People no longer save for retirement, claims expert

There has been a culture of neglect towards pensions as fewer people build up savings in accounts with the best savings interest rates or dedicated pension schemes.

Tom McPhail, head of pensions research at Hargreaves Lansdown, said that individuals, employers and the government could all be accused of failing to make adequate saving provisions for pensions.

A report by the Workplace Retirement Income Commission said that there is an urgent need to improve the UK's pensions system, as 14 million currently do not save for a pension.

When workplace pension enrolment becomes automatic in 2012, it is thought that ten million people will adopt the scheme, making it easier for them to avoid destitution in old age.

"The automatic enrolment of workers into pensions over the next few years, together with the steps that are being taken to simplify the pension system, mean that in five years' time, the picture [will] look considerably better than it does today," said Mr McPhail. 

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2011-08-04 12:58:28 © Moneyextra.com