People are still saving too little towards their pensions to enjoy an adequate retirement, warns an industry watchdog.
Most of the population is probably facing some form of pensions gap, according to Which?. It estimates that the nation face an overall pensions deficit of £27 billion.
A pensions gap is the difference between the amount someone needs to live adequately in retirement and the income they are on course to receive.
Which? recommends that people start to calculate their own pensions gap in order to take action to prevent a retirement spent in poverty. It has even published a pensions handbook to help people work out their pension savings deficit.
People also need to consider how much state pension they will receive, which is currently set at a maximum of £84.25 a week, However, the fewer national insurance contributions made during a working lifetime, the smaller the pension allowance.
Author of the new pensions gap handbook, Jonquil Lowe, said it is "essential" to know what basic state pension you could be entitled to.
"Not knowing is like setting out on a long car journey without knowing how much petrol you have," she said.
"Armed with this information, you can then calculate how much you'll need to save for a comfortable retirement. If you do have a pension gap, the sooner you start plugging it, the better," she concluded.
Calculate your pensions gap, says watchdog
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Calculate your pensions gap, says watchdog
Wed, 17 May 2006
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1998 - 2008 UK Pensions - Planning before, at the onset and during retirement.
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