Pensioners urged to prepare for retirement amid deficits

25 July 2008 / by Rachael Stiles
As analysts announce that soaring inflation has contributed to a £38billion in pension deficits, pensioners are being urged to pay into pensions and savings accounts to fund their retirement.

Inflation and movements in the stock market have caused a £38billion loss to pension funds, with the Government's failure to curb inflation accounting for FTSE 100 companies losing as much as £25billion in pensions payments.

In light of the predicted shortfalls and rising number of 'returnment' cases whereby people return to work after retiring, Zurich is urging financial advisers to encourage their clients to prepare adequately for the future by offering timely pension advice.

As times are hard for consumers who are being hit with higher food and fuel bills, especially for vulnerable groups such as pensioners, this is more important than ever.

"As life expectancy continues to rise and the amount of time people spend in retirement increases, we are urging advisers to review their clients' retirement planning." Dave Lowe, pensions management director at Zurich UK Life commented. "With more and more people expecting to be active in retirement, the need for financial advice has never been greater."

Research from Zurich has revealed that more than a third of those over the state retirement age have returned to work, 36 per cent of which said they had to do so in order to make ends meet.

The insurer's research also shows that a fifth of financial advisors have not taken this opportunity to review the retirement planning measures that their clients have in place as they return to work after retirement.

"As more and more people are re-evaluating how they spend their retirement, advisers have an important role to play in helping people plan for their retirement." Mr Lowe concluded. "We believe that advisers have a responsibility to make people aware of the different ways of funding their retirement, such as income drawdown, as well as the taking the traditional annuity option.

"We need financial advisers to review their clients' pension arrangements in light of changing lifestyles as more people are active in retirement. By helping people take the right steps in their younger years, we believe people will be better placed to make the most of their accumulated wealth in retirement."

© Fair Investment Company Ltd