T
he lights on the UK’s pensions dashboard are flashing red, again. The government is not ignoring the issue but, for reasons I will come to, that is part of the problem.
Anyone looking for the quick answer to what they should do about the crisis should save as much as you can, preferably in a generous workplace pension. However much you’re saving already, it wouldn’t hurt to save a bit more.
Why am I so pessimistic? First, because of the economic context in which we find ourselves. The state pension now costs about £135 billion a year and is set to keep rising, thanks to an ageing population and the triple lock, which guarantees increases.
Official public debt (which excludes unfunded public sector pension schemes) is about 100 per cent of GDP, the tax burden is at a 60-year high, growth is stagnating, unemployment is rising, the budget deficit isn’t shrinking and the rate that the government pays on its debt is now consistently and significantly higher than it was during the mini-budget, when Liz Truss was alleged by many to have “crashed the economy”.
