State Pension Could Be Extinct In 30 Years Say MPs
A recent poll of 100 Members of Parliament found that 1 in 6 MPs believes that the State Pension will be gone by 2044.
With Britain’s population aging rapidly, the cost of the UK’s State Pension is set to quadruple over the next six decades according to official figures released in October. You would expect few people, therefore, to believe that the UK State Pension will stay just as generous in the future, but you might not have expected 15% of MPs to say that they believe the UK State Pension will be either gone or “considerably” reduced in three decades time.
That is exactly what a recent poll of 100 MPs found, however, and the results put the future of the UK State Pension – which currently stands at £113.10 per week for those reaching retirement age with a complete National Insurance contributions record – in severe doubt.
A flat rate State Pension is set to come into force from April 2016 onwards, replacing the current more complicated system, and this new flat rate State Pension will reduce the cost of supporting Britain’s elderly population over the following years.
That cost could be forced to come down further, however, if the fears of some MPs are realised and further cuts to the real cost to the UK of the State Pension are needed.
The poll was a “representative” survey and made up of 41 Tory MPS, 52 Labour MPs, 6 Liberal Democrat MPs and one further MP from another anonymous party. The survery – commissioned by auto enrolment provider NOW:Pensions and carried out by YouGov – found that Labour MPs were more optimistic about the future of the State Pension than Conservative MPs.
The research also showed that MPs in general believe that the State Pension age will be 70 by the year 2044 - quite different to recent outlines from both the Conservative and Labour parties which have announced their plans to set the State Pension age to 69 by 2049 and 68 by 2046 respectively.
That the recent poll sees MPs expecting an increase in the State Pension age to 70 as early as 2044 should worry younger savers.
NOW:Pensions chief executive Morten Nilsson warned that: “With the future of state provision so uncertain, it’s never been more important for young savers to take control of their own pension saving and put aside as much as they can to help protect themselves against an uncertain future.”
He continued: “Auto enrolment has a key role to play in plugging the savings gap but MPs agree that contributions need to rise beyond current levels to give Generation Y any chance of an adequate retirement.”
Auto enrolment could well be the saviour of future pensioners if it helps people to start saving more and earlier. For more help understanding auto enrolment, check out our auto enrolment advice page.
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