Aegon has warned that people waiting to start saving for retirement until the introduction of personal accounts in six years time, will see their income in later life reduced by at least a third. The Pensions White Paper gave details of the scheme, which will see employees automatically enrolled and contributing 4% of their salary to the scheme. They believe that some people could become worse off after the introduction of personal accounts, as employers with good pensions schemes might change them and pay fewer contributions in.
Government research shows only 1% of employers would do this, but other published research has found that closer to 50% of employers would reduce their contributions to employees pension schemes in line with personal accounts.
Our view
There is not a lot we can add to this. For every five years you delay contributing to a pension, you will half your pension at retirement. Need a pension? Book your free callback review.