Young people will have to work and save non-stop from age 22 until they hit 77 to get a pension of the kind earlier generations enjoyed, a new study shows.

Dailymail.co.uk

Start saving later or take a break for any reason, and you would have to work until even later in your 70s or into your early 80s to get a decent pension.
This could signal the ‘death of retirement’ for many people, who might end up working well beyond the traditional age to stop even if they try to do all the right things, according to pension firm Royal London, which compiled the report.

It looked at how long an average earner who saved at the 8 per cent contribution level – the minimum auto-enrolment requirement from spring 2019 – and built up a full state pension would have to work to get the same pension as their parents.

The study assumed that someone was in the most common defined contribution scheme, rather than a more generous final salary scheme, and would buy an annuity at retirement.

It also assumed someone was on the national average wage of £27,600 a year, and their target was a ‘gold standard’ pension of two thirds of pre-retirement income, with inflation protection and provision for a spouse after death.

Royal London found that someone would have to work without a break until age 77 to achieve this goal, and even if they aimed for the ‘silver standard’ of half their pre-retirement income they would need to work until they were just over age 71.

Although a start date of 22 for pension saving will become the norm for future generations under auto-enrolment, people are still likely to have gaps in contributions due to unemployment, sickness or family responsibilities.

Former Pensions Minister Steve Webb, now policy director at Royal London, said: ‘Getting millions more people saving through automatic enrolment is a huge step forward, but many face a cruel disappointment if they think that current minimum contribution levels will deliver them the sort of retirement they are looking for.

‘Without significant increases in contributions, we could be witnessing the death of retirement. This report shows that today’s workers are unlikely to be able to secure the quality of pension provision enjoyed by many in previous generations without either working well beyond pension age or contributing substantially more.’

Yahoo finance
New FCA data shows just 13pc of savers are choosing to turn their pot into a guaranteed income via an annuity
Nearly nine in ten savers accessing their retirement pots under the pension freedoms are using new flexible arrangements, new data has revealed.
Financial Conduct Authority (FCA) shows just 13pc of savers are now buying annuities to turn their fund into an income in retirement.
• Pension freedoms: 2.2m face charges to access money
• £17m a day withdrawn under new pension freedoms
A total of 178,990 pensions were accessed during the three-month period, and 68pc of these, amounting to 120,969 pensions, were fully encashed.
The remaining 32pc of pensions that were accessed were taken to provide an income.
Most (88pc) of the pensions where the money was fully taken out were worth less than £30,000, the FCA said. Another worrying trend is for the majority of consumers continue not to shop around for the best deals, despite the clear benefits of doing so.
Concerns were raised about the number of people not taking financial advice, or using the Government’s Pension Wise service.

A report from the Organisation for Economic Co-operation and Development (OECD) identifies Britain’s state pension as one of the world’s least generous, paying out on average of 38 per cent of what a recipient earned. Across 34 countries, only Mexico and Chile are more miserly. Even the Government’s “triple lock” policy, which raises the state pension by whichever is highest of inflation, earnings growth or 2.5 per cent, fails to find favour with the OECD. However, countries around the world are struggling to maintain the value of state pensions, and the chances that any of them will be able to sustain current levels with people living longer are slim.
telegraph.co.uk

Most people will be better off gradually withdrawing cash from their pension pots rather than buying an annuity to fund retirement – unless they expect to live well beyond 85, according to a new study.

Annuity rates are at an historic low and the forecast is for this to continue, according to Cass. If you die young the annuity dies with you and so you risk wasting your money by annuitising too early.

With careful management, pension pots of £100,000-plus should not run dry until at least the age of 80 or even older – and longer if you opt for flexible rather than fixed withdrawals, says the Cass Business School research.

It says that annuities often prove poor value and that savers should be able to make pension pots last, especially if they seek professional advice.

Dailymail.co.uk

Money makeover: Max Loosli, 60, needs a precision plan to spend his entire pension in his lifetime – without running out of cash first. New “pension freedoms” introduced this year mean that, for the first time, savers such as the Loosli’s are now able to access their pensions as cash, without paying punitive rates of tax.

Telegraph.co.uk

Many feared savers would blow their retirement savings when new freedom rules were introduced, with then pensions minister Steve Webb declaring he was relaxed about people blowing it on Lamborghinis should they so wish.
However, the ABI says retirees are taking a ‘common sense approach.’

Dailymail.co.uk

We’re very pleased to announce that Assured Retirement, the UK’s newest retirement income provider has chosen AMS Retirement for their first portal integration. Our Cash Retirement Account now appears on the Fixed Term section of AMS Retirement.

The Cash Retirement Account, which is a low risk fixed term secured drawdown plan, is designed for those who wish to access their pension savings in a cost effective and flexible manner using the new post-April pension flexibility. It is aimed at low risk investors and only invests in cash deposits with Banks, Building Societies and with National Savings and Investments, so there is no exposure to any investment risk.

The Investment is protected at all times as all deposit takers on the panel are fully authorised to do business in UK by the Financial Conduct Authority and are 100% covered by the Financial Services Compensation Scheme. The mixture of cash deposit accounts are selected so that the interest earned is maximised and mature in time to provide the required benefits. The amounts invested, including interest earned, do not exceed £75,000 with any single bank or building society, thus offering 100% protection at all time.

For more information about Assured Retirement’s product offering please go to their website, www.assuredretirement.co.uk

Assured Retirement present at Westminster and City Retirement Income Options Conference
Assured Retirement have been invited to speak at the Westminster and City 19th Annual Conference on Annuities and Drawdown, a two day event on 25th and 26th November 2015, London Marriott, Canary Wharf, london, E14 4ED

UK.finance.yahoo
Its research showed on average pensioners earn £394 a week compared to the £385 median among the working age population

Telegraph.co.uk
Sales of annuities to pensioners have fallen by almost 90pc since the Chancellor gave retirees the freedom to choose how to spend or invest their pension pots.