This is why the UK is facing a time bomb of retirement woes
Longer lives have combined with scant savings to put the UK on the road to pensions chaos, one financial advisory firm has today warned.
Chase de Vere notes life expectancy has increased substantially in recent years, with Office for National Statistics showing the average life expectancy for a 65-year-old man has increased 29 per cent over the last 20 years, while the average life expectancy for a 65-year-old woman has increased by 14 per cent.
However, to coincide with the ageing population, Chase de Vere also warned that levels of savings and investment are in decline, with the UK savings ratio dipping from 11.6 per cent in 2010 to just 4.2 per cent in 2015.
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It also warned younger generations not to rely too much on their parents' retirements for guidance, remarking that many of today's retirees have benefited from generous company pensions and increasing property prices.
"It is deeply worrying that many people don't seem to have grasped the facts that we are living for longer and that they are personally responsible for ensuring they have enough money to support themselves throughout their retirement," said Patrick Connolly, certified financial planner at Chase de Vere.
"While some people are struggling with debts, are desperately trying to get on the property ladder or have to provide financial support to their children or even their parents, too many are prioritising short-term goals such as expensive holidays or new cars over their long-term financial futures.
"This doesn’t mean that people shouldn't live for today but rather they need to get the balance between enjoying today and also ensuring they are able to enjoy tomorrow."
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To add further doom and gloom, the research also warned that the ageing population would put pressure on the state pensions, not only because there would be more people claiming, but also because government might need to direct more funds to cover increasing demands for healthcare and social services.
In March, the Department for Work and Pensions announced it will be run a review into state pension age, headed by former director general of the Confederation of British Industry John Cridland, to assess whether it needs to be adjusted to account for increasing life expectancy.
At the time the review was announced, Tom McPhail, head of retirement policy at Hargreaves Lansdown warned the shakeup could mean people had to work until their mid-70s before being entitled to a state pension.