Pensions are 'most efficient savings'

A pension is the most efficient way to save for retirement, people shopping around for the best savings interest rates have been advised.

Tony Attubato, head of dispute resolution at the Pensions Advisory Service, said that pensions have a reputation for being incredibly complex but in reality they are just savings plans to provide for retirement.

He said the complication arises due to the tax incentives given by the government to encourage retirement savings, as well as the restrictions on when and how the money is withdrawn.

"Pension plans are saving arrangements solely designed to provide for you when you retire. But they are not the only way to save and provide for your retirement. If you have the resources, you may want to consider alternatives," Mr Attubato said.

However, he added that for most ordinary people, a good pension plan is likely to be the most efficient way to save for retirement.

A study by Aviva has found that 60 per cent of older people would recommend that youths cut down on spending in order to save for retirement.

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2011-10-10 13:15:41 © Moneyextra.com