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11 Aug 2014

Pensions Minister: Act Now To Protect Your Financial Future

Almost 12 million UK workers aren´t saving enough money to secure themselves adequate funds for their retirement, the Department for Work and Pensions announced in a press release earlier this week. However, the government website states that with a few simple changes, savers should be able to improve their future financial prospects.

With an ageing population, the research reveals the scale of saving problems across the UK. Although 11.9 million people are said to be saving too little, many are heading along the right path when it comes to saving for their retirement. According to findings from the DWP, almost half have managed to save 80% of their retirement income target, while only 8% are less than halfway towards reaching it.

Pensions Minister Steve Webb stated that these findings show that “by saving just a little more, a huge number of working people could make their future retirement so much more comfortable.”

It was also found that State Pension reforms, a reinvigoration of workplace pension schemes and efforts to find work for older jobseekers have significantly reduced the number of people who are under-saving. Similarly, increasing contributions paid into workplace pensions could have a further positive impact on improving rates of saving.

It was recognised that those on higher incomes could greatly benefit from higher contribution rates; but there is a danger that this could prove detrimental for lower earners, who may opt out of workplace pensions completely.

The study highlighted three key factors that led to low retirement income prospects. These include: not having a full work history; not contributing to private pensions while in work and not contributing enough to private pensions to ensure a large enough pension pot.

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