Following a series of pensions workshops, AXA Winterthur found that 79% of advisers believe that people not saving enough for their retirement. A further 21% of IFAs believe that their clients do not have a firm understanding of the risks or possible rewards of investment.
Considering that people may spend 20-30 years in retirement, funding that period of time can be costly. The current state pension, depending on personal circumstance, is £95.25 a week for a single person and £152.30 a week for a couple. It is clear that for many people, funding their own pension pot is the only way they will have enough money to live on. Even so, a pension fund of £100,000 only produces an annual income of just over £5,000 over a 20 year period.
Mike Morrison, head of pensions development, AXA Winterthur Wealth Management, says: "There is a definite need to encourage a saving culture within the UK, but it is difficult when the goalposts keep moving. So, post A-Day, with the introduction of the annual allowance, I am sure there were many people who planned decent sized pension contributions say in the last ten years before retirement. These plans will have been affected by the HMRC rules on anti-forestalling which now in most circumstance only allow a contribution of just £20,000 to get full tax relief even though their income will be taxed at 40%.
"People need to be able to look ahead and plan effectively with certainty. I don't think a lot of people realise just how long their retirement can last. We are all living longer, and most of us would like to at least maintain our current lifestyle. The only way to do that is to start saving and keep saving."
The pensions workshops are the latest seminars to be delivered by the AXA Winterthur Professional Edge consultants.
