Graduates get pensions warning

Graduates starting work this year have been warned that if they delay saving for their retirement until they are 30 their final pension could be nearly halved.

Calculations from high street bank HSBC show that a 21-year-old contributing £75 a month to a stakeholder pension fund could purchase a pension of £12,700 a year.

This figure would steadily decrease the longer an employee delays paying into a fund, with those waiting till they are 30 buying a pension of £6,470 a year, 49 per cent less than the figure for those who started saving from 21.

Ian Martin, head of pensions and retirement income at HSBC, said: "There has been a great deal of talk about pensions recently and it appears that older workers are starting to hear the message about the importance of planning for their retirement.

"But for graduate starting work for the first time, retirement seems a long way off and their pension just isn't a priority."

He added that with the state pension predicted to fall from its current level of £84.25 a week, young people cannot afford to delay making contributions to their own pension scheme.

Last year, the Royal Bank of Scotland reported that 49 per cent of graduates had not started contributing to a pension fund up to three years after graduating.

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