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Friends Provident reveals potential £10,000 pensions gap

21 April 2005
New research from Friends Provident has revealed that more than half a million people in the UK could be facing a pensions shortfall of at least £10,000 a year.

The average British person expects to need between £20,000 and £24,000 a year to maintain the lifestyle they would like to lead in retirement - but they are only realistically anticipating an income of only £10,000 to £12,000.

If that person spends 25 years in retirement, that shortfall could grow to a total of £250,000 over that period.

Yet Friends Provident's Pensions Realisation Research, a major study into retirement lifestyle conducted by YouGov, has found that more than a quarter (27 per cent) of British workers are not contributing anything to their pensions at all.

"The bad news is that Britain is sleepwalking towards hard times in retirement. These findings are a wake-up call to warn people to start putting enough money into a pension, sooner rather than later, in order to enjoy a more financially secure retirement," said Jeremy Ward, head of pensions marketing for Friends Provident.

"It's not rocket science - it's common sense, especially because you get tax relief on all the money you put aside."

More than half those who are not saving (53 per cent) said they did not have the money to do so - but Friends Provident points out that just cutting back a little on spending now could see your life vastly improved when retirement comes.

Click here to start planning for your retirement.

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