Fidelity International is warning people who plan to wait for the introduction of personal accounts in 2012 could miss out on a significant amount of retirement savings.
According to Fidelity, someone aged 30 who begins saving today, contributing the full £3,600 amount allowed annually, could build a pot worth £612,000 by the age of 65.
If that same person were to wait until personal accounts are introduced in 2012, then they would save just £496,000 at 65, £116,000 less.
Latest research from Fidelity shows that one third of under 35s think they can defer saving until later in life, and nearly one in five aged 35 to 54 agree.
Simon Fraser, president of institutional business at Fidelity International, is concerned about this trend and says: “There’s a big danger associated with the Government’s laudable introduction of personal accounts – the possibility that people may leave it until 2012 to do anything.
"As our research shows this could be a costly mistake for anyone hoping to enjoy a comfortable retirement.”
According to Fidelity, falling behind with retirement savings causes exponential increases in contributions needed to make up the gap.
If increased contributions are not made to meet the shortfall, then eventually the contributions required become unsustainable and final retirement savings will drop below the desired level.
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