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PROVIDING FOR RETIREMENT AND UNLOCKING A PENSION
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Providing for retirement and unlocking a pension, will the state pension be enough or even exist by the time you come up for retirement?
The facts are clear; if you don't make provision for your retirement the state pension is never going to be enough to provide a decent standard of living and may not even exist by the time you retire. Unless you start planning for retirement at the earliest possible opportunity, you will have no option but to keep working.
Start of article about
retirement and pensions.
Previous page about
taking early retirement.
For those of us who have no intention of retiring early and are more than happy to keep working; pension provision is not so much of a problem as it is a safety net. However, more and more people are taking early retirement without thinking about the long term should they live for another thirty five years or so.
By 2025 there will be more old age pensioners than there will be people in gainful employment and paying tax. With more and more people living into their eighties and nineties the long term tax burden will fall heavily on the shoulders of tax payers making it all but impossible to continue to maintain a state pension in its present form.
Governments need to increase the retirement age to at least seventy for both men and women with financial incentives for those prepared to defer taking their state pension even later.
This makes economic and social sense because statistics show that people who are still working into their seventies are far healthier both physically and mentally than people who have retired or taken early retirement. Statistics show that once someone retires, no matter what age they are when they take their retirement, their mental and physical health goes into decline within two years. Depression, Alzheimer's and other physical ailments tend to be more prolific in both men and women who have retired. Whilst those people who run their own businesses and keep working tend to lead far fuller and interesting lives.
This is particularly the case amongst people who have taken a severe drop in income after retirement and are unable to pursue any form of physical activity. However, activities that require more mental agility and competence appear to help maintain both mental and physical health.
By deferring retirement, senior citizens continue to make tax contributions although an argument could and should be made to reduce their tax burden to encourage them to continue working. Further more, by not taking their pension early or at the normal retirement date, the burden of paying their pensions out of government revenues would be greatly reduced.
There appears to be too many people who simply want to drop out of work under the mistaken belief that they will be happier whereas in fact they are more likely to suffer from depression and Alzheimer's disease as a result of not participating in any form of activity that requires using and exercising their brains.
Unless things change, the UK is likely to become a nation of pensioners, unable to cope financially or mentally with their lives and the tax burden will fall on future generations. Like global warming; it isn't something that is going to go away or get better unless something is done about it.
There will be critics who believe that the world owes them a pension in the same way they believed it owed them a living but then they are not the ones who are going to have to foot the bill. Whinge all you like; the meagre contributions, if any that you have made towards your pension fund will not equate to anything like the amount of money needed to keep you in any decent lifestyle after you retire.
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