Number of inadequate pensions 'may not be as high as thought'

Tuesday, October 11, 2005

Fears over the state of many people's pensions may have been unnecessary according to new information.

A recent report by the Institute for Fiscal Studies (IFS) has revealed that as little as eight per cent of people could have insufficient income when they reach State Pension Age (SPA).

Gemma Tetlow, one of the authors of the report, commented on the findings: "Our analysis shows that amongst older workers, at least, the fraction retiring with inadequate resources may not be as high as the first (interim) report of the Pensions Commission estimated."

That report, in October 2004, suggested that many pensioners would struggle with inadequacy if the system progressed in the same manner, unless they had "large non-pension assets" or were looking at retiring much later.

The IFS says that some people will still be disappointed with what they receive when they reach the SPA, saying that some people are overestimating the amount of money they will receive from private pension funds.

A Prudential survey at the end of September had found that only 20 per cent were saving enough for retirement.