State Pension Could be extinct by 2044 warn MPs

December 8, 2014
Lucy_2 (Custom)By Lucy Palmer-Richeson
08/12/2014

New research has shown that 1 in 6 MPs believe that state pensions will no longer be around in 30 years.

This was revealed after an online survey asked 100 cross-party MPs their views on the future of state pensions. Overall, Conservative MPs were the most pessimistic, with 13% of those surveyed believing state pensions would be non-existent or notably lower by 2044. Meanwhile, 7% of Labour MPs shared their pessimism.

Over half (54%) of those surveyed who believed that state pensions were in trouble also indicated that they believed the retirement age would increase to 70 by 2044.

Six in ten MPs questioned believed that auto-enrolment minimum pension contributions should be increased in the near future, though they agreed they were sufficient for now.

A lack of confidence was shown in the Chancellor’s guidance guarantee, which is a commitment to provide savers with defined contribution pensions access to free, impartial advice by 2015. Over half (51%) of all MPs surveyed indicated that they did not believe this would be put in place. The majority of those showing concern about the guidance guarantee were Labour MPs (87%) with only 17% of Conservative MPs believing the same.

At the moment, people who are retired and who have a full national insurance record receive £113.10 per week. The cost is rising as people live for longer, and figures show that in the next 60 years the cost of pensions will be £420b, quadruple what they are now.

The survey was commissioned by NOW: Pensions. Their CEO Morten Nilsson said of the findings: “In the corridors of power there is a worrying degree of scepticism that the State Pension can be maintained over the long term.

“With the future of State provision so uncertain, it’s never been more important for young savers to take control of their own pension saving and put aside as much as they can to help protect themselves against an uncertain future,” he said.

“Auto enrolment has a key role to play in plugging the savings gap but MPs agree that contributions need to rise beyond current levels to give Generation Y any chance of an adequate retirement.”