About five million people could be entitled to claim pension funds that they have forgotten about, says a new report.

Many people have had (more…)

It was all the way back in December 1909 that the state pension was introduced. It was means tested and five shillings a week was given to half a million people.

The 1909 pension, in today’s money, was worth about £20. Currently, there are about 13 million people who receive about £160 a week or £8,300 a year. One in seven pensioners has no other income.

State pensions cost the government about £100 billion a year, and the Office for National Statistics estimates that this figure will double to £200bn a year in the 2030s. By the 2050s, it is predicted to double again to £400bn a year by the 2050s. One of the reasons for this growth is that people are living longer and therefore receiving more money during longer retirement years.

One strategy to lessen costs is to raise the retirement age so that people start claiming later. Another proposal is to abandon the triple lock system that guarantees an increase in the state pension each year.

The government is concerned that a £160 a week state pension is not enough for many people to live on. They have introduced auto enrolment that mandates companies to start workplace pensions schemes and enroll employees so that they have an additional income on top of the state pension.

The combination of a workplace and state pension still mean that many retirees will experience a large income drop when they retire. This is why you need retirement planning advice to maximize your retirement wealth.

Auto Enrolment advice is not regulated by the Financial Conduct Authority.

A pension is a long term investment. The fund value may fluctuate and can go down. Your eventual income may depend upon the size of the fund at retirement, future interest rates and tax legislation.

Sources used: http://www.bbc.co.uk/news/business-40826562
http://www.ukpublicspending.co.uk/current_spending

The benefit of having a good pension income is to fund an enjoyable active retirement. Talk to a pensions expert at Endeavour Financial Planning to learn how you can maximise the benefits of your pension.

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