Less than two pounds per day could boost pension income, study shows

Wed, 16 Aug 2006

By saving £1.65 per day from the ages of 18 to 26, UK residents could boost their pension income by £50,000, according to research.

Adults who turned 18 in 1998 would have already saved £6,400, which would grow to £50,000 without any additional contributions by the time they were reaching retirement, the statistics from Fidelity International show.

Simon Fraser, president of institutional business at the company, stresses the importance of financial planning as early as possible to guarantee a healthy pension upon reaching retirement.

"Our research shows the potential value of every pound invested diminishes rapidly as an individual gets older. For example, one pound invested in a pension at age 25 may already have lost as much as half its potential value if the individual waits until they are 39 to contribute," he asserts.

"The message is simple - the earlier you start saving the more you will have in later life."

Recent government reforms to the pension system mean that many UK residents may need to work on until 68 if they are planning to rely on a state pension.


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