As Vladimir Putin deals with a backlash over a proposed increase for the Russian state pension age, Stuart Price, Partner and Actuary at Quantum Advisory, looks at pension problems across Europe.
Stuart said: “From companies going bust, huge deficits and increasing life expectancy, the UK has its fair share of pension issues. However, we’re certainly not alone.
“Russia has announced plans to increase the retirement age for women from 55 to 60, and 65 for men, up from 60. Putin has sited the decrease in the working population as the reason, but has faced an outcry from the public who say they won’t live long enough to claim a pension. With the average life expectancy for a Russian male being 66, you can see their point. In the UK, our retirement age is 68, but the average Brit lives until they are 81. With mortality a key assumption when setting the retirement age, and people reportedly living longer, many countries across the EU are increasing the age at which workers can retire. France, Spain, Germany and Denmark have raised the retirement age from 65 to 67 with Denmark also moving away from pensions with a guaranteed profit to low or non-profit schemes. In Sweden, employee pensions are primarily taken care of by life insurance companies and Switzerland is in the middle of a pension reform – although presently, it is undecided just what the reform will be.
“The pension shake-ups across the globe are undoubtedly needed and will go some way to futureproofing our retirement plans, however, I do believe more still needs to be done. In this country, the self-employed and lower earners need to be included in the government’s successful auto enrolment scheme and minimum contributions need to be further raised. I don’t think any one country has the perfect pension formula, but the very fact we are all working towards one, is a hugely positive step.”