Purnell warning over debt threat

James Purnell told the Institute of Public Policy Research that the proportion of 20 to 29-year-olds contributing to a private pension plan had dropped from a third to a quarter since 2000.

“At the moment young people are acting as if they expect to be able to fund a longer and longer retirement with less and less saving,” said Mr Purnell, urging people to save more.

His warning comes as the government prepares to radically change the state pension system amid fears that it will not be able to cope with future demand.

Already there are concerns that current pensioners do not have enough to live on and are getting into debt.

Now the latest study says that 3.7 million adults aged between 26 and 35 are either under saving or not saving at all.

Unless action is taken to tackle this now, there is a possibility that debt will be a real issue for people in relation to when they will be able to comfortably retire.