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Changes in pension schemes will affect millions of people, with a cut of £43million expected. The fall in pension funds is being blamed on significant factors such as people living longer, leading healthier lives and quitting smoking. Men’s increased lifespan was blamed for 80% of the decline.
Research undertaken by the Pensions Protection Fund, revealed that the pension system could collapse under the strain of millions of people living longer lives. Some schemes could falter following collapsed investments, which won’t make enough money to profit claimants. The private sector may suffer extensively, with employees being hit by expensive plans and higher taxes – used to fund pensions for public sector workers. Model your investment strategies by using a retirement calculator.
According to PPF figures, there are 6,533 defined benefit pension plans in the UK at the moment, which had a collective surplus of £2.3billion at the end of April, a massive drop from the £45.5million it had in March. If the alterations had not been made, the number would have been vastly different, putting pension funds in the black by £37.2million.
Total value of schemes rose by 1.5% to £1.001trillion on the back of stock market increases. Economist Dr Ros Altmann, general director of Saga was quick to warn the public that they should start saving as soon as possible, and in larger amounts. Ms Altmann commented that; ‘Pension planning in the UK is not realistic. The Government has not factored in enough ‘what if’ scenarios like the number of people living longer.’ She was concerned that people were also retiring too soon, and that there should be a clearer, more public explanation of what they need to do to prepare for the future.
Chief executive of the National Association of Pension Funds, voiced concerns that the higher life expectancies will put too much pressure on final salary pensions – causing more and more employers to dispose of them in favour of a more affordable scheme. Usher your retirement and plan your lifestyle with pension retirement calculator.
“The UK is simply not saving enough for its older age, and these days retirement can easily last over two decades. People will not have the means to live a decent lifestyle in old age.”
In the last fifty years or so, the life expectancy after retirement for men has almost doubled in length, and is only expected to increase. In addition, pension schemes were in surplus at the end of April, with schemes facing a £71.3billion shortfall, a rise of £50.2billion at the end of March.

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