State Pensions May Soon be a Thing of the Past

July 22 - The Chief Economist at Old Mutual, Rian le Roux, said this week that state pensions may soon be a thing of the past.

The Old Mutual Savings Monitor regularly examines metro savings behaviours and trends, and the findings were announced in Johannesburg recently.

According to le Roux, many governments around the world - not only in South Africa - will not be able to afford to support their elderly.

"People will have to care for themselves," he said.

This means that a much higher amount will need to be saved each month during a person's working years, and would also mean the people would need to work longer hours.

Le Roux said: "With many governments needing to focus on reducing their budget shortfalls and containing their outstanding debt levels, an early casualty of fiscal tightening has been social security cutbacks such as pension benefits and lifting the retirement age."

An interesting trend picked up by the Old Mutual Savings Monitor was the growing need by the general public for more information about savings and insurance.

"We need to take advantage of this hunger among South Africans by equipping people with better information on how to save," said the Director of Corporate Affairs at Old Mutual, Crispin Sonn.

While people are aware that they need to save, many simply don't know how to go about it in the right way.

"Our interventions should be geared towards creating a positive outlook to planning," said Sonn, adding that a clear vision that is backed by definite plans will allow South Africans to stretch their money further over the long run.