We all know that we will have to work longer and save more to live comfortably in our retirement because life expectancy rates have soared, but the revelation that a shortfall of £800 billion might be experienced by 2050 could come as quite a shock.
The International Monetary Fund (IMF) has warned that this is a distinct possibility, while it has also been revealed that countries might be underestimating how much longer we may typically live for in the future by up to three years.
The IMF went on to reveal that this excess cost is the equivalent of half of current gross domestic product (GDP) for most developed countries. For the UK, for example, the figure is the equivalent of 59% of the country’s GDP in 2010.
Future governments could be forced to fork out hundreds of millions of pounds as a result, while the IMF revealed that the excess cost could be passed on to the taxpayer.
Its report said: “With the private sector ill-prepared for even the expected effects of ageing, it is not unreasonable to suppose that the financial burden of the unexpected increase in longevity will ultimately fall on the public sector.”
The importance of saving for retirement should not be underestimated, which is why this guide to starting a pension is a must-read for those of you who have not got round to doing so.