Challenges facing the new government

My email inbox is filling up with experts’ views on what the new government should do to rescue Britain’s economy but here’s one that caught my attention from PwC.

It’s a video discussion involving John Hawksworth (head of macroeconomics) on immediate economic issues and where taxes are likely to rise, Jon Sibson (head of public sector) on the impact of public sector cuts and Julie Mellor (public sector partner) on the looming challenges for the state of an aging population and how this Government will need to begin to address them.

The video is only 7 mins long and can be accessed here:

If you don’t have time to watch the video then here’s a couple of selected quotes from it: 

Mellor on the looming challenges for the state of an aging population:

“I think one of the most profound things is the challenge of dealing with our aging population. Over the next couple of decades we’ve got the double whammy of the retirement of that large group of baby boomers who were born between 1945 and 65, plus the on-going – we all live longer – which means that age related spending for government is going to go up and there are labour market issues for employers – who are our clients for example. So as fast as we reduce, we’ve got a problem going the other direction.

“Well, one of the things we’ve recommended to Government is that they increase the state pension age. They are already planning to increase it to 68 by 2046 and we are recommending that it is increased to 70 by 2046, and that means we all have to work longer. And for employers – that means Government needs to think about its skill strategy to retrain people during their working life, and to end the default retirement age so that people can work longer, but for our employers I think it is a real challenge because coming out of recession, we are most concerned about getting young people into work. There are all sorts of misconceptions about older workers aren’t productive, but if we don’t tackle it, we have a huge hole in the labour market because of the small number of younger people coming through.”

Sibson, head of public sector:

“I think a real act of leadership required from the Government about getting people to get their head round the idea that they will work longer, that their children will work longer, re-organising their personal finances to accommodate that, re-shaping some of the financial services industry so that it provides products which meet more longer, gradual retirement. So that is a real longer term leadership challenge.”

The FT’s Money blog is a forum for the latest news and insights from the UK’s personal finance scene. Matthew Vincent, the editor of FT Money and his team of reporters will upload their views and insights on what’s happening in the industry and how this affects people’s finances.

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Lucy Warwick-Ching is the FT’s new Money Online Editor and has been a UK Companies reporter covering tobacco, pubs and leisure companies as well as the deputy editor on House and Home.

Matthew Vincent is the FT’s Personal Finance Editor and was previously the editor of Investors Chronicle, where he also devised the award-winning online video The Market Programme, and produced the BBC-FT standalone magazine ‘How to be Better Off’. He presents the weekly FT Money Show audio podcast, and previously worked on the BBC TV programmes Short Change and Pound for Pound.

Alice Ross is deputy personal finance editor of FT Money. She specialises in pensions, investments and investment trusts. Alice joined FT Money in April 2008 - prior to that she was deputy editor at Money Management magazine.

Ellen Kelleher has been a personal finance reporter in the UK for close to four years. Before arriving in London, she worked in the FT's New York bureau where she covered the insurance sector.

Steve Lodge is a personal finance reporter on FT Money specialising in savings.

Josephine Cumbo has written about all aspects of personal finance but currently specialises in insurance. She also covered company news for Prior to working at the FT she was a news reporter for the ABC.

Tanya Powley is a personal finance reporter on FT Money specialising in mortgages and the housing market. Tanya joined FT Money in November 2009 after working in Australia covering personal finance for the Australian Financial Review and its sister magazine Asset. Prior to that, Tanya wrote about mortgages for UK trade newspaper Money Marketing.

Jonathan Eley is editor of Investors Chronicle, and has been with the title for ten years. Before that he worked for newswires and trade journals in London, New York and Hong Kong.