Young umbrella company contractors need to be encouraged to save for their retirement, but in order to make the prospect appealing, the UK pensions industry need to undergo radical reform, according to George Ladds from the Fair Investment Company.
The company’s head of pension and investment research says the recent announcement to remove the requirement for people to start taking money from an annuity once they reach 75 is definitely a step forward but he hopes to see further measures put in place in the future.
Mr Ladds thinks that better education for young people, regarding their possible retirement savings options, would be advantageous. One change he says could be beneficial is the merger of ISAs with pensions. He believes this would encourage younger people to think more closely about their retirement.
Last week, Aviva published research stating that UK adults need to contribute a minimum of £10,300 per year towards their pension fund in order to support their retirement.
The CEO of Aviva said the results were startling and warned individuals that they need to start saving as early as possible in order to have enough money to support their old age.
People are living longer and the UK currently has a pensions shortfall of £318 billion, the largest of all the countries in the EU. Women, in particular, should take heed of these warnings as a large proportion of females over the age of 40 expect to rely on the pension of their husband.
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