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11 Jan, 2012 - Europe’s €30trn pension bomb grows, as expected income reaches 5-year low
Europe’s €30trn pension bomb grows, as expected income reaches 5-year low
According to a study commissioned by the European Central Bank, state-funded pension obligations in 19 of the EU nations has ballooned to almost €30 trillion in projected obligations to their existing populations.
Of which, the report shows that Germany accounts for €7.6 trillion and France €6.7 trillion of the liabilities. Moreover, the ECB predicts that as the rising life expectancy keeps adding to pressures, the proportion of economic output devoted to giving out retirement benefits is projected to rise to 14% by 2060. “This is a totally unsustainable situation that quite clearly has to be reversed”, Researcher at the Peterson Institute for International Economics, Jacob Funk Kirkegaard said. Analysts also commented that the increased retirement ages and lower benefits must be part of any package to hold the 17-nation Euro-area together.
Meanwhile, according to a study for Prudential, the average retirement income that people in the UK expect to receive has reached a five-year low of £15,500. Furthermore, one in five of those retiring this year expect to have to get by on less than £10,000, this compares to the 2008 respondents who anticipated a yearly income of around £18,600.
This therefore continues to prove the importance of planning your own retirement finances privately, as companies and Governments no longer afford to provide a sustainable pension fund. Speak to a deVere Pension Expert today to learn more about planning for the retirement that you deserve.
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