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Pension saving failures push retirement age up

09 September 2009 / by Rebecca Sargent

If the UK fails to prepare for retirement, the real retirement age could be anywhere between 74 and 86, research from Standard Life has revealed.

According to the pension and investment specialist, many could find themselves retiring with an income as low as 21 per cent of their pre-retirement earnings.

Standard Life claims that since the Government made plans to increase the state pension age to 68 in the future, a man currently aged 27 with an income of £25,800 per annum would retire with 34 per cent of his pre-retirement income if he retired at 68 with no other pension savings in place.

Commenting, Andrew Tully, senior pensions policy manager at Standard Life said: "These figures paint a stark picture of retirement reality for many people in the UK today.

"The holy grail of retirement saving is to fund an income worth two thirds of your pre-retirement income. If people rely on the state in the hope or belief that the Government will bail them out, they will either have to retire on a basic income or simply face the music and defer retirement until much later."

He adds: "Most people in the UK would like to retire at age 65 or even earlier. To achieve this goal with a decent retirement income, private saving is essential. The old adage of it pays to start saving early has never been truer."

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