Survey shows UK and US Pensions Crisis is Imminent

Survey shows UK and US Pensions Crisis is Imminent

  • Both UK and US drop in Global Retirement Security Rankings
  • US falls due to sharp income inequality and reduced workforce to support retirees
  • UK is two spots away from being in the bottom 10 for government indebtedness
  • FCA's Andrew Bailey says "clear risk" that savings rate for retirement is too low
  • UK's retirement savings gap set to widen to £2.3trn due to automation of jobs
  • UK expected to fall into major pensions crisis by 2028

pension crisis

The economics of retirement funding is at breaking point. Thanks to low interest rates, looming inflation rates and slow growth the future of our retired populations are at serious risk.

Currently there are 600 million individuals placing pressure on already-established retirement systems. This is set to get worse as the results of the last decade of financial experimentation show themselves and ageing populations widen the cracks in our economies.

Most pension schemes were formed in a time when manufacturing and traditional bricks and mortar business were the pinnacle of Western economies. This is no longer the case. Globalisation has seen countries switch to service economies. Our financial planning has failed to keep up.

Both the United States and United Kingdom are performing so badly in retirement planning that they have dropped rankings in the Global Retirement Security Rankings.

The global retirement crisis is playing out against a backdrop of a much greater economic crisis. There is slow economic growth across major nations, rising inflation levels and a major debt crisis. No-one really knows how this is going to end.

No stranger to the United Kingdom

Natxis' Global Retirement Security Rankings sees the United Kingdom drop one place from last year. This is mainly due to a fall in it's health score.

It is its finances sector though which is bringing it down the most and a point of real concern for pensioners of the future.

Natxis explains:

The UK still ranks in the bottom 10 for the Finances sub-index, despite improving in both rank and score from last year. For the second year in a row, it scores 1% in the interest rates indicator and is only two spots away from being in the bottom 10 for government indebtedness.

The U.K. is no stranger to pension crises. In the last five years we have sadly seen what bad planning, mismanagement and lack of government oversight can mean for pension funds. Tata Steel, Woolworths and BHS are just some that come to mind.

A Pensions and Lifetime Savings Association report finds that three million workers with final salary pensions have 50% chance of losing up to fifth of their income because their employers have made unaffordable promises.

The PLSA data finds the most vulnerable employers have a 50:50 chance of not having an insolvency event in the next 30 years:

“More than 11 million people rely on defined benefit pension schemes for some or all of their retirement income but there is a real possibility that without change we will see more high profile company failures such as BHS or Tata Steel."

Former pensions minister Steve Webb told City A.M. that he agrees:

"It's not enough money. It's just brutally not enough money going in,"

Just this week FCA Chief Executive Andrew Bailey made a point of the dangers looming for retirees, in his annual Mansion House speech:

“There is a clear risk that the savings rate for retirement is for many people too low to meet their expectations of retirement.”

For future workforces the situation is unlikely to improve. Last month pension consultants Hymans Robertson warned that a third of UK jobs were at high risk of automation by 2030.

The FT reported:

“If one in three jobs are at risk of automation by 2030, as estimated, then this would mean retirement shortfalls increase to £2.3tn, or one year’s current UK economic output.”

Poor State of the United States

The United States' new ranking puts it below the Czech Republic and Belgium. It dropped three places, down to 17th place in a global index of 25 countries.

Index producers, Natixis, explain that 'While the country has the fifth- highest income per capita, inequality remains an area of concern given it has the sixth-lowest score for income equality.'

US retirement security index

This does not help pension contributions. Research shows that Nearly 40% of U.S. workers are not offered any payroll savings options. Around 30% of American workers have no retirement savings at all.

Families do not have retirement funds

As in the U.K. there are a number of studies that work to estimate the size of impending retirement crisis, each with varying (but all worrying) results.

The most pessimistic is from the National Institute for Retirement Security. The Institute finds that 84% of American households are falling short of acceptable retirement savings targets. They estimate that total household undersaving may reach $14 trillion.

