More people in the UK are enjoying a long and fruitful retirement thanks to better health services, diets, and working conditions. The life expectancy of people in the UK is 84 years for women and 80 for men, with these figures expected to rise to 87 for women and 84 for men within 20 years.
This is great news for workers as they can expect to enjoy many years of retirement. They’ve worked hard for their pensions and they’ve earned them.
However, the increased life expectancy also brings an increase in the pressure on pensions. The State will be paying out to more pensioners for many years to come, which puts increased pressure on funding.
Pensions cost less than £100 billion a year at present but this could double by the mid-2030s and soar to £400 billion in 40 years’ time, according to a Telegraph report.
Ministers are looking at ways to pay for the pensions by encouraging people to stay at work past retirement age or raising the age when you can receive a pension.
People who want to take early retirement will need to find other ways to fund their lifestyle, either through private pension schemes or investments such as stocks or property.
Debt problems for the over-55s
Many people who may have looked forward to early retirement are instead struggling with large debts and little savings. A study by Aviva insurance company found that one in five people aged 55 or over were still paying off their mortgages.
The report also found that the average older person was also paying off credit card bills or other debts.
Ways to ease debt worries
If debts are causing problems, there are ways to consolidate them or reduce monthly payments. The minute you feel you cannot control your finances, it is important to get advice from a specialist financial firm.
They may suggest that you set up an Individual Voluntary Agreement, which is a legally-binding agreement to pay all or some of the money you owe to creditors. You make the payments to an insolvency expert, who divides the money between your creditors.
You can find out more about setting up an agreement by talking to a company such as Carrington Dean IVA Specialists.
This is just one of many ways that people can ease the pressure on the pension system.