You’re On Your Own As A Retirement Saver


Financial experts are suggesting that the state pension should be ignored when planning retirement finances.

Analysis of the value of the state pension by financial magazine Investors Chronicle reckons the state pension will decline in value in real terms in the future.

Experts at financial advisor Hymans Robertson have already calculated that 30-year-olds can expect to work until they are at least 72.

Increasing life expectancy is a financial drag on pensions as people have to save more to finance a longer period after working.

Office of National Statistics figures show that in the early 1900s, workers spent 9% of their adult life in retirement. Today, it’s 31% due to a better diet and advances in medicine.

Shifting the financial burden

The ONS has already warned that many children born now will live past their 100th birthday and face a real financial problem of funding their later years if they do not start saving as soon as they start work.

Today, a single man wanting a pension income of £25,000 a year at 65 years old needs a pension fund of more than £400,000.

The government is trying to bring about a major sea-change in retirement thinking by shifting the burden of retirement finance to the individual rather than the state.

Auto-enrolment in workplace pensions is the first stage.

But the idea is to give everyone personal responsibility for pension saving and leaving the state pension as a safety net considered as a bonus payment rather than the mainstay of financing retirement.

QROPS for expats

For expats, the state pension is really just a bonus – and for many less than that if they live in a country without a reciprocal agreement that index links the payment.

Issues for expats include government tinkering over pension rules and the inability of leading companies to maintain their defined benefit schemes.

For many expats, a Qualifying Recognised Overseas Pension Schemes (QROPS) presents a self-managed pension option outside the onshore system that can provide real financial benefits.

QROPS offer flexible and wide-ranging investment options that are simply not available to onshore retirement savers.

Some financial jurisdictions offer larger tax-free lump sum pay outs – 30% of the fund against 25% onshore.

Expected changes in state pension age

Age today 

Retire in 

At age 

59 or less



52 or less



46 or less



36 or less



26 or less




Source: Investors Chronicle

The figures are estimates and will be subject to review by the government

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