Tag Archives: pension advice

Checking & Savings, Financial, Financial Information, Financial Services, Investment, IRA, Money, Personal Finance, Retirement

Prudential Reports Britons Favour Spending On Holidays Over Saving For Retirement

Prudential has revealed that nearly three million working age adults will prioritise going on holiday over continuing to save for their retirement as their finances are squeezed.

The survey asked non-retired adults in the UK to outline their spending priorities when faced with a reduction in monthly expenditure as incomes are frozen for many and living costs increase.

Prudential’s research also found that an estimated 2.5 million Britons (or 10 per cent of those who have started saving for retirement would, if forced to make the choice, continue to spend money on nights out with friends and trips to the cinema ahead of maintaining payments into their pensions.

In a similar vein, more than 2 million would choose clothes shopping or going to the hairdresser ahead of payments into their retirement savings.

The figures highlight how saving for retirement is less of a priority for many in the current financial climate. Having previously revealed that more than 1 in 3 non-retired UK adults have no private or company pension, Prudential’s research has also found that almost a quarter wait until they are 31 years old before paying anything into a pension.

Vince Smith Hughes, Head of Business Development at Prudential, said: “Given the choice, many of us would opt for the immediate benefits of a holiday or a night out with our friends over saving for retirement. However, I’m sure we would all like to be able to continue topping up our tans occasionally or going out for meals after we have retired. So it is really important to strike a balance and keep building up a pension that can support the lifestyle we want to have in later life.

“As people tighten their belts it is important to think about the long-term impact of financial decisions and spending patterns. Those looking to maximise their retirement income should start saving as much as possible as early as possible in their working lives. Even small contributions can make a significant difference to a pension if invested early. And a consultation with a professional financial adviser will help you make the right long-term and short-term financial decisions.”

Via EPR Network
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Prudential Reveals More Than A Third Put Their Pension Savings On Hold

Prudential has revealed new research which shows more than a third (35 per cent) of British adults who are yet to retire have stopped paying into their pension pots.

The results of the nationwide study show that one in three (33 per cent) of those who have put pension payments on hold have done so because they are out of work, while over a quarter (27 per cent) say that they can no longer afford the contributions.

More than two-fifths (43 per cent) of those who have stopped paying into their pensions do not plan to start again, despite the long-term impact it will have on their retirement income.

Prudential’s calculations show that irregular contributions could reduce the values of savers’ pensions by thousands of pounds. In fact, a saver who misses a year of gross contributions of £2,400 could see their final pension fund reduced by £7,000*.

Vince Smith-Hughes, head of business development at Prudential, said: “Tightening your belt when times are hard is sometimes necessary, and putting pension contributions on hold might seem an easy way to save money; however, neglecting pensions today means throwing money away tomorrow, as savers will miss out on perks, such as tax relief and employer contributions.

“Abandoning your pension pot really should be a last resort when times are tough. By getting into the routine of saving into a pension as early as possible, savers will be able to ensure the comfortable retirement that they deserve.”

Via EPR Network
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Prudential Reveals One In Three UK Workers Don’t Have A Pension

Prudential has revealed that more than one in three (35 per cent) workers in the UK admit that they don’t have a pension, meaning that they will have to rely on the State Pension and any savings in retirement.

The survey of 1,600 working adults also found that those who do contribute to a company or private pension pay in an average of 6.2 per cent of their annual incomes. Women are far less likely to save for their retirement with 41 per cent saying they do not have a pension, compared with 29 per cent of men.

To make matters worse for those who do not save into a pension fund, as well as facing a sharp drop in income at retirement, they are also missing out on significant tax relief during their working lives. Office of National Statistics figures suggest that the average worker in the UK earns nearly £1 million over the course of their working lives. An individual making the average pension contribution of 6.2 per cent of this income could receive a total of more than £15,000 in pension tax relief.

While the average tax relief on pension contributions is £334 per year for a person paying the basic rate of tax, higher rate taxpayers stand to lose substantially more by not paying into a pension scheme.

