The material on this site is for financial institutions, professional investors and their professional advisers. It is for information only. Please read our Terms & Conditions, Privacy Policy and Cookies before using this site. Please see our Subscription Terms and Conditions.


All material subject to strictly enforced copyright laws. © 2021 Euromoney, a part of the Euromoney Institutional Investor PLC.
Foreign Exchange

Looking for the smooth road to pension reform

www.breakingviews.com

The UK pension system is not working well. The problem is not with the government system – that is economically sound. It is with the savings-based schemes. They are not getting enough savings – partly because savers are forced to take on too much investment risk. The government does not want to make saving for pensions obligatory. But it should be able to design plans that share the risk better.

At bottom, the UK pension problem is not about savings plans but about a changing social structure. Lower birth rates, longer lives and earlier retirements all point in the same direction – to more former and fewer current workers. That means that a higher proportion of GDP has to go to old people – and, by default, a lower proportion to working people. Those still in work might not be happy with this shift, but the only way to avoid it is through big social changes. Much higher birth rates would work wonders, but only after many years. Massive immigration of workers would do the trick more quickly. But the obvious answer is lower retirement incomes and higher retirement ages.

You have reached premium content. Please log in to continue reading.

Read beyond the headlines with Euromoney

For over 50 years, our readers have looked to Euromoney to stay informed about the issues that matter in the international banking and financial markets. Find out more about our different levels of access below.

SUBSCRIBE ONLINE TODAY

Unlimited access to Euromoney.com and Asiamoney.com

Expert comment, long reads and in-depth analysis interviews with senior finance professionals

Access the results of our market-leading annual surveys across core financial services

Access the results of our annual awards, including the world-renowned Awards for Excellence

Your print copy of Euromoney magazine delivered monthly

£73.75 per month

Billed Annually

FREE 7 DAY TRIAL

Unlimited access to Euromoney.com and Asiamoney.com, including our top stories, long reads, expert analysis, and the results of our annual surveys and awards

Sign up to any of our newsletters, curated by our editors

LOGIN NOW

Already a user?

We use cookies to provide a personalized site experience.
By continuing to use & browse the site you agree to our Privacy Policy.
I agree