igh levels of youth unemployment will lead to widespread poverty in old age as young people struggle to save for retirement, according to the Organisation for Economic Co-operation and Development.
A new breed of private pension schemes, which are built on monthly contributions, will be undermined if younger workers stay unemployed for long periods, said the Paris-based thinktank.
As it warned that babies born today will live until 100 years of age on average and retire at 70, the OECD said the weakness of the British state-funded system meant workers in the UK were among the most vulnerable.
Stefano Scarpetta, an employment specialist at the OECD, said: “It is of great concern that many countries are building contributory pension systems when they have large numbers of unemployed young people who cannot contribute and will have very low retirement incomes.”
His comments came as the OECD said that on most measures, the UK ranks in the bottom half of the pensions league table. Public expenditure on pensioner benefits as a proportion of GDP is lower than the average. Pensioner living standards are also below the OECD average. Italy has the highest spending on pensions as a proportion of GDP whereas the Netherlands, which has a large private and workplace pensions top up, has the highest standard of living for retirees.
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