When it comes to government run plans, the shortfall is just as depressing. Andrew Biggs of the American Enterprise explains:

Estimates of total funding shortfalls for government-run plans range from a low of $14.3 trillion to a high of $26.1 trillion. The higher estimates are generated by economists who seek to more accurately measure the benefit liabilities of public sector pensions.

In regard to the U.S. the WEF concluded that the situation was as dire as it was for the U.K. 85% of the retirement savings shortfall is in government plans, with corporate plans making up 2% and households the remaining 13%.

How to solve a problem like retirement

We need leaders to take note of the retirement problem and recognise it for what it is: a looming crisis. Public policy is the only real way over 600 million Westerners are going to be supported in what is currently looking like a dire situation.

Currently governments are adopting a 'wait-and-see' approach. See the recent UK pension dramas of Woolworth, Tata Steel and BHS. None of those were a surprise, people must have known they were coming for years. But it took a last minute call to the government to try and solve the problems.

'Luckily' the UK government could just magic up some money to either stump up the pension pots or force those responsible to do the same. The problem is, there is a £1.5 trillion pension shortfall at the moment. This is set to grow, the British government is broke. They cannot keep balling out retirement funds.

Right now companies who cannot afford to pay the pensions they have promised staff will have their pension schemes rescued by the Pension Protection Fund, government service. Those affected may receive up to a fifth lower than what they were originally promised.

In the U.S. politicians have promised deal with this upcoming crisis through a combination of expanded Social Security benefits and new state-sponsored retirement.However, this doesn't work for political gains.

Andrew Biggs explains:

In government, by contrast, the incentives are in the wrong direction. When government retirement plans are underfunded, politicians can keep current taxes low while handing the bill to future generations. And of course future generations don't vote in today's elections. This explains why Congress has done nothing to fix Social Security, despite knowing since the late 1980s that the program needs reforms.

Sadly the 'solution' offered by large think tanks and government bodies is that we just need to figure out how to get people working for longer:

“Policymakers do need to be thinking now about how to integrate 75- and even 80-year-olds in the workplace,” Michael Drexler, head of financial and infrastructure systems for the WEF told The Financial Times.

Getting people to work longer is ok in theory but in reality it's not practical. One just needs to look at the medical bills for the elderly and realise this.

Ultimately, the key is to generate sufficient economic growth to plug the gap. But we come full circle, governments appear to have no plan as to how to make that happen. We need to take responsibility.

Do not rely on employers and the government in retirement

As we recently discussed, the OECD believes the UK's pension deficit to be far greater than aforementioned UK bodies have assessed.

In May they estimated that the pension shortfall is higher than £6.2 trillion. The OECD expects it to increase by around 4 per cent per year, reaching more than £25 trillion by 2050.

Following a month of political party conferences in the U.K. and a year of Trump's election pledges, there has been little mention as to how the looming deficit will be managed.

It is vital that savers and investors begin to take responsibility for their own pensions and ask questions. Most importantly one must ask if you can hold gold as part of your pension.

The economy shows that whilst stock and bond markets have done well in the short term and they are artificially overvalued. Once again this is with thanks to the easy monetary policies of central banks and governments.

This is where gold plays a key role.

Dr. Constantin Gurdgiev, formerly an adviser to GoldCore, says the following about the importance of having gold in your pension:

“Gold is a long-term risk management asset, not a speculative one.

As such it should be analysed and treated predominantly in the context of its role as a part of a properly structured, risk-balanced and diversified portfolio spanning the full life-cycle of the investment and pension horizon for individual investors and those with pensions.

Whether they be SIPPs in the UK or IRAs in the USA.”

Investors in the UK and Ireland, the US, the EU can invest in gold bullion in their pension, through self-administered pension funds.

UK investors can invest in gold bullion through their Self-Invested Personal Pensions (SIPPs), Irish investors can invest in gold in  Small Self Administered Schemes (SSAS) and US investors can invest in gold in their Individual Retirement Accounts (IRAs).

The pension crisis is a multi-trillion dollar/pound crisis. It is not going to go away. Adding gold to your pension is a key way to protect your retirement from the pensions time bomb.

