How old are you before you are dependent?

The current retirement ages are 60 for women and 65 for men. There are plans in the pipeline to change these, with the retirement age for women increasing to 65  by 2020 and for both men and women to 66 by 2026. Although the new government has committed to reviewing the date at which the increase to 66 takes place, guaranteeing it will not be earlier than 2016 for men and 2020 for women.

The Office of National Statistics (ONS) calculates a statistic based on the retirement age called the old age dependency ratio; this is the number of people old enough to be entitled to the state pension per thousand of the population.

The ONS reported that in 2008 there were 310 people of state pension age for every 1000 people in the population and this has remained relatively steady for the last 20 years.  Looking forward and taking into account the currently planned increases in state pension age they have estimated that by 2021 the will be 311 people of state pension age by 2021 and 343 by 2051.

This may not seem too bad, but the ONS also calculated what would happen if state pension age was to remain as it is. Then the ratio would grow to a whopping 376 by 2021 and a massive 495 by 2051!

Is our pension system slipping into retirement?

Stumble? You can barely move for tripping over dire warnings about the paucity of the nation’s pension savings.

Over the past few weeks, it’s been hard not to have been floored by a handful of heart-stoppers.

Nearly half of workers approaching retirement fail to put aside any cash on a monthly basis, insurer Aviva warns.

Its report targeted a demographic that proved unsettling, suggesting that those currently between 55 and 64 have amassed fewer savings; carry larger mortgages; and are less likely to own their home than those who had already retired.

The size of the sums might surprise you but people in this age group typically nurtured roughly £8,600 savings, it found (and, worryingly, 20% still owe more than £75,000 on their mortgage). … Continue Reading