Pensions are not talked about enough and over half of the British population admits to either not saving for a pension or not saving enough for the retirement they dream of. Auto-enrolment (made law in October 2012) was put in place to start reducing this statistic, making pensions easier to understand and more accessible for the average person.
However, this does not educate fully people on pensions and auto-enrolment leading to misconceptions and unknown facts. That’s when we come in with some surprising facts about pensions you might not know…
1. Without preparation you could be working for longer than expected
Recently it was found one-fifth of British people aged 65-69 are still in employment. Some scientists today predict that living to the ripe old age of 100 years old will be the norm for future generations, meaning that the working age is likely to continue to stretch further into one’s golden years.
Although there is no official retirement age in this country, the current age to receive a state pension is 65 but it will increase soon. For millennials, this could signal that people will have to work well into their 80s or 90s in order to retire comfortably so it’s best to start preparing your pension plan sooner rather than later.
2. More than 6 million people are now investing in their future
Thanks to the auto-enrolment scheme into workplace pensions, more than 6 million workers have now begun saving in their pension funds. Although auto-enrolment is automatic for eligible employees, employers do need to take vital steps in order to set up a workplace pension for their staff so make sure you’re on top of it. Auto-enrolment has contributed to changing the savings culture and future planning for many.
3. Government spends 8.4% of GDP on pensions
To compensate for the ‘ageing population’ and declining birth rates that have reduced the working population, the government have been forced to increase the amount of expenditure on the state pension. It is expected that by 2050, the government will have to spend 11.4% of the country’s GDP on pensions alone!
4. Wondering where your money goes?
There are annual benefit statements and illustrations that will help to inform members of a workplace pension what their projected fund will be at retirement. This will help individuals see if the money that their saving is on track with their pension goals, if not a change of contribution can be made. Or if you feel like you need more money at the moment, especially with rising prices, you can suspend your pension contributions.
Contact us if you need any help and we are ready to help!