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 378.

    I for one have no intention of lining the pockets of the pension fund providers.

    With "No Guarantee" of any kind whatsoever of getting anything out of the Fund at the time of having to purchase an Annuity.

    Charges applied irrespective of the fund gaining or loosing value. What exactly is the point.?

  • rate this

    Comment number 377.

    I paid into a pension scheme all my life and due to retire soon, my entire pension contribution disapeared when greedy bankers gambled my pension away. I now have no pension.. thanks bankers.

  • rate this

    Comment number 376.

    In my opinion the vast majority of the over 65's are either physically incapable of work, mentally incapable of work, or both. Added to this, anyone losing their job in their 50's or 60's, for whatever reason, will find obtaining any kind of "comparable" employment nigh on impossible. It seems to me that all the talk of "working longer" simply ignores or forgets this.

  • rate this

    Comment number 375.

    Issue is:
    1. The government couldn't afford the pension overhead and pushed for private pensions because the private sector are better lol
    2. Private pensions eagerly grab the money in commission and play the casinos of the finance world. If they loose big deal commission already taken. When more people draw pensions rather than put in most private schemes will follow Equitable Life and fail

  • rate this

    Comment number 374.

    So the organisation, who's members profit from selling us pensions, are telling us that we need to take out more pensions.

    And this is supposed to be a news story. Editor. Are you there?

  • rate this

    Comment number 373.

    "Sleepwalking"! They say, adding insult to injury. We don't know where we're going, but we sure as heck know we don't know.

    Just because we are not handing over whatever money we have to that lot any more does not mean we are stupid. It's like blaming little old ladies for not propping up a Ponzi scheme.

  • rate this

    Comment number 372.

    A pension fund association would tell everyone to pile into one of its members schemes, that is what they are meant to say. If I had my time again I would have bought a nice two bed flat in the centre of London instead and would have cashed in a year or two back, as it is my pension fund languishes well below expectations and I rue the day I started it. Tip - Keep full control of your own money.

  • rate this

    Comment number 371.

    I'm not putting all my eggs in one basket. Can't relay on just having a private pension. By the time i get to retire, if I ever do, I am certainly not expecting the state pension to be in existance. I've started taking advantage of the ISAs.

  • rate this

    Comment number 370.

    Not bothered to work throughout your life? Worried about your golden years? Worry no longer; Free Pension Credits will mean you will be rewarded just like a hard working person. Just don't work whatever the hell you do because then you're screwed.

  • rate this

    Comment number 369.

    What about half a million of women over 50, some of who have saved for private pensions only to be deprived of the state pension?

  • rate this

    Comment number 368.

    NAPF might look at pension returns to understand why people can't save enough. I have £20,000 in one pension fund the return from which will be £460 per year. It will take 43 years to have a chance of breaking even. Most likely I shan't last twenty years and the pension industry will have ricked me yet again.

  • rate this

    Comment number 367.

    I was compensated for being given bad pension advice. My pension pot was doing nothing so I have reinvested in a SIIP. An endowment is just about to pay out, the return is only what we put in. We also have a small flat we rent out and when we retire we might just downsize to that and sell the house. As we have a business we may work beyond 65, friends are already doing this.

  • rate this

    Comment number 366.

    An article in the Evening Standard a few months ago made the point that if there were fewer, bigger pension companies, management costs could be slashed, increasing pension pots quite dramatically. [There are over two hundred companies; twenty would still guarantee competition]. As an example, it's sheer size is a key reason why the (not tax-payer-backed) Universities scheme has been successful.

  • rate this

    Comment number 365.

    353. Jeremy Lee
    How about a tax on blame?
    That'd be the bankers then :o)
    Trouble is they'd probably pay it in Luxembourg

  • rate this

    Comment number 364.

    This is the main point on the agenda of those on the right who want rid of HRA.....
    The trouble is that it will be too late for me and I am sure many people 50+ Anyway I still think there is a trust issue with any pension fund manager and that will take years to repair!

  • rate this

    Comment number 363.

    Lindy Louise
    Off topic, but... All of them are higher rate tax payers, all of them have a sipp which co pays into, we did have an intern.. In private sector key man dependency is frowned upon. what would happen to the 100 staff if everything went through me and I fell under a bus?

  • rate this

    Comment number 362.

    Need to put £60,000 aside. Have these experts realised yet that we are suffering from austerity, losing jobs, having pensions we've paid into cut, rising costs of living on frozen wages? I will assume that they belong to the ones in safe jobs because they are such experts! it would be difficult for us to put 60 pence aside

  • rate this

    Comment number 361.

    A combination of permanently high energy prices due to peak oil and resource depletion, financial mis-management induced debt and climate change mean the next 30 years will be completely different to the last.
    We will see no more significant global economic growth from here on in.
    There will be no government aid for anyone except the very rich.
    There will be a new normal for us all.

  • rate this

    Comment number 360.


    "...As 50+ I have already lost one pension when an employer went bust..."


    I'm sorry to read that. I take it that was before it was declared that the Human Rights Act meant pension pots were the beneficiar's property, so Receivers could not touch them?

    This is the main point on the agenda of those on the right who want rid of HRA. Pensions to defray creditors again.

  • rate this

    Comment number 359.

    Sleepwalking rubbish! UK's pensioners, are the savers who finance the banks, the borrowing of UK's young spendaholics and prop up our families' finances too. Abysmal interest rates we're paid sustain UK. Unpaid interest we're robbed of pays for our state pensions - the lowest in Europe. I also work and pay 80% tax on my pension: half is clawed back by the government, the rest is taxed at 40%.


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