Jelf Employee Benefits has revealed shocking statistics that, based on current life-expectancy data and the proposal to link state pensions to longevity, the great-great grandchildren of today’s children may not be able to retire until they reach the grand old age of 100. Or, put another way, children born in the year 2104: four generations down the line, will not receive state pension until 2204.
Ronjit Bose, commercial director at Jelf Employee Benefits said: “Whilst we’re not quite in this dire situation yet, we’ve produced these figures to highlight two very real issues for employers: the need to help employees understand and to engage with their pension and workplace savings benefits and also the requirement for employers to adapt their workplaces for more mature staff.”
Jelf Employee Benefits believes that the industry and employers need to prepare for workforces becoming older and all the ramifications this will have in terms of benefits. And this is already a very real issue today: employers need to get their staff engaged with pensions sooner rather than later, or they may have a workforce unable to retire because of inadequate savings.
Bose continued: “If employers and employees both significantly increase their pensions contributions then the situation can be reversed: employees will be able to retire when they’re ready, which will be beneficial to themselves and their employer.
“Auto-enrolment is a great starting block for this type of discussion with employees but sometimes it’s only these kind of statistics that really focus the mind of employees who may tend to put other priorities above retirement planning.”
The calculations
– PwC research shows that children born in 2012 will retire at the age of 77.
– It is widely accepted that longevity seems to go up by 2.5 years every decade. Therefore,
Born in 2012 = age 77 to retire
Born in 2022 = 79.5
Born in 2032 = 82
Born in 2042 = 84.5
Born in 2052 = 87
Born in 2062 = 89.5
Born in 2072 = 92
Born in 2082 = 94.5
Born in 2092 = 97
Born in 2102 = 99.5
Born in 2104 = 100
– A generation is calculated on average as 25 years, there are 92 years between 2012 and 2104. This is the equivalent of just under 4 generations – children, grandchildren, great grandchildren, great-great grandchildren.
– Nb other variables may affect these projections.
