations but with decreasing work forces. You can't escape the fact that someone has to pay for all these things.

What needs to happen is that people need to have a new mindset when it comes to pensions and this needs to start from a very early age. Ideally as soon as people leave school or university.

In France today there were demonstrations in Paris against the French government’s proposals to increase their retirement age from 60 to 62.

For them being able to retire at 60 is like a human right, and challenges their way of life.

Although I respect the French for the way they have this very firm idea of what being French is all about, I can’t help but feel that they need to get real and accept that some of the old expectations no longer exist.

I've already got to the stage, where I except that when I reach retirement age, I can't realistically rely on the state to provide for me, and I have to start making provisions now. It probably means I will have to work beyond the age of 65.

The argument against rising the retirement age is that many poorer people will suffer as they will need to work longer just to survive.

For me it doesn’t matter what background you’re from or how much money you earn, you’ve got to start making some sort of provisions for yourself. There surely must be a limit to what the state can realistically spend on state pensions.

One group of people I do have sympathy for is young people. They could have huge problems in the next 20 – 30 years. For example, all those people who go to university and leave with thousands of pounds worth of debt from student loans. This will have to be paid back during their working lives.

There may not be the jobs out there for younger people, especially with older people continuing to remain in work, because they can’t afford to retire.

On top of that, there’s the pressure of buying property and getting on the property ladder, which is beyond so many people on average salaries.

Before you can buy a house you need to save for a deposit and on top of that financial experts will tell you that you need to build up a pot of savings for a rainy day and for your future retirement.

It's going to be impossible for so many people, both from working and middle class backgrounds to seriously save enough money for retirement whilst dealing with the financial demands of day-to-day life.

I’m quite glad this news story has come up as it is something we all need to think long and hard about.

We all need to start thinking differently about what the state can provide and what we as individuals need to do to provide for ourselves.

The old certainties of old age and retirement have gone, and they won’t be coming back.

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