As a nation, the population is ageing at a fast pace; for the first time in history, over 65s in Britain outnumber under 16s.
There are currently 4 people of working age supporting each pensioner in Britain. By 2035 this number is expected to fall to 2.5, and by 2050 to just 2.
As a result, there are some important challenges to consider around later life funding.
“At a cross-roads: understanding the future likelihood of low incomes in old age” is a new white paper setting out The International Longevity Centre’s later life funding priorities for Government over the new Parliament.
Within their white paper, the think tank argues that a strategy for later life funding must:
-Secure effective funding for adult social care
-Implement the Dilnot reforms
-Find ways of ensuring the provision of mass market financial advice
-Develop default options for those who “sit on their pension pots and do nothing”.
-Be clear around what constitutes the deliberate deprivation of assets within the context of the new pension freedoms
-Support innovation in the equity release market
-Support policy which extends working lives
Commenting on the white paper, Baroness Sally Greengross, ILC-UK Chief Executive said:
“We are at a cross roads. There has been undoubted progress in reducing pensioner poverty, particularly at older ages, but we must guard against complacency.
“Continuing reductions to social care budgets could lead to ever rising levels of unmet need and thereby greater deprivation amongst the oldest old.
“Not all Baby Boomers are wealthy and the pension freedoms alongside an over reliance on housing wealth poses risks to future retirement incomes.
“For tomorrow’s pensioners, there is a huge question about whether they will be able to depend on the state to provide adequate levels of support given the rising fiscal pressures of supporting an ageing population.”
It will be interesting to see how the new Government addresses these issues and whether they manage to put in place an effective long-term strategy for later life funding.