Pension funds, throughout the West, have a distinct lack of diversification when it comes to assets. This has cost pension holders a huge amount of money and places their future livelihoods and risk.

Gold has an important role to play over the long term in preserving and growing pension wealth. You can read our guide about how to invest in gold in a pension in the UK here.

News and Commentary

Gold prices steady ahead of U.S. payrolls data (

Gold settles lower, builds on a weekly loss (

U.S. jobless claims fall; rise in exports helps narrow trade deficit (

Crypto Coin Sales Get Fresh Regulatory Scrutiny as ECB Weighs In (

US Mint Gold-Coin Sales Drop to Decade Low: Chart (


Gold Investment In Germany Surges To €6.8B In 2016 (

Why Precious Metals Are The Better LONG-TERM Store Of Value Over Bitcoin (

U.S. Treasury increased the public debt by $318 billion (

Europe Could See Another Brexit-Like Rupture—Beyond Spain (

Puerto Rico Is Running Out of Money (

Gold Prices (LBMA AM)

06 Oct: USD 1,268.20, GBP 970.43 & EUR 1,083.93 per ounce
05 Oct: USD 1,278.40, GBP 969.28 & EUR 1,086.51 per ounce
04 Oct: USD 1,275.55, GBP 960.87 & EUR 1,085.11 per ounce
03 Oct: USD 1,270.70, GBP 959.00 & EUR 1,081.87 per ounce
02 Oct: USD 1,273.10, GBP 956.48 & EUR 1,084.55 per ounce
29 Sep: USD 1,286.95, GBP 963.15 & EUR 1,090.82 per ounce

Silver Prices (LBMA)

06 Oct: USD 16.63, GBP 12.73 & EUR 14.20 per ounce
05 Oct: USD 16.66, GBP 12.64 & EUR 14.19 per ounce
04 Oct: USD 16.83, GBP 12.67 & EUR 14.29 per ounce
03 Oct: USD 16.61, GBP 12.53 & EUR 14.13 per ounce
02 Oct: USD 16.58, GBP 12.46 & EUR 14.12 per ounce
29 Sep: USD 16.86, GBP 12.60 & EUR 14.27 per ounce

Recent Market Updates

- Yahoo Hacking Highlights Cyber Risk and Increasing Importance of Physical Gold
- Safe Haven Silver To Outperform Gold In Q4 And In 2018
- Plan For Run On The Pound
- Russia Gold Rush Sees Record Reserves For Putin Era
- China Catalyst To Send Gold Over $10,000 Per Ounce?
- Gold Matches S&P 500 Performance In First 3 Quarters; Up 12% 2017 YTD
- Gold Standard Resulted In “Fewer Catastrophes” – FT
- Financial Advice From Man Who Made $1+ Billion in 1929 – Importance Of Being Patient and “Sitting”
- “Gold prices to reach $1,400 before the end of the year” – GoldCore
- Commodities King Gartman Says Gold Soon Reach $1,400 As Drums of War Grow Louder
- Bitcoin “Is A Bubble” but Gold Is Money Says World’s Biggest Hedge Fund Manager
- Pensions and Debt Time Bomb In UK: £1 Trillion Crisis Looms
- Gold Investment “Compelling” As Fed May “Kill The Business Cycle”
- “This Is Where The Next Financial Crisis Will Come From” – Deutsche Bank

Important Guides

For your perusal, below are our most popular guides in 2017:

Essential Guide To Storing Gold In Switzerland

Essential Guide To Storing Gold In Singapore

Essential Guide to Tax Free Gold Sovereigns (UK)

Please share our research with family, friends and colleagues who you think would benefit from being informed by it.


Luc X. Ifer Silver Savior Sat, 10/07/2017 - 22:50 Permalink

The problem is the people of today define their life by non essential, ephemeral pseudo-values instead of essentials, proven core values needed for safe & prosperous survival. Highly recommended, this episode of the Black Mirror SF series - Nosedive, an eye opener - a scary one, into our reality and near future owned by the lords of the internet & social media

In reply to by Silver Savior

Silver Savior Sat, 10/07/2017 - 20:16 Permalink

What's a pension? lol. Have not heard of those since the 1980s We have these self funded things called 401ks that I won't invest in anymore because I want to defund the stock market, keep my money out of the market and buy precious metals every month instead because gold and silver do not go to zero like the dollar does. You can have a 401k balance a mile high but what will it buy you later? Ummmm nothing. Do people think when they do their reset they will fully fund all those retirement accounts? Not from my research. A reset is that exactly. A reset!

