This is the third and most serious of my articles on this subject. In this article I look at how the middle-aged and young will survive financially in older life and what retirement, if there is such a thing will look like.

For those in their 40s or younger unless they have worked for the Government in some guise, it is very unlikely that they will have built up any pension in a final salary scheme, they will have been caught in the trap of money purchase schemes where the responsibility for the amount of pension secured is their responsibility rather than that of the employer. In most cases the contributions have been low and the results therefore inadequate. The Government have recently introduced legislation which allows you after age 55 to use your pension fund how and when you wish. This gives flexibility but it does not increase the size of the pension pot. A fund of £20,000 is still only £20,000 to be divided over your life expectancy. So for a 65 year old man that would be £20,000 divided over 21.5 years and a woman 24.2 years – this is not going to go far to pay for the shopping at Asda.

In addition, those in their 40s are now much less likely to inherit any money from their parents as this may have been used up in the costs of long term care. So, the expectation of boosting a small pension savings pot by an inheritance is slight in many cases.

Based on the facts that we are all living longer healthier lives and unable to save much what is the outlook?  I believe we must move with the times, forget the past and move on. The era of the young healthy retiree with a guaranteed retirement income is a thing of the past – in fact it was a very short and unusual phenomena. If you were part of it you were in the right place at the right time. However we need to look at this in the round those who enjoyed the final salary schemes had been brought up in the war and had not seen plenty, they left school and went straight to work, often into repetitive jobs with long working hours. The future generations have seen plenty throughout their lives and had the opportunity of travel and education well into their mid-20s before they had to engage in a career.

The future will be different – there is no longer a retirement age, I suspect we will all have a number of careers and continue to follow these for as long as we are healthy enough to do so. The secret must be that we seek to follow an occupation which we enjoy so that the longevity of work will not be a burden but rather an enjoyment. Rather than building up our “treats” for retirement, I think we will be taking sabbaticals and travels throughout our working lives We will therefore not be in need of saving up a fund for a point in the future but rather funds which can be used to top up income as and when needed Our long term financial viability will depend upon our skills and as we cannot save enough we may need to protect ourselves and our families through insurance against illness and eventual death.