HUMAN RESOURCE MANAGEMENT

Human Resource Management



Human Resource Management

Future of pensions in UK

This section makes emphasis on the future of the pensions in UK over the next twenty years. As the IoD I feel that the future of pensions in UK is not bright. The current pension system in the UK condemned to penury and poverty to millions of citizens, unless it is carried out radical reform. The report presented yesterday by an independent committee, the Pensions Commission warns that 12 million workers are currently saving enough to provide the minimum necessary to live in the moment of retirement. The study states that 30% of pensioners will suffer a reduction in income, if not increase, or taxes, either private savings of every citizen or retirement age. In the absence of a combined solution, state pensions, private or be increased in some 85,000 million euros (14.1 billion pesetas) per year. The root problem is that, as in other Western countries, the birthrate in the UK has declined, while increased years of life of citizens. The aging population means that there are not enough taxpayers of working age to pay pensions. When problem is the growing distrust of citizens in the savings and private pensions also grows, after several scandals and the continuing poor performance of the bag (Armenakis, 2009, p. 293).

The report warns that if the taxes and savings are held at the level of today, the retirement age should be set around 70 years ago and now at 65, to maintain current living standards. The solutions to the crisis involves sacrifices, something always unpopular politician who acts on them. This explains that for several decades, governments, Conservative and Labour have chosen not to make painful adjustments, which the study should have been done 20 or 30 years.

The UK has a mixed pension system consists of a flat-rate pension of public low level completed for some of the employees, by occupational pensions (funds pensions) and, for others, for a pay ungenerous or savings individual. Unlike pension systems in continental Europe, the system Britain is fundamentally based on free choice. This system is inexpensive for the public finances, but it is a source of poverty and inequalities, especially between 40% of employees who receive company pensions to defined benefit and others. Public pensions are a little over 5% of GDP and private pensions in the order 3.5% of GDP. Public pensions have been reduced drastically over the last twenty years in favor of private arrangements. The UK is the only country in Europe to provide a slight decrease in the long term from the public pensions in GDP, despite the increase in the proportion of pensioners in the population. The government promotes a growing reliance on private savings: its purpose is to increasing the share of public pensions by 60% of retirement income today to 40% in half a century. The objective is to provide decent pensions for employees on low incomes, and encourage all assets for their retirement future by ...