A new report from the Centre for Policy Studies (CPS) has established that 52% of households in Britain receive some form of welfare support.
This includes the obvious candidates such as pensions and direct payments to those not in work, but also benefits in kind such as access to education and healthcare.
With the recent overhaul of benefits resulting in the rolling out of Universal Credit, the Coalition hopes to reduce this figure by decreasing spending in this area.
It is intended that this streamlined service will save government money by reducing error and fraud, as well as altering the criteria by which applicants are awarded support.
This new focus on welfare spending brings inevitable questions for parts of the population who are aging and expecting to rely on the state pension when they retire.
Retired households make up a large proportion of welfare dependency due to their receipt of the state pension. The government is planning a review of state pensions in 2016 and has already abolished the Default Retirement Age, with a clear intention of people working and contributing for longer.
The government is also encouraging individuals to start saving into a private pension or ISA, and it seems that this could be a sensible move as state support looks likely to decrease as time goes on.
Added to this are predictions from many quarters that in the future the age to begin receiving the state pension will rise.
Suggestions that retirement could come as late as age 84 by 2050 means that people who make their own financial plans in advance of new laws will gain greater flexibility in their life plans.
Personal finance expert Sue Hayward, who recently commented on the launch of pension planning tool Retiready, cautions, “even for those of us who are saving, it’s rarely a case of being able to sit back and do nothing. The news that 42 per cent of us have never checked the performance of our retirement savings should be a real wake-up call.”
For this reason, Britons who wish to ensure that their future is a relatively comfortable one may gain from making private retirement provisions if they wish to remain in control of their future.
They will then be able to retire early or plan for ill health or changing circumstances in old age.
