We live in an ageing world. The baby boomers of the 1950s have created a society in which a third of the total US population will soon to be over 60.
The effects could be huge for those claiming state pensions. According to Sarah Smith, from the Institute of Fiscal Studies:
"Most public pension systems operate on a pay-as-you-go basis. This creates potential problems when the number of pensioners rises relative to the numbers of workers. To remain in balance the pension system has to raise more contributions from current workers, or pay less to pensioners."
And the Conservative Government's new Work and Pensions Secretary, Iain Duncan Smith believes that workers may have to accept quicker increases on the age they can claim a state pension:
"We have to make the argument for it sooner...The current plan to raise it to 68 ... we think could be accelerated. It seems silly to wait."
The pensionable age was predicted to rise to 67 between the years 2034-2036, with projections putting the pensionable age at 68 by 2038. By 2040, it could stand at over 70.
However news this week suggests the pensionable age will rise to 66 within 5 years, and it's expected to rise a further year, every 5 years.
So if you are aged 40 in 2010, you may have another 30 years of work ahead of you before you can claim your state pension.
And we're living longer; on average, a man who survives to 65 will live for an additional 21 years, while women are expected to live for another 24.
By 2050, these numbers are projected to increase further: with men aged 65 living another 25 years, and women expected to live an additional 28 years.
So you'd better have a big enough pension pot to tide you over.
Outside of the state pension, private pension funds remain dependent on steady stock market returns to pay policyholders. So, when share prices fall - as they have done for the past two years - policy holders inevitably suffer.
Look at BP, whose share price has halved since April and who announced they would not be paying shareholder dividends.
Not only is BP significantly important to the FTSE 100 share index's stability, its situation will also massively affect shareholders' pension funds.
BP has historically paid £1 in every £7 paid out in dividends by British Companies. BP's decision to suspend dividend payments means $2.6bn is lost to shareholders and pension holders alike.
The days of relying on stocks and shares to provide for your future may well be over...
But there are still opportunities to take control of your financial dealings - through an alternative investment in collectibles.
A consumer base of some 200m collectors and counting ensures that the demand - and therefore value - of collectibles does not disappear overnight - meaning there are few of the risks found in traditional financial investments.
It is also a market endorsed by some of the most famous investors in the world like Warren Buffett and billionaire Conservative Party chairman Lord Ashcroft.
 Marilyn Monroe's Bathrobe |
More people are turning to unique collectible investments because of their consistent history of astonishing value returns.
According to data taken from the GB30 Rarities index, which tracks the value of the 30 rarest British made stamps, during the period of 1970 to 2010 the value of the entire index has increase by 6,403%.
More importantly, the index has not dropped in value in any five year period for 40 years. This makes rare stamps a safer investment than the fluctuating property and stock markets.
Add to this the opportunity to invest in unique pieces of history; collectible pieces that are likely to continue to hold, and increase in value.
In November 2009, a Las Vegas auction witnessed the sale of Marilyn Monroe's bathrobe. The piece, worn by Monroe when she died, sold for $120,000. A decade earlier it had sold for just $6,000
In other words, the bathrobe gave a 35% per annum return - compounded!
If you're considering investing in collectibles, then you may want to act quickly.
The collectibles market is seeing a surge of interest from the BRIC countries of Brazil, Russia, India and China.
Increasing economic prosperity is seeing more BRIC investors turning to collectibles.
In India a recent 50% rise in the number of dollar millionaires has had a knock-on effect on unique collectibles. China too, has seen a rise in collectibles like stamps - the People's Republic now represents 18m of the total market of 48m collectors.
So more collectors mean more demand for collectibles - which adds up to greater competition at auction and great prices for collectibles. And these collectors are all investing in a market that continues to see World Record prices.
The sale of a double Victoria Cross medal - one of only three ever awarded - set a World Record price of nearly £1.5m for a piece of its kind in November 2009.
 The $5.7 million Patek Philippe Watch |
More recently, a rare Patek Philippe watch sold at Christie's in May 2010, for a World Record price of $5.7m.
And if you needed further convincing, experts at Paul Fraser Collectibles have also pointed to the consistent historical returns of at least 10% per annum.
If we look at the PFC40 autograph index, which tracks the value of the 40 most sought-after autographs in the world, we can see an average compound increase of 15.86% over the last 10 years.
Some rarities have excelled, signatures like Neil Armstrong's, the first man on the Moon, have shown a 900% increase in that 10 year period.
Elsewhere, according to research by NADA guides which tracks the value of classic cars, automobiles priced at around £50,000 to 66,000 ($75,000 to $100,000) saw an appreciation of 45% in four years. That's a rise of 11.25% per annum.
This means that, if high-end collectibles continue to appreciate in price by 10% per annum, then a £61,000 investment paid over 30 years could appreciate to over £380,000. Even if no further monies are paid into the collection, it could continue to grow at £38,000 per annum, again compounded.
In the 1960s, it was estimated that around 4 workers paying taxes supported the payment of each individual's state pension. Today, the ratio stands at 3 workers to every retiree. By 2040, this figure could even reach 2 employees to every pensioner. Beyond that, there may not even be a state pension.
Were you to choose to benefit from the significant values offered by collectibles, then you could be free to retire at a time of your choosing with a unique pension plan.
Almost a quarter of Brits are expected to be aged over 65 in 20 years time. With this in mind, maybe now's the time for you to consider alternative pension investments.
