Suffering a critical illness could treble the amount of money an individual needs to save every month to live comfortably in retirement, research suggests.
Research by Legal & General (L&G) found someone aged 30 would need to save around £290 per month in order to live comfortably in retirement.
But it says having a critical illness, such as a heart attack or stroke, can delay paying into a pension. A delay of 10 years, the life and pensions firm argues, would leave an individual needing to save £635 each month to achieve an equivalent pension.
Legal & General says the research highlights the devastating impact a critical illness could have on an individual’s savings plan.
Bonnie Burns, protection product marketing director at L&G, says: “It’s well documented that many people do not save enough for their retirement.
“However, if you are unfortunate enough to suffer a critical illness then you may never get your pension plan back on track.
“Critical illness cover should be an important consideration for anyone looking to protect their lifestyle and their ability to continue to save.
“The earlier in your career you take out a policy, the cheaper it is and you can protect your most important years in terms of savings capacity.”
Legal & General says the proceeds from a critical illness policy could be used to make regular payments into a pension plan. An average payout of £60,000 would provide two years worth of monthly pension savings, it says, and still leave over £50,000 which could be used to pay off some debt or help with the cost of medical care.
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More than half of people over the age of 55 see financial security as a top priority in retirement, yet a third allocate more time to buying a new car, research from Legal & General (L&G) has found.
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