| Pensions - are we facing a social crisis? |
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It is however an interesting discussion piece and highlights the unwillingness of employers to shoulder the burden of risk on pensions and the potential massive crisis that we may face funding retirement. According to the Office for National Statistics' Pension Trends report in 2007 7.8 million people were saving into defined contribution schemes, thereby taking the risk of future retirement fund values themselves. By contrast 7.9 million were saving into defined benefit schemes. About 2/3 of this group were public sector workers... (that's another topic for discussion in itself!) According to ONS by the end of the next decade, private pension savings are likely to be one-third defined benefit arrangements and two-thirds defined contribution. With auto-enrolement coming in 2012 and large companies such at BP and Barclays closing the door on their schemes we could well see, to quote the Economic Co-operation and Development, "...the financial crisis of the past two years.." turning into, "...a social crisis lasting for decades." |
