This article is from the source 'bbc' and was first published or seen on . It will not be checked again for changes.
You can find the current article at its original source at http://news.bbc.co.uk/go/rss/-/1/hi/business/8191011.stm
The article has changed 8 times. There is an RSS feed of changes available.
| Version 0 | Version 1 |
|---|---|
| State pension age 'could hit 70' | State pension age 'could hit 70' |
| (about 1 hour later) | |
| The state pension retirement age could be heading for 70, the UK's pensions regulator has told the BBC. | |
| David Norgrove said rising life expectancy meant millions of people would "undoubtedly" have to wait longer in future to draw a state pension. | |
| People will not save as much for retirement as in the past, with many people "frightened" to do so, he said. | |
| The state pension age is due to rise progressively to 68, but Mr Norgrove said he thought it would end up higher. | The state pension age is due to rise progressively to 68, but Mr Norgrove said he thought it would end up higher. |
| Decline | Decline |
| Four years ago Lord Turner published a report into the future of Britain's creaking pensions schemes and called for the state retirement age to rise to 68 by 2044. | |
| But Mr Norgrove said: "I think it will end up higher than that. | |
| "People are going to have to work longer, partly because we're not going, as a nation, to save as much for retirement as we did in the past." | |
| He said the ability of the current working generation to pay for the retirement of its predecessor would be "a real issue for the next 30 years", not least because of a lack of knowledge among the public about how to save. | |
| "The evidence is that people generally are frightened of saving for pensions," he said. | |
| By 2044, the state pension age will have risen to 68 | |
| "They think that pensions are very complicated. Actually, pensions in many ways are quite simple. Once you've made the initial decision you can let it run." | |
| With life expectancy rising each year, many people argue that the government simply cannot afford to maintain state benefits at their current levels. | |
| Any potential shortfall has come sharply into focus following the massive increase in government debt amid the financial crisis, during which it has spent billions of pounds trying to boost the UK economy. | Any potential shortfall has come sharply into focus following the massive increase in government debt amid the financial crisis, during which it has spent billions of pounds trying to boost the UK economy. |
| Experts say people will have to rely far more on company and private pensions arrangements in the future. | Experts say people will have to rely far more on company and private pensions arrangements in the future. |
| As part of his pensions review, Lord Turner called for employees to be enrolled automatically in their company's pension scheme to encourage more people to save for their retirement. | As part of his pensions review, Lord Turner called for employees to be enrolled automatically in their company's pension scheme to encourage more people to save for their retirement. |
| However, Mr Norgrove warned that generous company pension schemes, such as final salary arrangements, were in "long-term decline", partly because government rules had made them too expensive for businesses to run. | |
| But he said: "I think there's a good chance that we'll see a core of companies continuing to offer final salary schemes, particularly big companies." | |
| Deficits | Deficits |
| Earlier this week, figures from consultant Lane Clarke & Peacock showed that Britain's leading companies have seen their pension schemes plummet in value over the past year. | Earlier this week, figures from consultant Lane Clarke & Peacock showed that Britain's leading companies have seen their pension schemes plummet in value over the past year. |
| It said firms listed in the FTSE 100 index now had a combined deficit of £96bn, the largest on record. | It said firms listed in the FTSE 100 index now had a combined deficit of £96bn, the largest on record. |
| The good thing about pension schemes is that, by and large, they're a very slow matter David Norgrove | |
| This compared with a £41bn deficit in mid-July 2008 and a surplus of £12bn in the same month of 2007. | This compared with a £41bn deficit in mid-July 2008 and a surplus of £12bn in the same month of 2007. |
| Just as the government may struggle to keep paying state pensions, some companies already say they can no longer afford to pay out. | Just as the government may struggle to keep paying state pensions, some companies already say they can no longer afford to pay out. |
| Earlier this month American Express announced that it had suspended pension contributions for all its UK employees for the next 18 months, saying payments had become unaffordable. | |
| But Mr Norgrove said he expected the impact of the economic downturn on the majority of pension schemes to be "manageable". | |
| "Inevitably, in a serious recession, we're going to see more companies going insolvent, but I don't think at the moment we see this as a crisis," he said. | |
| "The good thing about pension schemes is that, by and large, they're a very slow matter. This isn't like the banking system that can collapse overnight. | |
| "Generally speaking, if the sponsoring company stays in business there's time to work this out." | |
| The full interview with David Norgrove can be seen on Leading Questions with Robert Peston on the BBC News channel at 2230 BST on Saturday. |