UK - One in five people could get back less than the value of their contributions to personal accounts as proposed by the government, a report by the Pensions Policy Institute revealed.
Published a day after the new pensions bill was unveiled, the PPI report considered the suitability of personal accounts and highlighted the groups that would run the highest risk of losing out under the scheme.
Personal accounts are due to be introduced in 2012.
According to the report, single people renting in retirement with no additional savings and single people in the forties and fifties fell into the highest risk bracket.
This risk could be reduced by being part of a couple or by having savings apart from personal accounts.
Niki Cleal, PPI director said: “Even if people are in the high risk category it may still be advisable for them to save to smooth consumption over their lifetime."
She added the research showed people will need very clear information to help them to make informed decisions about whether they should stay in or opt out of Personal Accounts.
The new from the study however was not all grim. It showed young people contributing to personal accounts throughout their working lives will be likely to receive good effective rates of return.
Single people in their twenties with full working histories and single men in their forties with large additional savings will most likely come out on top when it comes to personal accounts.
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