PricewaterhouseCoopers (PWC) – a leading consultancy firm – announced this week that they believe the state retirement age in the UK could have to be raised to 70 by 2050.
PWC cite an ageing population and an increase in government debt (due to the recession) as the key reasons why the retirement age would need to be increased. The government has already announced that the state retirement age will increase to 68, from the current age of 65, by 2046.
It is never too early to start thinking and planning for your retirement and Moneybasics has lots of helpful information on the different ways to prepare for retirement. Click here for more information.
Here is a review of the other top money stories of the past week commencing 22 February 2010.
In-store credit agreements are a costly deal – According to the Finance and Leasing Association (FLA), more and more families are turning to in-store credit agreements to fund purchases. These deals often provide a deferred payment period or a period of interest-free credit but many also come with high interest rates. Debt experts warn that, however tempting these deals may seem, they are really encouraging people to spend more than they can afford. Items commonly bought on credit include washing machines, dishwashers, entertainment systems, furniture and jewellery. The FLA’s figures reveal that consumers spent 17% more using credit deals in December 2009 than in 2008.
Childcare costs rise above £200,000 – The average cost of raising a child to the age of 21 has crashed through the £200,000 barrier for the first time according to the latest annual report published today by LV=, the UK’s largest friendly society. The report found that parents are typically shelling out £9,610 a year to feed, clothe and educate each new member of their family. The new total of £201,809 does not include private school fees but nonetheless highlights the expense that even a state education can cost families with thousands of pounds being spent on uniforms, sports equipment and extra costs such as school trips. In total, education-related costs added up to an average of £52,881. The new findings show that childcare costs remain the biggest single cost for families with the possibility of bills amounting to as much as £54,696 for one child between the ages of six months and 16 for a typical household where both parents are working. This includes nursery fees, after-school clubs and holiday clubs. LV=’s figures also showed how the cost of raising a child also peaks during the university years (age 18-21), when parents could face having to pay out a staggering £13,677 a year.
Five million Britons permanently overdrawn – Analysis from the product comparison website Moneysupermarket.com has suggested that five million Britons are permanently overdrawn and rising inflation could force more to live on their overdrafts. The website’s research shows 1 in 10 current account customers were overdrawn the whole year round, a further 12% drop into the red at least five times a year, while 38% of current account customers have used their overdraft at least once during the past year. With unemployment still high and inflation rising many people are expected to continue using overdrafts as a way of managing their domestic bills and rent. However, with different current accounts charging varying amounts for overdrafts it is important that people choose the right account so that they do not pay excessive fees and charges.
UK economy grows faster than expected – The UK economy grew by 0.3% in the final three months of last year, as it officially escaped from recession. Initial estimates released last month said the UK economy had grown by 0.1% in the last quarter of 2009 but the most recent figures from the Office of National Statistics showed that growth in the economy was faster than expected. The economy had previously contracted for six consecutive quarters – the longest period since quarterly figures were first recorded in 1955. The UK, the last major economy to escape recession, is expected to see sluggish growth during 2010 with many fearing that the UK could slip into recession again.