Financial advisers should plan for a future in which the state pension no longer exists when working with younger clients.
All UK households urged to plan for world where state pension doesn’t exist(Image: )
Future state pensioners are being told to plan for a world where the state pension doesn’t exist. Financial advisers should plan for a future in which the state pension no longer exists when working with younger clients.
That is according to a senior strategist at JP Morgan Asset Management. Karen Ward, the firm’s chief market strategist for EMEA, issued the warning while speaking at the Let’s Grow conference hosted by Parmenion.
Ms Ward said the UK is setting the scene for the youth of today to have a “very nasty old age”. She also noted that trust in financial services in the UK has never recovered from the financial crisis of 2008.
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Advisers should consider putting “not having a state pension” into younger clients’ spreadsheets as an option, Ms Ward said.
Ms Ward said her time in government shaped her thinking about the sustainability of the UK’s welfare state.
She said the UK may not be in a position to look after people financially in the future.
Responding to the warning, one future retiree said: “If the UK’s state pension was removed, it could leave people more financially vulnerable in retirement? Something of an understatement!
“A terrifyingly large number of people would be begging on the streets, sleeping rough and be vulnerable to all manner of adverse health issues.
“For a while, Greece was barely able to pay its State Pensions but has just about managed to recover by implementing drastic reforms, imposing severe cuts in various areas and restructuring its entire system following its debt crisis.
“I cannot believe the UK would ever allow such a state of affairs to develop.”
A second said: “Yes, very valid. But when it comes to younger people it isn’t pension advice they need – they need to seriously consider emigrating.”
A third said: “Given the state pension is a huge Ponzi scheme it will implode at some time and that time is getting closer and closer
“Given that the Tax we pay today (in some way) pays for today’s pensioners, Governments allocation for this seems to get lower and lower on the list of priorities year on year
“A political time bomb that no-one wants to address let alone fix they just keep pushing the NRA back and back.”