Stuart Price, Partner and Actuary at Quantum, warns that today’s workers may never see the pension privileges afforded to those retiring this decade: –
“If you were born before 1960, chances are you’re either retired or are thinking about it. It’s also highly likely you have been a member of an employer’s defined benefit (DB) pension scheme for a significant period of your working life and can look forward to a relatively comfortable retirement. Unfortunately, this comes at the expense of the younger generation.
“While DB schemes were once the norm, they are now on the decline due to the spiraling costs to employers to fund these arrangements as we continue to live longer. These types of pensions are being replaced by defined contribution arrangements for the younger generation. Unfortunately, many employers can’t contribute much to DC arrangements because they are struggling to pay off the huge deficits caused by their previous DB schemes.
“The intergenerational gap doesn’t stop there. As well as less generous private pensions, the younger generation will also have to work longer as the State Pension age gets increasingly higher.
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