Saving for retirement.

Most of us feel that retirement is so far away we have plenty of time to save for it. However, the more enlightened among us realise that the sooner we start paying into a pension the higher our income in retirement is likely to be. Therefore, the sooner we start the better the standard of living we will enjoy in our twilight years. The state pension is rarely enough to top up on savings and afford a decent standard of living. Increasingly state pensions will fail to bridge the gap between expenses and available resources. Current pensioners are receiving their funds not from the taxes they paid over their lifetimes, but from the taxes of current taxpayers. With an increasingly ageing population the number of taxpayers ratioed against the number of pensioners is becoming, or has become, untenable. Things can simply not continue as they are. The government has tried to incentivise the population to take out private pensions. They have increased flexibility, decreased charges, and increased regulation. There has never been a better time to take out a pension. So what are you waiting for? Do you want a small income or big to retire with?

The average pension is less than minimum wage.

A recent survey has highlighted the plight facing Britain's retiring population. The average worker will retire on less than minimum wage. The findings of the third annual Fidelity Retirement Index has shown that the average person will have an income drop of more than 50%, on reaching retirement age. Their income will be 53% below the median UK weekly wage of £457 at just £215 per week (lower than minimum wage, based on a 40 hour week at £5.52 per hour). Things could get even worse, as defined contribution pensions replace defined benefit final-salary schemes. Those with final salary schemes are to be linked to length of service and retirees can expect on average about two thirds of their final salary after 40 years service. Defined contribution retirees, where the pension is based upon their contribution, can expect to retire on average on around 38% of final salary. The report, built on financial modelling 1000 people, revealed that worryingly, Britain is falling behind both Germany and USA for retirement income. In Germany, workers retire on average on 56% of their income, and in USA. this figure is 58%..