Analysis carried out for the JPMorgan Fleming Pension Map of Britain 2002 reveals that by adding an ...
Analysis carried out for the JPMorgan Fleming Pension Map of Britain 2002 reveals that by adding an extra one-off payment of £1,000 into a pension, the number of people expecting a pension income equal to 50% or more of their final salary would be dramatically increased.
Based on current pension provision, the number of working men in the UK that can expect a pension income equal to 50% or more of their final salary is just 29%, the research found.
However, if each working male made a further £1,000 gross contribution into a pension plan, including tax relief, ' effectively £780 before tax relief for lower-rate taxpayers ' those that could expect 50% or more of final salary as pension income would jump to 46%.
Women would also see an improvement, with the percentage of working women that could hope to receive a pension equal to 50% or more of pre-retirement salary rising from 30% to 46%.
The research shows younger people stand to benefit most from upping their contribution. At current levels of provision, the number of working men in the UK aged 20-29 that can expect a pension income of 50% or more of pre-retirement salary is just 27%.
If each man in the 20-29 age bracket added a further £1,000 gross per year to their pension arrangement, the number that could expect 50% or more of their final salary as a pension income would almost double to 53%.
This is also true for young women. By contributing an extra £1,000 lump sum to their pension, the percentage of women currently aged 20-29 that could expect to receive a pension income equal to 50% or more of final salary jumps from 33% to 50%.
This effect drops off the older the investor. Above the 20-29 age group, less than half in each of the age groups 30-39, 40-49, 50-59 and 60+ can expect to receive a pension income equal to 50% or more of their final salary.
The majority of financial advisers (85%) believe the number of self-invested personal pension (SIPP) providers will continue to fall in the coming year, according to Dentons Pension Management research.
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