LONDON -- An important report on the pension crisis facing Britain was published Oct. 12. The report by the Pensions Commission, chaired by Adair Turner, a former director of the Confederation of British Industry, warned that, because of increased longevity and a shortfall in pension funds, British pensioners face penury unless taxes are raised substantially, savings rise significantly, or the age of retirement is extended.
Indeed, measures to effect all three conditions may be necessary in the long run. The government has decided to await a further report from the Commission on the ways of tackling the issues involved. That report, fortuitously for the government, is not expected until after the next election (probably in 2005 but not due until 2006).
The British have been living in a fool's paradise, believing that their system of low state pensions, combined with private pensions funded by companies and individual contributions, would ensure that the cost of providing pensions for an aging population would be much less than in countries where pensions are largely covered by taxes and contributions from workers.