No end in sight to pension pain

For many, matters will get a whole lot worse once they reach retirement and struggle to survive on a rapidly diminishing pension – unless, of course, they are among the ranks of failed bankers and other businessmen recently booted from boardrooms to enjoy lives of luxury with gold-plated pensions.

Few companies are now offering employees final salary pensions and many are instead moving towards making the minimum in contributions, while the state pension remains pitiful – one of the lowest amongst industrialised nations.

Until now, those in the public sector have been immune from many of the problems facing their private-sector counterparts. But they, too, could soon face a body blow as their pensions, generously funded by private-sector standards, become increasingly unaffordable.

Some pension funds were already facing substantial deficits even before the recession due to the ageing population. Yet the latest figures indicate councils in the region now have even bigger "black holes" after seeing only a partial recovery in asset values which plunged by billions in the recession. Under current rules, councils are obliged to plug any gaps – leading to the prospect of further council tax rises and service cuts.

Of particular concern is the fact that none of the major parties seem willing implement the major pension reforms that will give the elderly the security that they need.

The Government's new low-cost pension scheme, aimed at people on low or moderate incomes without access to a pension, is unlikely to provide people with sufficient income and will instead benefit many bigger employers tempted to cut back their contributions.

Instead, it will be employees and employers in the decades ahead who will be forced to foot the bill. Not only will they be faced with providing for a growing elderly population through higher taxes, but more and more people will be forced, potentially, to work until they drop.