Lord Hutton reveals concerns about future retirees

Lord Hutton of Furness, who was MP for Barrow and Furness from 1992 to 2010, said the government is asking itself tough questions about the challenges facing pensions.

Speaking at the Association of British Insurers biennial conference, the former secretary of state for work and pensions said auto-enrolment was a good start but the overall level of contributions to savings schemes needed to be debated.

He said: “Right now we are heading for the rocks with the next generation of retirees. My children in their 20s and 30s are going to pay the price for living longer, which will be living poorer.

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“I don’t think we can sustain the current model we have for how we pay for health and long-term care.”

Otto Thoresen, director general of the Association of British Insurers, added that politicians needed to be more honest about how much the nation could expect from the state pension in the future.

He said: “With automatic enrolment we have entered a building that we can build and protect. The real trick is to gradually build. Overtime you build real momentum that will not disrupt economic momentum.”