British Baby boomers need to plan for loss of entitlements as they age

YC45W73DVK8Z Fareed Zakaria, who has his own syndicated show on Sundays on CNN had an interesting take on changing population demographics in the US and their political effects a couple of weeks ago (see video). Last year, Mr. Zakaria wrote a similar article in Time magazine, on the works of Mr. Pete Peterson, a banker and private equity billionaire. In that article Mr. Zakaria presented Mr. Petersons' overriding concern that the long-term outlook for the US economy in the form of massive structural deficits as the baby boomers start retiring in large numbers should be tackled by massive austerity and debt reduction programs. Mr. Peterson apparently confided to Mr. Zakaria, "I want to strengthen the safety net for the poor. But to do so, we have to reform entitlements, because they are simply not sustainable in their current form," Peterson says. "The elderly population is doubling, and health care costs are rising rapidly." His foundation is making the control of health care costs its No. 1 priority. "But we need to start making changes soon, because the longer we wait, the more painful will be the eventual changes".

The exact same arguments apply in equal measure to aging Britons looking for safety nets in their advancing years. Given the current debt load of the UK, it is inevitable that pensions and entitlements will take a hit in the coming years. All the more reason to have QROPS, QNUPS or offshore bonds to plan for a more secure retirement in the face of  eroding state benefits.