Pension reform is a hot topic because it’s all change… and when I listened to Tony Boorman – Director of Stafforce Recruitment – impart his knowledge along with lots of interesting facts and figures at a recent business managers’ workshop, it highlighted to everyone in the room just why things do need to change!
Just to share a few facts that struck me….
- When the state pension was introduced in 1909, it was worth a maximum of five shillings (25p) per week. This is the equivalent to £20 in “today’s money”. In comparison today’s pension is worth £107 per week – plus means tested benefits. This is a big increase though I guess we’re also paying more tax as well and we do all live much less frugal lives!
- We’re all complaining a little that the retirement age is going to rise to 67 by 2028…and also that it will be the same for men and women. However when the state pension was introduced it was for over 70 year olds…and yet we’re living so much longer on average today!
- The number of people aged over 65 will almost double by the year 2055 and people are living longer. Female life expectancy has increased from 71.8 years in 1960 to 81.6 years in 2010, while male life expectancy has increased from 65 years to 79.4 years in that same time.
- I think the most interesting thing is this… back in 1901, for every pensioner there were ten people working. By 2005 this had reduced to four people working for every pensioner and wait for it…it’s expected that this will change to just two workers for every pensioner by 2050.
- The Public Sector Pension deficit is £80bn and the Private Sector Pension deficit is £237bn… mainly due to old final salary schemes and the current state of the economy.
That’s why it all has to change and why the Government had to introduce the Pensions Act 2008 which will reform workplace pension providers.
Watch out for a series of blogs from us about pension reform and what it means for employers and workers.