page_title: Pensions crisis
section_title: UK state pension and private pension
hierarchical_section_title: Pensions crisis / UK state pension and private pension
caption_attribution_description: Public sector workers in Leeds, West Yorkshire striking over pension changes by the government in November 2011. At this point the march was heading towards the city centre.
context_page_description: The pensions crisis or pensions timebomb is the predicted difficulty in paying for corporate or government employment retirement pensions in various countries, due to a difference between pension obligations and the resources set aside to fund them. The basic difficulty of the pension problem is that institutions must be sustained over far longer than the political planning horizon. Shifting demographics are causing a lower ratio of workers per retiree; contributing factors include retirees living longer, and lower birth rates. An international comparison of pension institution by countries is important to solve the pension crisis problem. There is significant debate regarding the magnitude and importance of the problem, as well as the solutions.
  For example, as of 2008, the estimates for the underfunding of the United States state pension programs ranged from $1 trillion using a discount rate of 8% to $3.23 trillion using U.S. Treasury bond yields as the discount rate. The present value of unfunded obligations under Social Security as of August 2010 was approximately $5.4 trillion.
context_section_description: Due to the low savings ratio, rapidly increasing longevity, new taxation of pension funds (for instance the removal of the right to reclaim withholding tax on equity dividends), and above all falling investment returns, many pension funds are in difficulties in the early 21st century. Most of these funds have moved from defined benefit (final salary) to contribution-based benefits. Thousands of private funds have been wound up.
  In October 2017 the UK Government implemented a mandatory automatic enrolment system where full-time employees and employers have to make contributions to a workplace pension scheme. The UK Government commissioned an independent review of the State pension age by John Cridland and in 2017, amongst other measures, it proposed increasing the state pension age to 68 and removing the triple lock on state pensions.
caption: Public sector workers in Leeds striking over pension changes by the government in November 2011
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