Sarah Pennells, the editor for “Savvy Women”, is encouraging her readers to start thinking about their future pension fund as early as possible. The earlier one begins, the smaller the individual payments need be, whereas savers who do nothing until they reach middle age will have to cut out more of their income.
If your employer is willing to contribute to your pension fund then by all means, says Pennells, take them up on it - “it’s like turning down a pay rise if you don’t sign up.”
According to research published by Alliance Trust Savings in May, 34 per cent of British parents paid £3,600 - the maximum gross amount - into their child’s pension fund during the last tax year. If parents pay the same amount each year from their child’s birth to when they turn 18, by the time they are of retirement age they will have a pension of just under £2 million.
Pennells’ argument is further supported by the latest annual pension report from Scottish Widows, which showed that only 51 per cent of British workers - 25 per cent discounting those with a final salary pension - are saving enough money for retirement.
