Making the state pension simpler could spur millions of younger people to save more towards their retirement, new research shows.
A Populus survey for the National Association of Pension Funds (NAPF) found that half (47 per cent) of those aged between 18 and 34 - more than six million people - would save more for their old age if they knew how much state pension they would get.Surprisingly, younger people felt much more strongly than older age groups about a better state pension. Joanne Segars, Chief Executive of the NAPF, said:“They’re keen to take more control of their retirement, but they need a clearer state pension foundation on which they can build their own nest egg.“If they could see the state offer might not be enough, they’d be more inclined to get their own savings sorted, partly to avoid working past an increasing retirement age.“The current system is a dog’s breakfast and makes it impossible for people to plan their future. Even pensions experts struggle to work out what they’ll get, so what hope does Joe Public have?”The Government is currently thinking of simplifying the system and introducing a more generous flat-rate pension guaranteeing the equivalent of £140 a week in today’s money.The current UK state pension is one of the lowest and most complicated in Europe. The system of pension credits and a state second pension makes it very difficult to estimate what an individual’s state pension will be.The Populus survey showed almost two thirds (63 per cent) of those aged 18 to 24 said not knowing what they would get from the state makes it difficult to plan for their old age, rising to 70 per cent for 25 to 34 year olds.Joanne Segars concluded:“It can be a big ask to get someone in their 20s thinking 40 years ahead. The proposed reform of the system would be a huge improvement, but changes must stay in place over the long-term.“We have to get younger people switched on to their financial future. Starting a pension early can make a massive difference to the final size of a retirement pot. A clearer state pension will bring more young people into the habit of saving.”Manchester debt firm is liquidated owing creditors over £2.2m
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