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| CURRENT SECTION :: Money | UK's most visited IT Contractor Site - 250k unique visitors March 2008 |
 
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Start saving today – or regret it tomorrow. Contractors should be thinking about their financial future – and one of the best ways of securing a better future is to put money aside, in pension plan contributions, in savings, or preferably both. But if contractors are anything like the rest of the population, they’re not doing enough. A set of surveys out in October of 2003 highlighted the woeful state of British pension contributions. The MarketPlace, in research done for Bradford & Bingley, reported that only one in 100 people between the ages of 25 and 34 regards pension planning as a financial priority. This is perhaps not surprising; what is more revealing is that up to 13m adults, across all age groups, have not made any financial plans for retirement, with one in four of those aged 45 to 55. Such a laid-back attitude leads to soaring costs as clients grow older. Nick Breton, a spokesman for The MarketPlace, said that someone hoping to retire at 65 on an income equivalent to £20k in today’s money would have to pay £139 a month in pension contributions if he had started at age 25; £577 a month at age 45; and a whopping £1,597 a month at age 55. The survey also shows that one third of today’s pensioners say that they began saving for retirement too late. Elsewhere, research from recruitment firm Pertemps surveyed 500 full-time and part-time workers. It found that two out of five did not contribute to any pension scheme, while 14% had no long-term savings. Most of those polled were leaving long-term financial planning until later in life: Pertemps identified these as MACS, or Middle-Aged Complacent Savers. Don’t depend on the State. Will the State look after you? According to ‘The State of the Nation’s Saving’ survey by the Association of British Insurers (ABI), only one in fifty people thought that the basic State pension would pay enough to live comfortably on in retirement. Despite this, the survey revealed that eight million Britons are failing to save for their retirement and could face eventual poverty. A further two million people are saving, but too little to make a real difference. In total, more than a third of UK workers are not saving enough for their retirement.This might be due to ignorance. Two-thirds of those questioned said they had bad or very bad understanding of pensions. Most did not have a clue as to how much they needed to save towards a comfortable retirement. And a further third of people said that they were mainly investing in property for their retirement. As Joanne Segars of the ABI put it, “Our survey paints a compelling picture of people who want to take responsibility for their retirement but are worried or uncertain about how to do so”. Paul Tebbutt, Chief Executive of leading national independent financial advisory company Millfield Partnership Limited, comments: “I believe that these surveys show once again that the term ‘pension’ is a turn-off. Nobody wants to think of himself as a pensioner! Yet what is a pension, other than a wrapper allowing people to invest in equities and receive a tax break from the government for doing so? It’s also a way to receive a tax-free cash sum – and that’s surely something that everybody wants!” What happened to saving for a rainy day? Insight Investment polled people on their savings habits. This survey revealed that more than half of Britons are saving no money at all. Just 45% of those polled said that they saved money in the three months to September, down from 47% in the previous three months.Even those who do save are putting less aside than they did before. The average amount being saved fell to £241, or just £80 a month – down from £262 in the previous three months.Insight Investment’s MD David Norman commented, “A live-for-today mentality has led many people to ignore the need to save altogether. This attitude is leading to an increasing and worrying debt/savings imbalance. Savings should not be seen as a pipe dream: it should be seen as a regular habit”. For more information about how Millfield Partnership Limited can help with pensions planning, savings and investments, and many other financial needs, click here.. Millfield Partnership Limited was awarded Money Marketing’s IFA of the Year Award 2003.Millfield Partnership Limited is authorised and regulated by the Financial Services Authority. Previous Page
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