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 338.


    Wrong. Two thirds of the contributions are picked up by the general tax payer and because the pensions are fixed benefit, if there is a shortfall, the tax payer gets stuck for the bill again. Ultimately all of the risk in taken by the general public.

  • rate this

    Comment number 337.



    The problem is a vast amount of our welfare bill goes on buying off people who are in work. "

    Absolutely - far more Housing Benefit is paid to employed people than unemployed. The fact the such subsidies have to exist underlines the futility of suggesting that those who need additional support just to live for the now can somehow save.

  • rate this

    Comment number 336.

    Employers need to boycott these managed DC "schemes" and start to make personal pension arrangements with employees. There'd be negotiable advantages for both.

    The Government won't act. Their friends in the City like the way people's savings are railroaded to them as stake money by existing law.

  • rate this

    Comment number 335.

    If people did attempt to save enough for their pensions, either the economy would implode because of lack of spending or the government's budget deficit would explode as it attempted to plug the spending gap.

    The inevitable logic of all of this is that people will have to work for longer.

  • rate this

    Comment number 334.

    People are not sleep walking, they can see what a terrible deal private pensions are. Why does nobody mention economies of scale? So many people on here mention the huge fees taken from their funds. Much of that money is being taken to pay experts in lots of little companies. If you had one state scheme that wouldn't happen. You'd only need one set of exerts! No more hefty fees. Too much choice?

  • rate this

    Comment number 333.

    No-one can save any more for a pension as they are too busy paying over the top prices for everything they use and buy as well as supporting children/grandchildren. Unemployment is sky high with no decent jobs available to anyone so this report is ridiculous in the expectation of saving £60,000. State pensions need to be raised.

  • rate this

    Comment number 332.

    Re top rated 14. Note to all. 10% gets you an accrual rate of about 1/250ths as opposed to 1/60ths in public sector schemes.
    Also mention that people in their 50s whose final salary schems have closed are completely stuffed. They cannot risk putting money into long term growth funds - they don't HAVE a long term - and don't have enough years left to build up a pot. Many thanks, Gordon et al.

  • rate this

    Comment number 331.

    I now have a SIPP, at 48. The reasoning was simple my pension was being eroded by management fees and I had no control of whether it made any money or even went down in value, athough I still pay a management fee I am free to invest my pension pot as I see fit. The advantages of a SIPP far outway any other form of pension in a volatile labour market as it can't become fragmented if you change jobs

  • rate this

    Comment number 330.

    Those who have invested in private pension schemes have suffered from high charges, poor performance and now annuity rates that have fallen through the floor. "Planning" is misnomer.

  • rate this

    Comment number 329.

    Well done on writing something different rather than copy+paste old comments. To answer your question, thats all managed by legal today. To many lawyers suing you for having a full-stop in wrong place...

    Try to keep posts on topic, this isn't really the place to ask for job for your alternate alias although I admire your get up and go.

  • rate this

    Comment number 328.

    #305 Langstroth
    Yes I do "get it". Read my other posts.
    Are you suggesting that millions of low-paid private-sector workers should languish on low pay for years and years without recourse to decent pension provision just because they're in the private sector?

  • rate this

    Comment number 327.

    The only reason for a private pension is if it is all paid by the employer. That way you get back a massive chunk in national insurance contributions. Forget the employee contribution. Keep the money and do want you want with it.
    I suggest all pension companies should be required to offer a tracker fund - one that tracks the remuneration package of the chief executives.

  • rate this

    Comment number 326.

    The public sector pensions are payed for by all tax payers. In most cases the amount paid out as a pension bears little relation to what you actually paid in.

    No - public sector workers are paid and contribute to their own pensions. The employer also contributes as part of the conditions of employment. The benefits are paid according to the contributions made.

  • rate this

    Comment number 325.


    The problem is a vast amount of our welfare bill goes on buying off people who are in work. Employment or lack of isn't the issue when it comes to state dependence. I could work and theoritically still be entitled to housing benefit, child benefit, help with council tax, disability allowance, free insulation and when I'm older, winter fuel allowance, free bus pass and a free tv license.

  • rate this

    Comment number 324.


    So I don't know what I'm talking about because I've never worked in the public sector ?

    My mother worked for the civil service for 30 years and by her own admission had it "very cushy"....referring to most of her fellow employees as "layabouts".

    My father was a self employed painter who worked every hour god sent.


  • rate this

    Comment number 323.

    The country is run by big business cartels; financial services, insurance, banking you get the drift. "

    Indeed. If anyone doubts that, have a look at this :

    It may be about the US, but is it different here? No any more. We used to have checks and controls - now all gone.

  • rate this

    Comment number 322.

    314. Liz
    .. advisers use jargon to deliberately confuse.... I was struggling to understand the product as they described it. How is the average person supposed to understand?
    Agreed. After struggling with it myself, I concluded it is not a 'product' per se. They take your money, invest it in 'safe' shares- which I could do- then pay the minimum back while hoping you will die prematurely

  • rate this

    Comment number 321.

    I have forwarded this story onto both of my parents, they keep acting as if they are both going to be retired at sixty and dead ten years after that, despite the fact that my maternal grandmother has just turned ninety. And in my honest opinion neither of them has really saved up enough and in my Mum's case, completely ignored the need for a pension altogether despite being eligible for the LGPS!

  • rate this

    Comment number 320.

    Sure, I'd like to have a good pension. Wouldn't we all?
    But, in the absence of a gold-plated civil service scheme, such a pension is unaffordable now as it was ten years ago, twenty years ago, and more.

  • rate this

    Comment number 319.

    The country is run by big business cartels; financial services, insurance, banking you get the drift.

    Pensions are just another money maker for the city and the financial services cartel.

    Workers (99%) getting screwed over to help the 1%.

    Welcome to Britain in 2012.


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