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 238.

    Don't forget that, without the tax raid by "Gordon the moron", pension funds would have been at least £200 billion better off by now.......

  • rate this

    Comment number 237.

    228. JimK "Labour government .. had the best pensions in the world...Gordon Brown ... ..."soft touch" regulation.""

    Right, and the Tories (under Thatcher in 1987) did not start light touch regulation I suppose?

    Blame the whole Establishment class not Labour or Tory!

    If you do not kick the right group you pick the wrong one when you vote!

    Vote for 'None of the Above' (certainly NOT You Kip)!

  • rate this

    Comment number 236.

    Pensions are a "rock and a hard place decision". Economic policy deastroys savings, governments can raid savings at will and means testing makes relatively small pensions a waste of time. On the other hand welfare benefits have to be cut to reduce the deficit.

    There appear to be no good choices in this situation.

  • rate this

    Comment number 235.

    I wonder how many people like me are 'investing' their 'pensions' in university education for their children? The next generation are already financially burdened before they start.
    My only regret is not buying property (abroad) rather than contributing to a 'pension' scheme where everyone seems to benefit except me!

  • rate this

    Comment number 234.

    With reports out today about the increase in jobless rates, those over 50 who are jobless are going to snicker at this. There is no trust or guarantee that they will have a decent job to be ABLE to pay into a pension. It would be better to save it somewhere else for example.Frankly if you are over 50, spend it. When you are ready to retire (70?) you may not have the health to do so!

  • rate this

    Comment number 233.


    The time has to come where the State - on behalf of taxpayers - tells people that there is no reason for the taxpayer to fund them in their retirement. .If this means these people starve it is their own silly fault.

    Dear Scrooge,
    it is my sincerest hope that you suffer ruin, homelessness and starvation. Perhaps you might learn wisdom, compassion and common sense.

  • rate this

    Comment number 232.

    #212 Muumipeikko
    "Paying more is always someone elses job, never yours..."

    I suggest you read my posts properly. I have no idea why you've inferred this.

  • rate this

    Comment number 231.

    Lindy Louise
    But what about the planner earning 40k or the IT PM earning 90k should our man in Starbuck earning 10k really be paying for his final sallary pension? Why can't they pay more towards it? They earn more than the national average and if in public sector would have to.
    You basically want to limit the public sector exposure to a few hundred people.

  • rate this

    Comment number 230.

    Pensions ONLY work IF the economy is rationally managed.

    Pension do not work = economic management has been deficient & insane for over 20 years. The Establishment peddled a lie.

    It is all to do with ALWAYS maintaining a prudential price for money (more than inflation). The idiots at the BoE & Treasury have failed to do this - just so that they could have personal retirement jobs at banks!

  • rate this

    Comment number 229.

    218. alexicon
    Private sector pay is driven down by unscrupulous employers.
    Err NO it called globalisation, Yes I can strike for better pay, theoretically, but I may as well deliver my job to Heathrow as it will be on the 1st flight to Beijing. (either to my employers Beijing office or a competitors Beijing office)

  • rate this

    Comment number 228.

    Before the last Labour government we had the best pensions in the world. Look where Gordon Brown has left this country with his tax raids and "soft touch" regulation.

  • rate this

    Comment number 227.


    "In every survey it's the same result, the average public sector salary is higher have the private."

    Most of the switch from private earning more than public to the reverse in the last 20 years is because the lowest paid public sector jobs - hospital cleaners & caterers, bin men etc - have been outsourced to companies. Like-for-like pay is still better in the private sector.

  • rate this

    Comment number 226.

    The Pension system is a scam and does not HELP people to be able to live a sustainable life when they end up NEEDING it when retired.
    How about regulating how and where each pension's money goes so people KNOW how their money is ACTUALLY being used on.
    People don't trust system's we have in the UK because they're all corrupt it seems. It's just "tough luck" for the people who keep the world going!

  • rate this

    Comment number 225.

    When you drive through the leafy suburbs of Surrey (say, Guildford or Godalming) do you ever wonder who can afford these lovely houses?

    Well, it's the pension fund managers who have been helping themselves to 1% of your pension pot, year in, year out, with no regard to how well or (more often) badly their investments have been.

    Do yourself a favour. Buy a SIPP and manage your own pension.

  • rate this

    Comment number 224.

    We planned ahead > Determined to be self sufficient in old age and never need financial help from children. I paid into a pension scheme with voluntary additional contributions - forfeited holidays to help 3 children with the house deposits - supported 2 of them when redundant -helped clothe grandchildren.My reward ? Loss of all age related allowances and benefits and fall into top tax bracket

  • rate this

    Comment number 223.

    Or may be the pension companies dont get the fact

    1) You cant rent for the rest of your life
    2) House prices are 5 - 10 times average incomes. UK Gov wants to look at regional pay - Have they ever bothered to look at average salaries in Southwest like dorset compare to house prices . The difference ratio is comparable to outer London !!!!

    People are worrying about today !

  • rate this

    Comment number 222.

    Those with personal pensions need to take more active control of them. Like most people, I put my money into the provider's in-house funds, which turned out to be 'dogs'. After 15 years of regular payments, my fund was value was roughly equivalent to the money I had put in.
    By switching into better funds from the same provider, my pot has increased by 10% in a year. Do the research and switch now!

  • rate this

    Comment number 221.

    Planning might be feasible if the the goal posts stopped moving. I was to retire at 60 and had saved for that. Now its 66. I work on a fixed term contract which finishes when I'm 58. I could have coped with 2 years unemployment, using my savings. If I can't find work, by 66 (8 yrs), I'll have no savings left!! Poverty stricken old age - I should have spend while I could - holidays cars etc!

  • rate this

    Comment number 220.

    Before those of us in the private sector get too agitated about public sector pensions, ask yourself if government will actually be able to pay them in even 5 years time, let alone 10 years.

    They are unfunded to the tune of about £1000 billion, which seems to me to mean that they cannot be paid for much longer anyway.

  • rate this

    Comment number 219.

    67. its good up north
    ... If the fund is returning 1.0% then change the fund it is straight forward or is this to much as of British public?
    I would except the exit fees are massive -- (IIRC about 15%)


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