By 2063 the UK state pension bill will quadruple
State pension bill to quadruple in 50 years
From today’s £94bn the cost will reach £438bn by 2063, according to updated projections from the Office for National Statistics
Richard Dyson By Richard Dyson4:03PM GMT 10 Dec 2013Follow CommentsComment
State pension costs are set to double by 2033 and then double again by 2063, figures released by the Government’s Office for National Statistics show. In 50 years’ time the £438bn cost of the State Pension will equate 9.4pc of GDP – compared to today’s £94bn bil, which is 7.1pc of GDP.
Figures published by the ONS in the latest edition of its “Pension Trends” also reflected the dramatic changes being ushered in, such as the introduction of the single tier pension. As the current generation of pensioners die off, more people will move onto the singe-tier system – which explains the rapid escalation of the cost of this element.
The data also shows the stark, current imbalance between state pension paid to men and women.
Only 46pc of women pensioners received the full basic state pension in 2012, compared to 80pc of men.
“The difference between men and women is because many women in the current generation of pensioners failed to build up a full or near full BSP entitlement under the old system because of broken work histories and part-time work patterns,” the ONS said in accompanying notes.
Vince Smith-Hughes, retirement expert at insurer Prudential, said: “Recent changes have made the pension system fairer for women. However, many women who are over the age of 55 will fail to qualify for the full basic pension as many will have had career breaks to raise families.Taking the full picture of total pension provision into account, our research shows that the pension ‘gender gap’ is 13 per cent wider this year than it was in 2012. The average woman retiring this year expects an income which is £6,500 less than the average man.”