Politicians Fail To Warn The Public Of State Pension Limitations
Millions of state pensions will fall short of people’s expectations.
Research conducted by life insurance and financial services company Prudential has revealed that a minimum of 1 in 7 people will rely largely on the state pension in retirement, having made little in the way of further pension provision.
This research leads to concern from those within the industry who identify that the state pension will provide less than is expected by the average worker. The latest changes of pension age equalisation and the Cridland report, which could recommend further age rises for when a person can retire point towards a reduction in what the state pension offers.
Tough Political Message
The lack of the public’s understanding on the matter has been put down to politicians reluctance to state unpopular facts. Telling people that the state pension will not pay for the lifestyle they imagined and that they will have to work longer before receiving it could lead to a backlash that politicians are fearful of.
Workers Need To Seek Independent Financial Advice
A misguided belief that the state pension will cover all the costs retirees will be faced with is seen as a major problem. Getting sound independent financial advice now can give workers a more accurate prediction of the amount of money they will have to live on.
To improve their retirement, workers are told to set aside as much as possible, as early as possible in the form of a private pension.
With more people predicted to reach retirement age, the strain on the state pension will continue to grow. Millions will face disappointment if they do not boost their pension pots privately while they still can, a message that the government seems unwilling to give.
Until the next time Debbie @DebDayIFA
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