Schools offer solution to pensions crisis, says Green
De Vere Group’s chief executive claims it is “madness” that young adults start work without a basic grasp of how much they will need to save for their retirement.
By Joshua Ausden, News Editor, FE Trustnet
Wednesday August 29, 2012
Retirement planning needs to be taught in secondary schools and given the same priority as careers advice, according to de Vere Group's chief executive Nigel Green, who says this is the only sustainable way to solve the pensions crisis.
His comments follow a study by Barings Asset Management that found 44 per cent of those close to retirement age were unable to say when they would be able to retire – up from 30 per cent this time last year.
"It’s alarming, but sadly not surprising, that such a large proportion of Britons who are nearing retirement age do not know when they will be able to afford to retire. As a country we’re ill-informed about achieving financial freedom in retirement," said Green.
"In order to ensure people are, in the future, more likely to be able to retire when they choose to, and not have to work in to their 70s, for example, simply because they can’t afford to give up work, it’s of paramount importance we teach our young people how to plan their finances for when they’re older."
"The earlier people start to make informed decisions, the easier it will be for them to enjoy the lifestyle that they deserve when they retire."
A number of FE Trustnet
articles have recently highlighted the growing disillusionment with the pensions system.
In a poll back in April, more than 80 per cent of our users said their pension pot had failed to grow in line
with promises made when they first began contributing to it, while Hargreaves Lansdown’s Rob Morgan said in a recent interview
that the lack of interest in pensions was “the single biggest risk to the UK population”
Unless students are informed about the massive risks of ignoring retirement planning, Green (pictured left)
believes many will find themselves much worse off than their parents and grandparents in later life.
He commented: "With annuity rates plummeting to historic lows, age-related benefits being scrapped, soaring living costs and taxes, and people living longer – meaning the money has to go further – it’s clear that the world has changed irrevocably in the last few years; things are not the same today as they were a generation ago."
"Should we fail to teach our young people retirement planning, an increasing number could find themselves unable to enjoy the retirement that previous generations have taken for granted."
"We teach youngsters in secondary schools about finding a suitable career, which is right and proper, but it is madness that we stop at equipping them with the life skills of how they are more likely to be financially independent once they are ready to leave the world of work," he added.
Baring Asset Management's findings are in stark contrast to a similar survey carried out prior to the Lehman Brothers crash in 2008, when just 1 per cent of those questioned were unsure about when they would retire.