Cost of delaying pension investments revealed

Fri, 08 Aug 2008

Delaying pension contributions can cost people thousands of pounds, new research shows.

According to a study by Legal and General, in order to achieve a pension of £20,000 a year from 60, a 25 year old needs to save £205 a month.

However, if pension contributions are delayed until the age of 35 then the payment more than doubles to £423.

This means that the total cost of the pension will have risen by £40,000 over their working life, Legal and General found.

Adrian Boulding, the firm's wealth policy director, said: "When you are 25 or 30, retirement seems like a long time away but if people begin to save even a relatively modest amount they can look forward to a much more comfortable retirement."

Starting a pension early will reduce the likelihood of people having to save vast amounts later in life, he added.

Earlier this week, Legal and General launched a new pension plan, the Portfolio Plus Pension, which offers savers a choice of 300 insured funds .
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