Ageing population will add strain on Government's pensions pot

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Ageing population will add strain on Government's pensions pot

Mon 1st Dec 2008

The amount paid out in state pension allocations by the UK government will significantly increase as the population ages, according to research released today.

According to uSwitch.com, the government currently allocates almost £57 billion in pension payments every year, meaning that 12 million pensioners can each receive the basic state pension of £4,732.

Research by the website reveals that thanks to longer life expectancies, there will be 16 million pensioners in the UK by 2050, meaning that if national insurance contributions stayed at their current level, the government would be left with an annual shortfall of £49 billion.

Dr Tim Leunig, a professor at the London School of Economics, said: "Relying on the state to look after you in retirement is a recipe for poverty in old age.

"Future state pensions could be lower than people expect, increasing the benefits of private saving."

Last week another pensions expert, Ros Altmann, said that as the baby-boomer generation reaches retirement age from 2010 onwards, the government could be left facing a disaster comparable in scale to the sinking of the Titanic.

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