Loading...
See More

UK over-50s ignorant about retirement

Dec 02 2012 09:36 Reuters
pension, retirement


Related Articles

British unemployment drops to 7.9%

Strikes won't perturb UK investors

British recession shallower than thought

Britain to unveil 'business bank'

Emergency tax on cards for UK rich

Olympics lift Britain out of recession

 

London - Britain's over-50s are in blissful ignorance of how little their pension pots will pay out and need an urgent financial health check if their retirements are to be as comfortable as they expect, an industry report said.

Workers approaching retirement in the next 15 years need to see their pension pots grow by almost 80% to meet their expectations, the National Association of Pension Funds (NAPF) said on Friday.

"Millions of people are within a decade of their state pension but have still not thought about how long their retirement might last," Joanne Segars, chief executive of the NAPF, said in a statement.

The burden of managing a pension at retirement has increasingly fallen on employees, as defined contribution (DC) pensions, rather than final-salary schemes, become the more dominant form of retirement saving.

The introduction of the government-backed auto-enrolment scheme - where people are required to opt out rather than opt into retirement saving - could lead up to 8 million additional workers being signed up for pensions, which will likely be DC pension memberships.

Yet a third of workers aged 52 to 64 remain ignorant about what their private pension income may provide in retirement, while 59% of workers have never thought about how many years of retirement they need to finance, a report by the Institute for Fiscal Studies and supported by the NAPF said.

Women in their 50s are living to an average of 88 - four years longer than expected - while men are living to 85, overshooting life expectancy by around two years, when compared with national projections of life expectancy, the report said.

Annuities, which many British retirees buy to ensure a steady income, are meanwhile becoming more expensive, meaning people will expect their savings pots to generate a higher annuity income than it actually does.

Private pension firms have also been accused of failing to disclose some of the costs they levy on customers' investment funds, leaving people unaware that their pension savings were being eroded by the charges.

The NAPF represents 1 300 pension schemes in the UK with 16 million members and assets of around £900bn.

 

Follow Fin24 on Twitter and Facebook

uk economy  |  retirement
NEXT ON FIN24X

 
 
 

Read Fin24’s Comments Policy

24.com publishes all comments posted on articles provided that they adhere to our Comments Policy. Should you wish to report a comment for editorial review, please do so by clicking the 'Report Comment' button to the right of each comment.

Comment on this story
0 comments
Add your comment
Comment 0 characters remaining
 

Company Snapshot

We're talking about:

Small Business

New forms of digital technology are changing the very ways in which entrepreneurs run their businesses.
 

Money Clinic

Money Clinic
Do you have a question about your finances? We'll get an expert opinion.
Click here...
Loading...