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Retirement advice from Kent lawyer

PUBLISHED: 11:02 21 June 2011 | UPDATED: 19:34 20 February 2013

Retirement advice from Kent lawyer

Retirement advice from Kent lawyer

Already contemplating a blissful retirement? You may need to readjust your expectations, especially towards a state pension

Retirement advice from Kent lawyer

Already contemplating a blissful retirement? You may need to readjust your expectations, especially towards a state pension

Retirement - the promised age of leisure and financial freedom. At least thats what the ad men would have us believe, but how much of that is the truth and how much is a myth? The reality for many nowadays is that retirement is simply unaffordable, and they will have little option but to carry on working.

Retirement is lasting longer, getting more expensive and becoming more complicated. According to a recent survey carried out by the insurance company AXA, a typical male will need to work an extra six years if he wants the same level of pension income he could have retired on five years ago.

The average age at which people can actually afford to retire is now 71, compared with an expectation of it being 64.

Sadly, the majority of people dont address this issue until it is too late, and indeed many still have their heads in the sand and dont address it at all. In fact, almost half of older Brits who are close to retirement say they expect the State to provide the bulk of their retirement income.

Many pension experts are predicting that there is something of a pensions time-bomb waiting to go off in Europe, as successive countries see their budgets stretched to the limit.

As populations grow in Europe there is a feeling that collective EU members may be forced to bail out weaker countries who are struggling to support their own state pensions.

This is of particular concern to the UK, where on top of everything else there is reckoned to be a public sector pensions funding deficit approaching 800 billion.

Mortality is an odd thing. Although it may seem that we are all living a lot longer than previous generations, that isnt really the case. Improvements in medical science and social advances over the last hundred years have not really extended our natural lifespan by more than two or three years, but what they have done is allow far more people to achieve it.

Here are a couple of mind boggling facts to contemplate:

● of all the people who have ever walked the earth, about one quarter of them were alive during the last hundred years

● the number of people alive in the world today is more than twice the number it was 40 years ago

Over time, this exponential increase in population statistics poses a huge conundrum for our politicians: how can we afford to provide pensions for so many people?

So, what does the future hold for state pensions? Clearly, maintaining a reasonable state pension could be very expensive, and unless we are prepared to shoulder a dramatic increase in taxes in order to pay for it, then the logical conclusion is that state pensions in real terms will continue to wither.

For the younger generation the advice is simple if stark: the only person you can rely on to look after you when working life ends is yourself.

If there was ever a time that that the whole issue of how we provide income for ourselves in retirement should become a serious (and urgent) matter, it's now.


Alan Ramsay joined Whitehead Moncktons investment management department in 2009 and is a member of the Personal Finance Society, with more than 30 years experience in the financial services industry.

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