UK - Most Britons expect to have to retire later but are unwilling to pay for the increasing costs of an ageing population, new research shows.
A survey conducted by Watson Wyatt and YouGov found that while the majority have an understanding of UK demographic trends, less than one in five is willing to pay more than 2% extra in tax or national insurance in order to fund the costs of an ageing society.
The survey also found that over 50% expect significantly more people to have to work to later ages in the future, with a further 38% expecting slightly more people to have to work later. Less than 7% believe fewer people will be retiring later.
It is estimated that an additional expenditure of around 4.5% of GDP needs to be spent on the elderly. Jonathan Gardner (pictured), an economist at Watson Wyatt said: Some of this additional expenditure on the elderly is likely to have to come through state provision and it is liable to involve a significant expansion of the tax base.
“There are also significant additional costs coming from the fact that health care expenditures on the elderly are higher. While in many respects the UK has more favourable demographics and is better prepared than some countries in continental Europe, the ageing population may nevertheless pose macroeconomic challenges.
The survey found that 35% were unwilling to pay anything additional for ageing populations while nearly 23% said they would be willing pay upto 1% or more. 22% said that they would be willing to pay upto 1% to 2% more.
Watson Wyatt's analysis of the survey results found that those who expect little in the way of retirement income from the state were the least willing to pay more in tax and national insurance to ensure the standard of living for pensioners is maintained. Those who are out of the labour market, older individuals and those who expect long life expectancies are willing to pay more.
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