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Retirement Advice

Long-term financial planning is important for your future

Today (2012/13), the full basic state pension is £107 a week for a single pensioner.

A woman who has a state pension based on her husband’s contributions, meanwhile, receives up to £64 a week.

Few would consider the state pension a passport to a comfortable retirement.

The Government estimates that seven million people are not saving enough for their retirement.

Competing financial demands, a lack of faith in the pensions industry and a perception that a pension is not something a priority tend to be the main reasons for our lack of action. But doing nothing could prove costly. The reality is that millions of people risk poverty during their retirement years and many will be forced to continue working to make ends meet.

Even the decision to delay starting a pension by a few years can make a big difference to the amount you could eventually receive, as illustrated by the Financial Services Authority’s pension calculator: As an example, a 25 year old man who starts saving £200 each month into a private pension can look forward to a weekly pension of £132 when he retires aged 65, plus a tax free lump sum of £62,000. However, putting off saving for his pension and starting five years later would reduce the pension to £105 and the lump sum to £49,000. Leaving it until he was 40 would mean an even bleaker outlook. The lump sum would be down to £29,000, while he would have to get by on just £62 a week.

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