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UK pensions sector in serious trouble

Aside from the fact that UK public sector pension schemes are in disarray, and allegedly looking towards a £50 billion deficit, there are serious concerns about the rest of the UK population. A number of surveys over the last few months have highlighted the fact that only 50% of the UK population are actually making adequate pension fund contributions for their later life. But this is not the only problem!

It has also been revealed that the number of pensioners in the UK has been growing for some time and will continue to grow for many years to come. This will place more and more pressure on the state pension system, which has been falling in real terms for many years, and could see many pensioners of the future living a very low standard of living compared to what they were used to. So why has the situation turned so badly?

There is no doubt that reduced investment returns have played a part in the pension problem but ultimately it is the taxation system which has caused most damage. The UK government is set to reduce tax incentives for higher earners to contribute to their pension schemes, having already introduced a number of tax charges to all pension fund assets in Gordon Brown's tenure as Chancellor of the Exchequer. The accumulation of these changes has led to the situation we face today and unfortunately this large pension ship will be very difficult to turn around!

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