Pension savings should start early despite new rules

Pension savings should start early despite new rules

30 July 2010 / by Lois Avery

Pension savings need to be a priority despite yesterday's news that the default retirement age will be scrapped, that’s the message from Friends Provident.

The Government announced yesterday that they are making good their promise to abolish the age 65 retirement rule next October, but experts are warning that Britain is not well equipped to deal with people working and living longer.

Friends Provident has also warned that getting rid of the default retirement age could mean people put off saving for retirement and may rely on being able to work longer in order to top up their pension pots.

But in order for the system to work, savers in the UK need reminding to start planning ahead for their financial future or face working into their seventies.

They argue that although abolishing the default retirement age will make it easier for people in the UK to work longer, there will be a proportion of the older population who may not be fit enough.

Martin Palmer, head of pensions marketing at Friends Provident, said: "Axing the default retirement age clearly provides greater individual choice and freedom to work as long people want to but people need to be aware of the reality of working longer. As a nation we should start seeing retirement as a process in our lives and not a one-off event.

"We need to provide the right savings options to enable employers to provide a suitable savings culture that will encourage people to take control and start investing in their future today. Corporate platforms will offer employees the chance to select tax efficient savings that match their life goals by encouraging a greater percentage of the working population to start making provision for later on in life."

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