Debtors warned to start saving for a pension

Mon, 22 May 2006

Consumers may need a "wake up call" to start saving for their pensions earlier, according to experts.

Long-term saving plans, such as a personal pension plan, may be put in jeopardy by taking too much credit, states the Association of Independent Financial Advisors. Fay Goddard, deputy director general of the association, has cited the "easy" credit culture as a factor which inhibits adequate saving for a pension plan.

"It doesn't help when credit is so easy to get," said Ms Goddard.

"You can manage debt but it is still growing."

If still in debt when reaching retirement, individuals might find that payments which were manageable become a burden, particularly if they do not have a company or stakeholder pension.

Many will be affected by the recent government shake-up of the pension system and may find that if reliant on state pensions they will have difficulty servicing existing debt.

However easy credit is not the only problem faced when living on an old age pension, a recent Scottish Widows survey showed that one in six pensioners are still paying off their mortgage.

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