Vince Smith-Hughes, head of business development at Prudential, said: “Failing to save into a pension means not only having to rely solely on the State Pension in retirement, but also missing out on the ‘free money boosts’ which come with pensions, such as tax relief and employer contributions.

“Making regular pension contributions is a vital part of securing a comfortable retirement. Although saving for retirement may not be a priority for young people, the more money which is stashed away from an early age, the more likely that significant rewards will be reaped later in life.

“When coupled with the benefits of any additional employer contributions or gains through fund performance, a pension is the best way of saving for retirement, for many people. In order to maximise pension benefits, to understand the impact of tax relief, and ultimately to secure a decent retirement income, it’s important to seek professional financial advice.”

Via EPR Network
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Prudential Reveals Two In Five Planning To Retire In 2011

Prudential has announced that two in five people are planning their retirement for 2011, even though many have received no advice or have relied solely on non-professional advice.

Two in every five people planning to retire in 2011 will do so having relied on non-professional advice as their main financial information source in the run up to retirement. Prudential’s Class of 2011 research studied the financial plans of this year’s retirees and found that 43 per cent have received no professional advice or relied on the internet or the media for most of their pension advice.

However, more than a quarter (28 per cent) of people intending to retire this year received most of their financial information from an IFA – a figure that remains unchanged since last year. But the study shows there is an increasing trend for people to conduct their own research before seeking pre-retirement financial advice. Half of those who said that an IFA was their main source of retirement income advice had also carried out research online and via the media – an increase from one in three in 2010.

Prudential also found that nearly one in ten (9 per cent) are relying on employers for pre-retirement financial advice advice while another 16 per cent are putting their faith in a mix of friends and family, pension providers and banks.

Russell Warwick, distribution strategy director at Prudential, said: “These results show that there is a genuine advice gap for people in the run-up to retirement. The majority of people due to retire this year will miss out on professional advice and could potentially be making mistakes when planning for their retirement income.

“It is imperative for people looking to secure their retirement income to start saving as much as they can as early as they can and in the years immediately prior to retirement I would also recommend a consultation with a professional adviser on an annual basis.

“Our research has also found that the numbers seeking financial advice prior to retirement in 2011 have not changed since last year. This highlights the work that we as an industry will need to undertake to increase consumer understanding of the value that advisers can add in the run up to the implementation of the Retail Distribution Review next year.”

Via EPR Network
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Prudential Reveals Number Of Poverty Line Pensioners On The Rise

Prudential has revealed that more than a third (35 per cent) of people planning to retire in the UK this year will do so with incomes below the poverty line.

To meet its minimum income standard the Joseph Rowntree Foundation, the charity that funds a large, UK-wide research and development programme, estimates that a single person in the UK needs at least £14,400 a year, yet 35 per cent of those retiring in 2011 will have a retirement income below this level, up from 32 per cent in 2010.

Prudential’s Class of 2011 study surveyed people intending to retire this year and also revealed that nearly one in five (19 per cent) will retire on an annual income of less than £10,000 a year.

Women planning to retire this year are even more likely to have incomes below the poverty line. 40 per cent of women retiring in 2011 will have a pension income of less than £14,400 compared with 30 per cent of men. Prudential’s research also found that a quarter (26 per cent) of women compared with 12 per cent of men will retire this year with less than £10,000 a year to live on.

Vince Smith-Hughes, Head of Business Development at Prudential said: “Although our research shows that increasing numbers of those planning to retire will face tough financial decisions, there are many options available to boost retirement income.

“People approaching retirement should seek professional financial advice as a prerequisite to maximising their income. We would recommend that you review your finances with an adviser annually in the years immediately before your planned retirement.

“Following the simple advice to start saving as much as you can as early as you can should help to secure the retirement income you want and need. Making voluntary National Insurance contributions should also help to boost retirement income for people who have had breaks in National Insurance payment during their working lives.”

Via EPR Network
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