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Worrying decline in pension provision
7 April 2008 12:00
The amounts that Britons are investing in pensions are dropping rapidly, according to a new survey, yet they paradoxically still expect to draw on sizeable incomes in retirement.
Non-retired adults are contributing £144.57 a month on average to private and occupational pensions, Prudential's poll indicated, which is worryingly 48 per cent lower than the typical monthly investment 12 months ago.
Moreover, the proportion of working Britons not putting money into either type of scheme has risen by a percentage point to 55 per cent, with more than two in five men guilty of this error and almost two thirds of all women.
Yet the average worker expects an annual income of £22,504 in retirement, when really a 20-year-old man would have to save £286 a month until he reached 65 to attain this goal and a 20-year-old woman would have to set aside £413 a month until the age of 60.
Prudential's Gary Shaughnessey warned that continuing to save as early as possible is crucial if people want to maintain their current lifestyles when they retire, adding that current economic uncertainty and falling house prices make pensions even more vital.
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