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Consumers with low pension contributions will struggle when older
29/04/2008 18:03:00
Consumers with low pension contributions will struggle financially in later life as the money they set aside now will have less value in the future due to inflation, one financial expert has claimed.
According to Virgin Money's pensioner profile analysis, the average 30 year-old has 420 wage packets left before retirement.
If he or she contributes £100 each month, they can expect just over the equivalent of £3,000 a year in annual income in today's money once retirement is reached.
Scott Mowbray of Virgin Money, said that thinking about a pension in terms of how many pay packets there are left before retirement is a good way to concentrate the mind.
"Saving for retirement is not a sexy subject and thinking ahead thirty years is very often low on a list of priorities," he said.
However, a "ten per cent increase in your yearly contributions will dramatically affect the quality of life you can expect when you retire", even though it may seem a long way off at the minute, he Mr Mowbray continued.
Meanwhile, according to the Mirror fuel bills for the elderly have now topped £1,000 per year.
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