An interesting one ... a financial ticking time bomb ... make that a Doomsday one ? ... 46156.html

UK retirement bill up more than £1 trillion in five years as pension crisis escalates.

State and employers bet on future workers to fund a massive gap in the nation’s ‘mind-boggling’ pension liabilities.

The UK’s pension funding crisis reached a new milestone this week as the Office for National Statistics revealed that liabilities rose to £7.6 trillion at the end of 2015.

The figure, which is the total amount promised to pay for Britons’ future retirement income, includes £5.3 trillion of pension entitlements that were the responsibility of central and local government, most of which – about £4 trillion – came from State Pension entitlements.

The remaining £2.3 trillion were private sector employee pension entitlements with £2 trillion due to final salary pensions, up from £1.4 trillion in 2010.

As things stand, expert commentators suggest there is only about a third of that “in the bank” in company pension funds. The remainder, it is hoped, will be generated by future working populations.

The figures are designed to provide a snapshot of household retirement entitlements, though they don’t include self-invested personal pensions, which have grown significantly in recent years thanks to legislative changes known as pensions freedoms.

“While these are obviously large amounts of money, it is important to remember that the payments will be drawn over many years,” says Darren Morgan, head of national accounts for the ONS. “The figures say nothing about the sustainability of our pension system in future.”

In fact, pensions experts have been shocked by the statistics, which come just days after official warnings from the Government Actuary that national insurance may have to increase by 5 per cent to pay for future state payouts.

“The figures published by the ONS today are astonishing and bring into sharp relief the reasons behind proposed increases in the state pension age,” adds Tom Selby, senior analyst at AJ Bell.

“Unfunded state pension entitlements are worth more than double UK GDP – these are promises that will, ultimately, have to be paid for by future generations either through higher taxes, a lower state pension income or a later retirement age.

“In reality people should brace themselves for a combination of these measures over time, although the pace of change will depend largely on the willingness of politicians to tackle long-term issues that transcend the electoral cycle. Certainly a state pension age of 70 or higher is likely to be the reality facing millennials.”

In reality, many suggest the effects are already being keenly felt. Organisations with large defined benefit liabilities, in particular, are said to be keeping a lid on the wages of their current staff to fund the retirements of those who have already stopped work.

Defined benefit, or final salary pension schemes, are those that have offered a guaranteed retirement income for their members. Very expensive to run, these have all but disappeared in favour of defined contribution schemes. These focus instead on the value of the retirement pot build up from employee and often employer contributions, tax relief and reinvested investment returns.

“This is all part of a huge social shift away from the paternalism characterised by defined benefit pensions, and towards individual responsibility for retirement outcomes through defined contribution,” adds Selby.

“And while many savers might feel the pinch from the small auto-enrolment contribution increases set to be introduced in the next 12 months, anyone wanting to enjoy a comfortable retirement – or to retire early – needs to think about setting aside significantly more than 8 per cent of their salary.”

Meanwhile, Steve Webb, a former pensions minister now director of policy at Royal London, warns that calls for the triple lock – the guarantee that the state pension would rise each year by the highest among either inflation, wage growth or 2.5 per cent – to be scrapped may not be as helpful to younger generations over their lifecycle as some assume.

“There’s no doubt that large unfunded pension promises will place a growing burden on future workers, who will have to fund their own pension provision as well as helping to meet the pension promises due to older generations,” he says.

“This makes it all the more important that younger workers in particular ‘max out’ on the money that employers are willing to put into workplace pensions – money that is often not taken up.

“For today’s younger workers, the state pension will be an important part of their income in retirement, especially if they do not build up a large pension of their own. Paradoxically, cutting back on state pensions today could leave younger workers with poorer private and state pensions when they retire.”

He urges younger adults in particular to start saving for retirement as soon as they can and increase their own contributions when they get a pay rise, as well as making the most of employer contributions.

Elsewhere, the Government this week finally made good its promise to ban pension cold calling. Used by huge numbers of criminals to scam millions of pounds from retirees and near-retirees by taking advantage of confusion over a raft of recent pension rule changes, cold calling and other unsolicited activity on pensions matters will be banned from June this year.

Campaigners are now urging the Government to invest in large scale awareness campaigns alongside the legislation in a bid to help prevent more people losing their life savings to fraudsters.

One gets the impression that many Western Governments are praying for a " Doctor Susan Calvin " and the rise of the robots ... who , thankfully , will not be paid either a wage or pension ?

That would be one problem solved ... only to create another ?

What to do with tens of millions of human beings now replaced by robots ?

Suffice to say , a little drop of a " Happy drug " in the water supply would be one solution ... many are already addicted to these types of drugs even now ... perhaps , in the future , replace HAPPY with ZOMBIE ? ... edications

.... and this not science fiction , it is coming ... !!!