This chapter outlines the main reasons for the emergence of the pensions crisis, and how most of us are affected.
There are lots of reasons for the emergence of the pensions crisis, but there are two main ones: people are living longer, and investment returns have dropped.
Because of continuing improvements in health we are living much longer than we used to. The positive side is that we can expect to live much longer in retirement. But because we are living longer, our retirement will cost more in total. In financial terms, pensions are therefore much more expensive than they used to be, simply because they will have to pay out for longer than they used to.
Interest rates and investment ...