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Pensions Boss Warns We Will Have to Work Longer 

Terry Macalister, The Guardian

United Kingdom

July 4, 2005

Britain's retirement age will "undoubtedly" rise in an attempt to plug a looming hole in the country's pension funding, the head of the Pensions Commission said yesterday.

The warning from Adair Turner came as new research published today showed 80% of personal pension holders were unaware of basic facts about their retirement package. 

Mr. Turner, who is charged by the government with finding ways of reducing Britain's £27bn pension's saving gap, said working longer did not necessarily mean a delay in people receiving the state pension. 

"It may well be that people continue to get a state pension at 65 - that's a possibility -but they will also work alongside that to supplement it and they will get income from a variety of sources," he added. 

The ultimate solution to the problem was "bound" to involve a mix of later retirement, higher taxes and increased personal savings, said the former boss of the CBI. 

"People are going to have to work longer. The important thing is to distinguish the idea of people working longer from the issue of when you get the state pension," he said in an interview on Sky Television. 

Mr. Turner, whose review should be completed and published this autumn, also predicts that those on average earnings are likely to be hit hardest by changed circumstances in retirement. 

In future, those at the bottom will be the poorest but they will probably be looked after through state benefits as well as they were in the past, he argues. 
Those in the middle must be most careful about making greater provision for themselves. 

Around 12 million people are said by Mr. Turner not to be saving enough for their future. 

Research commissioned by Liberata Financial Services and released today shows a huge amount of "pension's illiteracy" that could be compounding the problem. 

The life insurance and pensions outsourcing provider says 60% of those interviewed could not answer one question about their pension. 
Seventy-three per cent did not know the upper limit on their yearly contribution while 75% did not know what the penalty was for stopping contributions.