More money needed for pensions 'for higher income'

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More money needed for pensions 'for higher income'

Fri 19th Feb 2010

The amount of money that people need to put away for their retirement may be more than they anticipate, one specialist has suggested.

Ros Altmann, pensions expert, warned that the contribution rates to pension schemes will not be enough to guarantee pension adequacy in later life.

"There are no guarantees that ten per cent, 15 per cent or even 20 per cent of salary will be 'enough' to provide adequate income in later life," she stated.

In fact, Ms Altmann predicted that 25 per cent of salary or more may have to be invested into final salary schemes in order to save a reasonable sum of money.

However, when the risk of inflation is taken into account, even large sums may be required, she said.

The comments follow the news from the Pensions Policy Institute earlier this month that many pensioners will not be able to achieve their desired standard of living through their pension contributions alone.

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