Small change in pension to prevent working longer
Employees who make small sacrifices now could boost their retirement income and reduce the need to work for longer in the future, according to one pension provider.
Following A-Day proposals, the state pension age will rise to 67, for someone who is 35 now, and to 68 for someone who has just turned 20 – meaning people will have to wait that much longer to rely on the state pension for income in retirement.
However, AEGON UK claims just £2.40 a day - the cost of a latte - could be enough to allow a 35-year-old earning £23,000 a year to reach a target pension of half their salary at the age of 65 rather than 67.
For a 20-year-old, just £1.68 extra a day now would be enough to allow them to retire three years before their state pension age of 68.
"With all the talk of having to wait longer for state pension benefits it's easy to forget there are other options which would allow people to bridge the gap," said Steven Cameron, head of business regulation.
"A surprisingly small change in savings behaviour today could make a big difference to future retirement choices. People have a choice in how they manage their personal savings gap and for many, saving more will be an attractive alternative to working longer."
TD Waterhouse's self-invested personal pension plan (Sipp) is another way workers can get their finances ready for the future, for more information click on our free brochures page.
Related Stories
This news is available in 