Longer life ‘could cause debt problems’
Britons who live longer could be responsible for increasing debt problems nationwide, according to the Bank of England.
In its quarterly bulletin, the bank advises that the increased cost of providing company pensions to retirees could ultimately be borne by consumers.
“An increase in longevity means the pension is paid over a longer period, raising its total cost,” the bank explains.
“Ultimately households as shareholders of companies and taxpayers will bear that cost, through lower dividends or higher tax payments.”
Meanwhile, members of the population with existing debt problems are reminded that they may need to save more money than in previous years in order to fund their own retirement.
The bank suggests that a combination of later retirement and increased saving could be the only option to avoid a lower standard of living in later life.
Monetary policy committee member Andrew Sentance warns that while individuals may benefit from their parents’ savings when young, an increased personal burden develops with age.
Those facing debt problems may welcome professional assistance to help them accumulate savings of their own.
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