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18 Sep 2013

DWR: High Earners Need To Save More For Decent Retirement Income

Pensions have been a hot topic in the UK for months now. Yet despite the amount of attention given to the matter recently, many people are still unaware that they have to do more in order to maximise their retirement income.

Recent analysis of pension reforms introduced by the government reveals that, while the changes may boost pension income for the lowest earners, those who earn more than £35,400 will actually see their pensions savings drop if they fail to act now.

According to the Daily Telegraph, approximately six million high earners are not doing their best to prepare for their retirement. High earners are more likely to see their savings drop, partly due to investing in self-managed pensions.

Recent research from the Department for Work and Pensions found that if they want to have the same standard of living in retirement as they do in their working live, high earners will have to dramatically increase their pension pot contributions. For instance, a person earning £40,800 per year will have to save £2,460 more every year than they do now to ensure they have a decent income, the Telegraph reported.

Pension minister Steve Webb commented that while it is natural for people to want to have the same standard of living while working and in retirement, they should realise that this requires saving more significant amounts of money, otherwise their income would drop dramatically.

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