J. Swaine and H. Watt
Daily Telegraph, Aug. 2nd 2010, p.1 + 4
Mr David Pitt-Watson, a whistleblower and senior executive at Hermes Fund Managers, has revealed that a range of hidden charges and levies typically wipe more than £100,000 off the value of a middle class saver's private pension. These practices mean that British savers are retiring with pension pots worth 50% less than some of their European counterparts, despite having invested the same amount of money.
(For comment see Daily Telegraph, Aug. 2nd 2010, p.16)
A.Cerny, D. Miles and L. Schmidt
Journal of Pension Economics and Finance, vol. 9, 2010, p.393-420
This article examines the effect of changing demographics and changes in pension arrangements in a model that includes housing as an investment asset and a consumption good. It finds that pension reform has a significant impact on the demand for and price of housing in the UK, and suggests questions for further research.
Daily Telegraph, Aug. 12th 2010, p. 1 +4
The total number of people over 65 still working has risen to 823,000, twice the level of a decade ago. The figures suggest that thousands of pensioners have to return to work to raise their income, or that they cannot afford to retire. Others work beyond the age of 65 to help support their children or grandchildren.
R. Prince and A. Porter
Daily Telegraph, Aug. 5th 2010, p. 1 + 2
Official figures show that the current ratio of four working adults for every pensioner will fall to three by 2020 and two by 2040. Life expectancy is now increasing sharply, with boys born in 2010 predicted to live to 89 and girls to 90. This rapid population ageing means that it is no longer viable for workers to retire at 65 and enjoy decades without work. This article predicts that the retirement age could be raised from 65 to 66 as early as 2015 for men and 2019 for women in order to ease pressure on the public finances.
The Independent, Aug. 17th 2010, p. 24
A report by Aon Consulting has found that pension pots have continued to shrink for the last month, leaving the average 65 year old with £7,666 a year, half the amount they need for an adequate standard of living in retirement.
Daily Telegraph, Aug. 22nd 2010, p. 2
The Pensions Policy Institute (PPI) has said in a submission to the Department for Work and Pensions review of the retirement age that it is unfair and too expensive for workers to retire at the same age as those born decades before them, as life expectancy has increased substantially. To keep the costs of the state pension down to 2000 levels, the pension age would have to rise to 68 by 2030. To return expenditure to 1981 levels, it would have to rise to 72. The PPI also warned that poor people do not live as long as the rich, and therefore the government should provide higher pensions for them.
The Independent, July 29th 2010, p. 6
Pension minister Steve Webb has admitted that the basic state pension of £97 per week is 'not enough to live on', confirming government plans to raise the retirement age to 66 earlier than planned and adding that currently up to 7m people fail to save enough money to meet their retirement aspirations.
Association of Consulting Actuaries
Under laws introduced by Labour, employers will have to enrol all their staff in a company pension schem from 2012, unless workers specifically opt out. However, companies will only have to contribute the equivalent of 1% of a worker's salary, rising to 3% in 2017. This survey shows that 41% of Britain's largest employers expect to cut their contributions to the pension pots of existing members in order to cover the costs of enrolling millions of new workers. Employees will therefore be forced to increase the contributions they make from their wages to protect the value of their pensions.