Pernicious Gol… Sat, 10/07/2017 - 22:05 Permalink

It may be prejudice, but I just can't read anything written by somebody too stupid to understand apostrophies.So long as people think somebody else is responsible, they will be lazy. Saving for retirement will not occur until plenty of old people who didn't save money begin dying of starvation and exposure.

Thethingreenline Sat, 10/07/2017 - 23:57 Permalink

On the count of three children,
Bash the pensions,
Bash the pensions,
Bas the pensions
Propaganda for the mind,
Fake news!
They regurgitate this to split the nation, convince the pensioners to give up what is theirs,
And they pocket the booty.
These pensions could be shored up with minimal difficulty, if they need shoring up at all!
Don’t fall for the lies!


Dr. Bonzo Sun, 10/08/2017 - 03:09 Permalink

The PLSA data finds the most vulnerable employers have a 50:50 chance of not having an insolvency event in the next 30 years... 50:50 chance. 30 years. Imminent. Yawn.

Thoresen Sun, 10/08/2017 - 05:20 Permalink

Why would you put gold bullion into a UK SIPP? As the gold is free of capital gains tax there is absolutely no point tying it up in a SIPP.

JPMorgan Sun, 10/08/2017 - 06:44 Permalink

Pension Ponzi.It does not blow up because Fred is paying for Bob's retirement.There is a growing hole in pension finances but it's greatly offset by the ratio of those paying in to those drawing pensions.Basically what I'm saying is pensions inbalances have not yet reached critical mass.And of coarse goverments will no doubt kick the can at some point by moving the official retirement age to a higher threshold. Same old thing... you pay into something all your life, you are a couple of years away, then your health goes to shit and you die. 

GreatUncle Sun, 10/08/2017 - 07:18 Permalink

No way out there is really no point in speculating on it further.Government made promises on pensions, to take taxes for a pension later (1908 or so this started, pressure from industrialisation).Made the same promise over and over taking ever more taxes but the corruption of state did not fund the pension component.With all the tax stealng many would not have excess to save and that is now being blamed when taxation and promises were the real offenders.Government also do this with most of the services they provide ... and like everything else the % able to get anything from it is dwindling.Healthcare, education, etc. etc. 

JailBanksters Sun, 10/08/2017 - 08:41 Permalink

I've got one solution, no really there is ONLY one solutionPrint, yawn, Baby, yawn, PrintYou can call it whatever the hell name you like, but the bottom line is ALWAYSMaybe I should patent "Reverse Skittle Backscatter" as a replacement name for QE

indygo55 Sun, 10/08/2017 - 09:51 Permalink

The wait and see program is basically waiting to see how many deserving and paid up retirees die in the coming years. Anyone with a brain, and these people thought this all out know that the only way anyone gets 100% of what they expected is if a lot of others die before collecting. Obese and drug addled retirees don't last long, especially when they are nudged over the precipice by dangerous drugs and poor health. 

TeethVillage88s Sun, 10/08/2017 - 12:52 Permalink

$T Debt Added
J. Carter, ,$0.37 T (4 yrs)
R. Reagan, $1.69 T
G. H Bush, $1.4 T (4 yrs)
W. Clinton, $1.627 T
G. W. Bush, $4.357 T
B. Obama, $6.365 T (4 yrs)
B. Obama, $10 T (8 yrs est.)

