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Last Updated: Tuesday, 12 October, 2004, 18:33 GMT 19:33 UK
Pensions poverty 'will hit NI'
Commuters waiting at a bus stop
In the queue: Many of us will have to work longer to get a decent pension
Three quarters of a million people in Northern Ireland may face poverty when they retire, according to the General Consumer council.

It also said fewer than half the population had made any pension provision while a similar percentage had little or no knowledge of pension issues.

The figures are being highlighted on the day a government commission released its own report on pension problems in the UK as a whole.

The General Consumer Council said people in Northern Ireland were too busy paying off mortgages and other debts to put money into a pension plan.

The council's Alan Walker said: "With an ageing population, Northern Ireland consumers need to be more aware of their own retirement provision and not rely on the basic state pension to support them in the future.

Why many are heading for poverty in old age

"In 2003, the basic state pension was only worth 15% of the average annual UK income and this is expected to fall to 5% over the next 50 years."

"As this debate continues we need the government to be clear about the issues and provide security for the future for those with concerns," he said.

"We also need appropriate regulation in the private sector markets to help restore public confidence in private pension products.

"Consumers also need to consider their future and how they can plan for a happy retirement, free from money problems."

More than 12 million working people in the UK are not saving enough for their retirement, the report into pensions has found.

The Pensions Commission said a mix of higher taxes, more saving and a higher average retirement age was needed to solve the pensions crisis.

Tough choices

If taxes, savings or retirement ages were not increased, pensioners would suffer a 30% decline in relative incomes, the report said.

The commission is due to set out specific recommendations next year.

The First Report of the Pensions Commission

The Pensions Commission was asked in 2002 to look into the state of UK retirement provision.

The UK's ageing population means that, in future years, taxpayers will have to support an increasing number of over-65s through the state pension.

Given the ageing population, the report says that society and individuals must choose a mix of four options.

These are either:

  • Pensioners becoming poorer relative to the rest of society; or
  • Taxes/National Insurance contributions devoted to pensions rising; or
  • Savings rising; or
  • Average retirement ages rising.

The report says that because the option of poorer pensioners is undesirable, some combination of higher taxes, higher savings and/or a higher average retirement age is needed.

If the retirement age does not rise, state pensions spending or private savings will have to rise by 57bn a year, the report says, to keep pensioners' living standards at current levels.

How the crisis affects planning for the future

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