State pensions trumped by private alternatives

Mon, 20 Jul 2009

Those with a pension would increase their incomes if they moved from a state to a private retirement scheme, a new study has suggested.

The Lloyds TSB Wealth Management Pensioner Incomes report showed that private pensions have seen a growth of 131 per cent over the past 22 years, compared to 43 per cent in the state schemes.

Looking at data from 1987 onwards, the bank found that the average pension in the UK now gets 60 per cent of its funds from private sources rather than from the government.

Nitesh Patel, economist at Lloyds TSB Wealth Management, said: "There has been a significant increase in the average pensioner household's income over the past 20 years. Much of this rise has been driven by the growing importance of privately-sourced income to provide for retirement ."

Insurance company LV= recently said that some over-50s think they will have to work past the age of 65 because their pensions will not be able to support their outgoings.
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