News in the media today that 60% of us are not paying into a private pension which is the highest figure since records began and amounts to somewhere around 22 million working adults in the UK. The Office of National Statistics (ONS) have revealed that the figures have gone from 43% of women and 54% of men in 1996/7 to 37% of women and 43% of men in 2005/6. Less than a third of final salary schemes are open to new workers whereas in 2002 the figure was 83%.
I'm fortunate that I'm in a job where my employer pays 15% of my gross salary into my private pension fund (Note to self: change pension company back to environmentally responsible provider) but Catherine, who is a pensions professional, assures me that I should be paying a further 7% to bring my contributions up to a level which will provide my required retirement income. My current situation lasts only until June 2009 when my employer retires and most jobs in my field offer a maximum employer contribution of 8%.
Dr Ros Altman, former Government pensions adviser, said: At the moment there is a pensions crisis but we are heading for a pensioner crisis. If you don't get people to save, they will be retiring in abject poverty. there will be all these armies of people with nothing to live on."
Danny Alexander MP, Lib Dem work & pensions spokesperson, said: These figures highlight the worrying tendency of increasing numbers of people to save for their retirement. The Government must be clear that relying on the derisory state pension will not give people the standard of living in retirement that they may imagine."
The current £90 a week state pension would be around £145 if it had remained linked to average earnings. The Government Personal Account scheme starts in 2012. Employers must contribute to employee pension schemes but employees themselves can opt out.
Perhaps the time has come for the Government and all political parties to take hard decisions and make us all bite the bullet on our poor pension provision.