Twilight years & Pension woes?

Wednesday, 9th June 2010 14:57 - by Resident IFA

The Annuity provider Partnership has released research (From ABI, Oxford Economics, and the Office for National Statistics figures) into the retirement prognosis for our current batch of over-50’s. Unsurprisingly, it is depressing reading. Partnership’s Philip Brown says “Millions of people are on a collision course with an impoverished retirement because they aren't saving enough.” Apparently, nearly 8 out of 10 retirees face subsisting on an annual income of only £8,000 in their twilight years. Of those retiring in the last 5 years, 77% had a Pension fund of less than £30,000 with which to buy their retirement income. This will attract an Annuity (income) of around the £2,000 per annum mark. Shocking stuff. The quoted £8,000 figure (above) comes from then adding the approximate £6,000 per annum State Pension to this. As we all know, the State Pension is already under pressure with the amount of the population over 65...and will only become more under pressure as time passes. When at retirement, people then miss out again by not shopping around for the very best and most suitable income available to them via the ‘Open Market Option’ (OMO) facility. Only 40% utilise their OMO, and thousands more miss out by not seeking an enhanced annuity which is available as a result of them suffering ill-health. What a miserable picture! Dare I say it; this situation might only worsen, what with the demise of expensive employer-funded occupational Pension schemes, workers now having to fend for themselves. So, if you see yourself entering the above penury, but have the time and/or means to do something about...please do! Even foregoing that High Street coffee or having one round of Golf less each month could help add to your Pension contributions now. As always, whether seeking the best Annuity rate at retirement or looking to build a Pension for retirement; please seek out your local Independent Financial Advisers (IFA). I believe that you can find them via www.unbiased.co.uk Until next time...