Retirement refers to the period of life when we choose to leave work permanently. The traditional retirement age in the USA is 65, but there is no specific retirement age in the UK. The retirement age and pension system vary from country to country and currently, the retirement system of the UK is going through some significant changes. There are certain things to plan beforehand when you are approaching retirement. The first thing that we should keep in mind is our finances as in future the income won’t be that much.
Pensions and retirement are a topic of discussion in the UK nowadays. Half of the British population is saving while the other half is them think that they are not saving enough for retirement. Auto-enrollment has made pensions more comfortable to understand as well as accessible to everyone. Though everything has now become more manageable, there are many misconceptions and misunderstandings regarding the pension plans. Here are some facts that we should keep in mind before taking retirement.
No Age Limit For Retirement
Almost all countries around the world have an age limit for retirement, but that’s not the case in the UK. It is very common to see people working in their 80s and 90s working in the UK. Scientists claim that the working-age is going to stretch and people are going to work in their 100 years. Millennials believe that people will continue to work in their 80s and 90s as per the present-day scenario and then think about retiring.
The pension gap is widening slowly in the UK between men and women. The pension of women is 7500 Pound less than men, which is a considerable sum of money. The average income of women is less in comparison to men, which means the pension plan for them is also less in comparison to men. The average salary of women is less as they tend to focus more on their family lives than on their careers.
Pensioners Are Rising
The number of people working per pensioner was three people back in 2010. Now the ratio has changed drastically and will continue to do so in the future. The ratio will keep decreasing with the increase in birth rate and decrease in deaths, people tend to stay longer than expected. We are hoping that by 2050 there will be one pensioner for every two workers.
Great Spends 8.4% of GDP On Pensions
By 2050, it is hopeful that the government will be spending 11.4% of GDP on the pensions of the people. As people are dying less and the birth rates are increasing, the government steps are taking to compensate for it.
Six Million People Are Now Ready To Invest For Their Future
With due course of time, we see about six million workers have now taken up a resolution to save for their pension funds. After retirement, a permanent source of income is going to stop, there will be financial chances, so people are now getting prepared for it. the concern for the future has made everyone aware and now about 100,000 people have a workplace pension scheme and have enrolled their workers.
Auto-enrolment making things easier and simpler in this savings culture and future planning and provisioning. This auto-enrolment is eligible for eligible employe; they don’t have to take any extra steps.