George Osborne’s 8th Budget was presented as a ‘budget for the next generation’ acknowledging the hopeless situation too many young people find themselves in: struggling to find work, or being in work but struggling to earn enough to cover the daily costs of living. For these young people saving for a home is a priority that often feels like an unattainable ambition, so finding some spare money to put into a pension becomes an almost laughable pipe dream. Continue reading “Lifetime ISAs – saving for the future?”
Today, we launched our Agenda for Later Life 2015 report, Age UK’s annual assessment of how public policy is meeting the needs of older people. Here, Jane Vass, Head of Public Policy, discuss the findings of the report in light of the upcoming Spending Review.
In the run up to what is likely to be one of the most challenging Spending Reviewsof recent times, Agenda for Later Life, Age UK’s annual audit of how public policy is meeting the needs of our ageing population, highlights that older people are increasingly being thrown back on their own resources, as the public services on which they rely are being scaled back or withdrawn.
This week’s blog from our General Election Series looks at why ensuring that everyone in later life has enough money is a key part of our ambition for the next Parliament.
While Age UK celebrates the fact that being older is no longer synonymous with being poor, sadly this is still the reality for too many. That is why ensuring that people have enough money is a key part of Age UK’s ambition for the next Parliament and the first of our blogs looking at our five priorities.
There are still 1.6 million older people living in poverty and many others living just above the poverty line. We know this can’t be changed overnight but we believe all politicians should commit to at least halving the numbers in poverty by the end of the next Parliament.
This week’s guest blog is from across the Atlantic. David C. John is a senior strategic policy advisor at the AARP Public Policy Institute. AARP is a nonprofit, nonpartisan organization, with a membership of more than 37 million older people across the USA.
American experience strongly suggests that the coming UK pension freedoms sound better in theory than they will work in practice. After nearly a decade where the UK has been the gold standard for retirement savings policy, it is about to take a step that it may regret.
As annuity purchases are not required, very few Americans buy them, feeling that they are spending a great deal of money for a comparatively small monthly income. Even those in traditional DB pension plans usually take a lump sum if they are allowed to do so. As a result, many US retirees spend unwisely, trust the wrong financial advisor, or make other financial mistakes.
Many people greatly overestimate how long their savings will last. Most others assume (often wrongly) that they can manage their own money as well as anyone else or that they can live comfortably on Social Security alone. US Social Security pays a benefitthat depends on the retirees’ individual income history. The average annual amount is about $13,000 (GBP 8,700).
One survey found that in West Virginia, a state with a relatively low average income, 78% of those near retirement and 67% of those at retirement would likely outlive their financial assets. Workers with lower incomes are most at risk. A recent national studyfound that by the 20th year of retirement, more than 81% of Americans with incomes up to $27,000 would run short of money, as would 38% of those earning up to $42,000, and 19% of those with incomes up to $65,000. Even 8% of those with the highest incomes could not meet their expenses. Continue reading “New UK annuity reforms – lessons from the US”
The Pension Schemes Billhas nearly completed its passage through Parliament, taking a step closer this week as Peers considered the Bill at its Report Stage in the Lords. As you’d expect, Age UK has taken a keen interest in this Bill, which is part of the Government’s wider ranging reforms to pensions announced by the Chancellor in the Budget last spring – the most significant changes to private pensions for over a generation.
From this April, there will be great flexibility, and greater choice for older people to access their retirement savings but with greater choice comes more responsibility, and potential complexity and risks, for older people making these important choices. Generally speaking, the pension reforms are a really welcome move giving those with pension savings approaching retirement freedom and greater options about how to access their money. However, with greater flexibility can also come greater risks for consumers. Continue reading “Pension Schemes Bill entering final stages”
April 2015 will represent a landmark day for pensions, with an end to the requirement to use a pensions ‘pot’ to buy an annuity. For better or for worse, people at point of retirement will hold their own futures in their hands, with decisions taken at this time having implications that can be felt for many years to come.
Age UK has welcomed greater flexibility, but it’s clear that the rapid speed of change has led to significant challenges ahead for the government and the industry, as well as – most importantly – ordinary pension savers.