Pension reforms still leave shortfall, expert claims

Thu, 16 Nov 2006

The government's proposals to reform the pension system will still mean that Britons have an income shortfall, an expert has claimed.

As part of the government's changes outlined in the Pensions White Paper, the link to earnings will be restored, while the retirement age will be raised to 68.

However, Fidelity International has warned that this will have a seven per cent impact on those reliant on a pension after 2044, "leaving many people with less than they were expecting".

The company states that UK households will face 60 per cent fall in income after reaching retirement.

Simon Fraser, president of the institutional business at Fidelity International, commented: "People should not be lulled into a false sense of security by these reforms."

"On current trends, people are still facing a 50 per cent drop in income unless they start saving more now."

According to recent research from JPMorgan INVEST, 64 per cent of UK adults are facing financial challenges upon reaching retirement as they are not making adequate savings towards their pension pot.


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