UK - The average worker is facing a pensions shortfall of more than £50,000, new research shows.
Market analyst Datamonitor said that while people are saving an average of £30,000 into both company and private pension schemes, they will need to save an extra £51,000 if they are to retire on two-thirds of their final salary.
It warned that failure to put the extra money aside would cut the average retirement income by £4000 a year, resulting in an annual income - including state entitlements - of just £13,000.
Datamonitor life and pensions analyst Oliver Guirdham said government initiatives to boost saving, such as stakeholder pensions, had failed. He added: “UK private pension holdings were hit hard by the equity bear market between 2000 and 2003. The government has exacerbated the problem by removing tax credits from pension schemes, a change estimated to reduce pension savings by £5bn per annum.”
But despite the shortfall, Britain has the largest private pensions market in Europe worth an estimated £1.2trn in 2003.
Datamonitor pointed out that people living on the Continent were far more reliant on state pension provision where they received up to 80% of their retirement income from the state.
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