Bank of England policy maker Martin Weale said the U.K. needs to save more to pay for the potentially higher costs of social and welfare services as Britain’s population grows older.
Britain has been “one of the lowest saving of the advanced economies” in the past 25 years, Weale told lawmakers at a parliamentary hearing in London today. “Essentially it’s because we’ve been a very low-saving economy that we now have worries about pensions, we have worries about all sorts of things.”
Weale said his comments weren’t related to the current U.K. economic situation, “but in the medium term the economy does have to be saving more.” He part of this should involve the public sector “thinking about what cost pressures and expenditure pressures might be in the future.”
“It seems to me quite a strong case to say that a prudent public sector would run its affairs to allow for the risk of increased pressures coming later on,” he said. “It would be likely, at least some extent, to save up in advance.”
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