PENSIONS CRISIS COULD ESCALATE INTO CARE CRISIS

DR ROS ALTMANN

DIRECTOR GENERAL, SAGA

PRESS RELEASE

November 23, 2010.

PENSIONS CRISIS COULD ESCALATE INTO CARE CRISIS.

The UK’s pensions crisis could well escalate into a care funding crisis unless the government gets to grips with the issue, says pensions expert Dr Ros Altmann, Director General of Saga.

Dr Altmann will be delivering a keynote speech for the launch of the Westminster Business School on Tuesday, 23 November, 2010, during which she will outline her vision of what must be done to combat the pensions’ crisis facing the UK.

Dr Altmann has often voiced her views on pensions, recently with reference to the impact of low interest rates on pensioners (video here) and how a pensions crisis could breed a care crisis (video here).

“I believe radical pension reform is needed and, because part of the solution must come from longer working lives, age discrimination must be tackled, with employees given more help to stay in work longer. Without dramatic intervention the time bomb will explode, leaving a generation at risk of poverty, without pension provision, and increasing pressure on services and benefits,” said Dr Altmann.

But Dr Altmann also warns that as the pensions crisis has not been tackled the UK could face an even greater financial catastrophe – in care funding.

Dr Altmann warns that the demographic dangers are upon us, with the first baby boomers reaching 65 in 2011. And they are a generation resistant to planning for the future but who live much longer than previous generations.

• Latest research reveals one third of over-50s have no pension provision
• Company schemes are being closed and people are finding they get little or no pension from many pension funds
• Measures coming from Brussels could increase the crisis with over-burdensome changes to investment backing for pension funds and annuities causing pension values to fall.

The coalition government is introducing the National Employment Savings Trust (NEST) but Dr Altmann does not believe this is enough.

“We need radical state pension reform and social revolution to rethink our lives, with a re-evaluation of what 'retirement' should look like. Put simply, there needs to be more saving, and more working,” said Dr Altmann.

“So far the new government has expressed good intentions, now we need measures to back this up. As well as radical state pension reform there must be more help for the over-50s to stay in work - once they are out, they often stay out. In addition, HR departments need to be encouraged to manage their older labour force better after the ending of the Default Retirement Age. This means having sensible discussions with older workers about perhaps shifting to part-time work, assessing them on the basis of their ability to do the job, not their chronological age.”

Ends

Further information:

Paul V Green

Head of Communication
Saga Group Ltd
01303 776 023 (w)
07714 414 859 (m)
www.saga.co.uk.

Iain Macauley

07788 978800

im@pressrelations.co.uk

To attend the reception, or for more information, please contact:

Stephanie Winteringham at Stephanie@communicationsmanagement.co.uk or on 01727 738 550.

Editors’ Notes

Dr Altmann, who was recently appointed as the Director General of Saga, the organisation representing the over-50s, has twice been named Pensions Personality of the Year. She led the successful Campaign for Pensions’ Justice on behalf of 140,000 people and their families who lost company pensions.

Westminster Business School is one of the largest business schools in the UK with more than 4,000 students and 350 staff, providing a full suite of services to a wide range of audiences including undergraduate and postgraduate level students, businesses, local government and other non-profit organisations (www.westminster.ac.uk/schools/business).

The school’s Centre for Finance and Financial Services (CFFS) carries out research into pension reforms, saving for retirement, the age of retirement; occupational pensions, women’s retirement-income planning decisions and the retirement behaviour of ethnic minority groups. The Centre is home to the Pension Investment Academy - a joint venture between Specialist Pension Services Limited (SPS) and Westminster Business School - and the Pensions Research Network, which draws together academics and their research to widen the field of knowledge within retirement, savings, pensions and ageing.