1994 - NAFTA, Deregulation of Trade, 3 Nations (W. Clinton)
1994 - Free Trade Begins to Devastate US Manufacturing Jobs,
1996 - Energy Deregulation (W. Clinton, followed by ENRON Scandal)
1996 - Telecommunications Act (W. Clinton, cross ownership)
1998 - Citicorp & Travelers Insurance Merger
1999 - Gramm–Leach–Bliley Act (Phil Gramm, W. Clinton, followed by 2008 Financial Crisis)
1999 - bombing campaign in Kosovo (W. Clinton, over 60 days)
2000 - Commodity Futures Modernization Act of 2000 (P. Gramm, W. Clinton, derivatives)
2001 - Subprime Home sales & Financial Derivatives Take Off,
2002 - McCain–Feingold Act (G.W. Bush, Campaign Finance, soft money unlimited)

Paul Volker
Larry Summers
Robert Rubin
Hank Paulson
Timmothy Geithner
Ben S. Bernanke
Alan Greenspan
Janet Yellen

who might be responsible and held accountable?

Office of the Comptroller of the Currency, John C. Dugan, John D. Hawke
Treasury Secretary, Jack Lew, Timothy Geithner, Henry Paulson, John Snow, Larry Summers, Robert Rubin
FDIC Chairman, Martin J. Gruenberg, Sheila Bair, Donald E. Powell, Donna Tanoue
SEC Director, Mary Jo White, Elisse Walter, Mary Schapiro, Christopher Cox, William Donaldson, Harvey Pitt, Arthur Levitt
FINRA Directors, Mary Schapiro,
DOJ Director, Eric Holder
FBI Director, Robert Swan Mueller III, James B. Comey
President of the US, Barack Obama
Obama National Security Advisor

1971, Nixon Shock, President Nixon consulted chairman Arthur Burns, John Connally, Paul Volcker.

2017 Committee Members

Janet L. Yellen, Board of Governors, Chair
William C. Dudley, New York, Vice Chairman
Lael Brainard, Board of Governors
Charles L. Evans, Chicago
Stanley Fischer, Board of Governors
Patrick Harker, Philadelphia
Robert S. Kaplan, Dallas
Neel Kashkari, Minneapolis
Jerome H. Powell, Board of Governors
Daniel K. Tarullo, Board of Governors

looking back to 1970 to see who was there for Smithsonian Accord (Nixon Shock). Chairman:

9th William M. Martin, Apr 2, 1951 - Feb 1, 1970
10th Arthur F. Burns, Feb 1, 1970 - Jan 31, 1978
11th G. William Miller, Mar 8, 1978 - Aug 6, 1979,
12th Paul Volcker, Aug 6, 1979 - Aug 11, 1987
13th Alan Greenspan, Aug 11, 1987 - Jan 31, 2006

President of New York Federal Reserve:

4th Alfred Hayes, Aug 1, 1956 - Aug 1, 1975,
5th Paul Volcker, Aug 1, 1975 August 5, 1979,
6th Anthony M. Solomon, Apr 1, 1980 - Dec 31, 1984,

1. Rothschild Banks of London and Berlin.
2. Lazard Brothers Banks of Paris.
3. Israel Moses Seif Banks of Italy.
4. Warburg Bank of Hamburg and Amsterdam.
5. Lehman Brothers of NY.
6. Kuhn, Loeb Bank of NY (Now Shearson American Express).
7. Goldman Sachs of NY
8. National Bank of Commerce NY/Morgan Guaranty Trust (J. P. Morgan Bank – Equitable Life – Levi P. Morton are principal shareholders).
9. Hanover Trust of NY (William and David Rockefeller & Chase National Bank NY are principal shareholders).


Like to see reform & New leadership? Not a chance in hell.


Jeff Reeves editor ( @JeffReevesIP )…
Ed Bartholomew consultant pension financial management ( @e_bartholomew )
Jeremy Gold Society of Actuaries / American Academy of Actuaries ( @jeremygold )

Anon2017 TeethVillage88s Sun, 10/08/2017 - 13:40 Permalink

You forgot President Johnson, who launched his expensive Great Society programs and an expensive war in Viet Nam after pushing through Congress the "Kennedy Tax Cut" of 1964. It started the country down the road of irresponsible fiscal policy. There is lots of blame to go around. As a country, we are not as exceptional as the old windbags in Congress would have you believe and the state of the union certainly is not strong. 

In reply to by TeethVillage88s