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Number of UK pensioners set to rise by 40%

UK – The Government Actuary’s Department says the number people over pension age in the UK is set to rise more than 40% to almost 15 million by 2039.

The GAD projects that the current 10.5 million that are over pension age will reach 11.7 million in 2010.

“Between 2010 and 2020, during which time pension age for women is set to be raised to 65 on a phased basis, the numbers over pension age remain almost constant.

“After this the numbers over pension age rise more rapidly to a peak of nearly 15 million, over 40% above the current numbers.”

The GAD says that without the rise in female pension age, the numbers would have been two million higher. The changes in those of working age was “much less dramatic”, GAD said.

It added that the pension support ratio, the ratio of workers to pensioners, is set to fall to 2.4 in 2060, from 3.3 at the moment.

The figures are contained in the GAD’s five-yearly review of the National Insurance Fund and have been presented to parliament by chief actuary Chris Daykin.

Meanwhile, the UK’s main actuarial body, the Association of Consulting Actuaries, has expressed alarm about the government’s plans to set up a pension insurance fund based on the US Pension Benefit Guaranty Corp.

“The ACA is alarmed that the model for the UK scheme - the US Pensions Benefit Guaranty Corporation - has just announced that its deficit has increased to 8.8 billion dollars,” the ACA said.

"The economic cost of the insurance should be carefully quantified and projections of the costs under various scenarios should be provided,” added ACA chairman Gordon Pollock.

“Risk projections should also be carried out if it is the intention that the PPF is invested in non-matching assets, such as equities. We have offered assistance to the government in these areas.”

Pensions minister Andrew Smith said earlier this month that the government would learn the lessons of the PBGC.

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