By: Financial Times
August 26, 2019
Retired people in the UK will on average outlive their savings by more than 10 years, according to research underlining the strains on global retirement systems.
The report by the World Economic Forum suggests the average female in the UK will outlive her savings by 12.6 years; while for men the gap is 10.3 years.
Of the six countries analysed by the WEF, only two others — Japan and Canada — faced bigger retirement shortfalls for females. Women in Japan were expected to outlive their savings by nearly 20 years.
“These shortfalls must be addressed, by both individuals and policymakers, to ensure that seniors can enjoy life throughout their non-working years,” said the WEF.
The analysis modelled expected retirement outcomes for common default investment strategies of defined contribution pension systems for eight countries, including Australia, Canada, China, India, Japan, the Netherlands, the UK and the US.
Defined contribution schemes have become the dominant form of pension provision around the world, following the decline of traditional employer backed “defined benefit” plans, where a secure pension is backed by an employer.