Personal Financial Planning
Kingdom, United States of America, Japan, Sweden, Switzerland, France, Germany, Spain, Switzerland, Hong Kong, Singapore, Australia, Italy, Canada, New Zealand and others etc. have enormous resources, highly sophisticated and modernized technology, technical education and know-how that have enabled them to provide a safer and secure living environment to their citizens in comparison to poor third world, African and Asian countries such as , Zimbabwe, South Africa, etc.
However, at one extreme, the governments of these developed countries are engaged in providing quality living facilities and standards that have dramatically increased the life expectancy rates and have resulted in a colossal increase in populations of elderly and retired personnel. On the other extreme, these governments are facing immense problems due to these constantly increasing average age statistics that have jumped tremendously in past 25 years in the wake of improving environmental conditions and other factors. More specifically, this paper aims to discuss the issue of increasing longevity that has placed severe strains on the pension system and has forced radical reform of pensions’ structures in developed economies. I will be focusing on the impact of longevity on United Kingdom’s pensions’ structure and pensions policy planning.
John H. Fitzpatrick (2009) who is a Partner and Director of Pension Corporation revealed that there are six major forces that affect the size and ownership of Longevity Risk. The first factor is the fact that number of retired people will continue to grow with the passage of time because of the ‘increase in population amid baby boom and life expectancy’. This would place severe strain over the authorities that are responsible for development of pension policies and allocation of pension budgets. The problem is further aggravated when Economic growth in the UK creates more jobs every year thus reducing unemployment at one stage, while on the other,