Pension planning 'inadequate' among over 50s


NAPF's Mel Duffield: "People should be realistic about the pension they will need"

Many over 50s are "sleepwalking into their old age", a pensions group says, as research suggests people are over-optimistic about retirement income.

The National Association of Pension Funds (NAPF) said people must conduct a healthcheck of their workplace pension.

This view comes after an Institute for Fiscal Studies report said that people may live for longer than they expected.

The report suggested that people's pension provisions were inadequate compared with their expectations.

The report, which was partially funded by the NAPF, claimed that women were underestimating their life expectancy by four years, and men by two years.

It found that one in four people aged between 50 and 64 needed to save an additional £60,000 before retirement to gain the income that they might expect.

Nearly 60% said they had not thought about the number of years of retirement that they might need to finance.


About 32% of those aged 52 to 64 could not offer a rough estimate of what their private pension retirement income might be.

"Fortunately, people are going to live longer than they think, but they are not planning for it, so they might find their savings and pension do not stretch far enough," said Joanne Segars, chief executive of the NAPF.

"Millions of people are within a decade of their state pension but have still not thought about how long their retirement might last. It is worrying that so many over 50s are sleepwalking into their old age and are expecting to be better off than they will be."

She urged people to shop around for an annuity - a pension income for the rest of their life - which is bought with their pension pot.

"It does not help that the annuity market has become so tough," she added.

There has been a consistent fall in annuity rates since 2007.

Tom McPhail, head of pensions research at investment firm Hargreaves Lansdown, said: "Generally investors underestimate their life expectancy in retirement and, in order to receive the income they would like, investors need substantially more money in their pensions."

This meant better communication was needed to manage pension investors' expectations. They also needed to be encouraged to take better decisions about retirement saving earlier in their working lives, he added.


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  • rate this

    Comment number 138.

    I have had a work pension now for 28 years and this year been told it is being changed from a final salary to another system which will pay considerably less. I have however got a work pension so that will give me a little to get by on so I will no longer be entitled to the various benifits provided by the state. Why bother, sped your money don't put anything away

  • rate this

    Comment number 137.

    Well even if you are diligent and save for your retirement, there is no proof that you will be better off, because the government can change the rules to your saving plans be they public or private, where in the end you have little or nothing left to retire on.

  • rate this

    Comment number 136.

    So much self pity. My brother has a nice house, a nice car, an expensive tv, holidays abroad and pays 50 quid a month into a pension. How far is that going to go? How many people out there are doing the same? Jam today, jam tomorrow? Guess again.

  • rate this

    Comment number 135.

    unfortunately many people see private pensions other than final salary schemes, together with banking,insurance and financial institutionsl as a RIP OFF.

  • rate this

    Comment number 134.

    We had a first class pensions industry in this country until Gordon Brown, single handely wrecked it.

  • rate this

    Comment number 133.


    I've never worked in the public sector mate and never plan to.

    Too much pride.

  • rate this

    Comment number 132.

    I put money into several private pension schemes over the years only to see abysmal growth (if any) due to poor management and excessive fees.

    Rather than then buy an annuity from these rogues I transferred the pension pots into a drawdown SIPP and my strategy is to take out the maximum the rules allow before some other shark (bank or government) robs me of the little that is left.

  • rate this

    Comment number 131.

    Add up the monthly cost of your phones, TVs, smoking and drinking and fast food. Then try justifying not putting money away for your old age. These posts are full of "it's someone else's fault" [Gordon Brown, Tories, Banks,] but no-one seems to accept that the current generations have a much easier life than their predecessors, nor do they accept that they perhaps owe something back to the nation.

  • rate this

    Comment number 130.

    " Public-sector .. achieved better pension provision by fighting for it. Private-sector workers need to do the same."

    But they can't!
    Public sector pensions are paid (at the expense of the tax payer), regardless of how well investment of their contributions performed.
    Private sector have to rely on the returns of the investments, & that's been well & truly scuppered by the greedy bankers et al.

  • rate this

    Comment number 129.

    If Pensioners want to have a prosperous retirement, they shouldn't be taxed while their young to fund yesterday's workers.

    You should be allowed to look after yourself first and foremost. It's your money, you worked hard, you earned it, you have a right to keep it to take care of yourself.

    If you can afford to be charitable, great, you'd better able to too if you weren't taxed all your life :)

  • rate this

    Comment number 128.

    111.Lindy Louise
    'Public-sector employees organised, unionised and fought for fairer pay and conditions; they achieved better pension provision by fighting for it. Private-sector workers need to do the same'

    Its easy to give money away in negotiations when it's not yours to start with.

  • rate this

    Comment number 127.

    Your right but your also very blinkered, their is mass underemployment in this age group and every bill has gone up, people are struggling to pay basic bills. Worrying about poverty tomorrow is pointless when you live with it today. Like me your lucky, you can aford to put money aside, or maybe your a civil servent preaching about saving while I'm paying your final salary pens.

  • rate this

    Comment number 126.

    I've saved for a pension for 25 years. The money in the pots is equal to money I've put in almost exactly. Compound interest is a fantasy. Even with tax relief, money purchase pensions are really bad value.

  • rate this

    Comment number 125.

    111.Lindy Louise

    Your post is need to remember who pays for you...truthfully, when it comes to pensions...the biggest problem is funding your over inflated pensions.

    Did you not see the post about the teachers equates to a private annuity fund of over half a million pounds.

    Paid for by the tax payer...plain wrong.

  • rate this

    Comment number 124.

    91. sportingmac
    But we have paid - it is called National Insurance.

    Not enough though, more years contribution required.

  • rate this

    Comment number 123.

    You will work until you cease to be lucrative for your employer.

    You will then submit yourself to the medics.

    You will be prevented from dying quickly and cleanly.

    Your savings and assets will be taken from you to pay for nursing care until the money runs out.

    You will then get a hospital acquired infection.

    Your children will inherit nothing, so become wage slaves in turn.


  • rate this

    Comment number 122.


    It just makes it worse that he stuck his fat fingers into the pot on top of all that you mentioned.

  • rate this

    Comment number 121.

    The over 50's fall into the generation that saw pension funds plundered by company owners, a government who's mantra was " reduce tax - invest in your pension" and private pensionmis-selling by the cart load.

    Little wonder then why the over 50's are 'sleepwalking'

  • rate this

    Comment number 120.

    we're all robbed blind by a financial services business which sees "my money" as "their commission", the conflict of interest is obvious. Traders destabilize shares and executive pay schemes encourage massaging of a business for their benefit (what happened to the banks!). For the average person it doesn't add up, the Govt will encourage us to save, then tax it when you die! no point I'm afraid.

  • rate this

    Comment number 119.

    Yet again, those that have saved and have carefully lived within their means will be expected, (looking at these posts ARE BEING EXPECTED), to pay the credit card bills of those that do not.
    People have come to expect, and that they MUST have, whatever the situation. And always it is someone else's problem, someone else MUST bail them out. Enough. Work hard, (there is no entitlement) or be poor.


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