Legal & General

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Millions of people are putting their dreams of a comfortable retirement at risk because they are not contributing enough to their pensions. Research commissioned by the Association of British Insurers reveals that people should save an average of £ 800 extra a year to avoid an impoverished retirement. The research, carried out by Oliver, Wyman & Company, an independent consultant, warns that 45 to 60-year-olds are most at risk. They should be saving an extra £ 700 a year each on average to secure a comfortable retirement. But the message is also failing to get through to younger savers. The report says that 25 to 35-year-olds need to save £ 833 more on average, although they will have longer to make up any shortfall.
The dismal performance of the stock market has added to savers' woes. The average pension fund has lost nearly 15% of its value over the past six months. A fund worth £ 100 000 six months ago would now be worth £ 85 553, according to Standard & Poor's Micro pal. For a 65-year-old man, that is the difference between an annual pension income of £8 912 and £7 624 at the current best ...
... annuity rate. Although markets rallied last week, returns are expected to stay lower in future. As more firms shift from final-salary to money-purchase plans, whose returns depend on the fluctuation of the stock market, it is essential to maximize savings.
The combination of falling annuity rates and lower returns means that a 30-year-old who set up a pension scheme in 1991, paying in 10% of his or her earnings and retiring on a salary of £ 40 000 at 65, could expect an annual annuity income of £ 22 000, according to William M Mercer, a consultancy firm. A person in similar circumstances who joins in 2001 could expect only £ 9 600.
But many people will have to survive on less in their retirement unless they raise their contributions radically or work into their seventies. The average pension fund at retirement is only £ 23 000, which would buy an annual income of a mere £ 2 047, or £ 39. 36 a week. But the monthly savings you need to build a decent pension fund do not have to be onerous, as long as you start early. A fund of £ 250 000 at retirement would buy a 65-year-old man an annual income of £ 23 200. A woman would receive £ 20 700. To reach this goal, Legal & General, the insurance and Pensions Company, calculates you would need to save £ 126 a month at the age of 25 or £ 175. 50 at 30. The older you get, the harder it is to meet the target. If you do not set up a pension by the age of 35, you would have to save £ 248 a month. By 40, the figure is £ 360, and by 45, £ 540.

Although in fact it is chiefly an act of imagination, it has serious consequences in life, since it brings on deep sorrow and bad luck. Those people offend many others, nobody loves them, and no one treats them with more than the most common politeness and respect, and scarcely that. This frequently puts them in bad temper and draws them into arguments. If they aim at obtaining some advantage in rank or fortune, nobody wishes them success. If they bring on themselves public disagreement, no one will defend or excuse them, and many will join to criticize their misconduct. These people should change this bad habit and condescend to be pleased with what is pleasing, without worrying needlessly about themselves and others. If they do not, it will be good for others to avoid any contact with them. Happy is not meaning rich, but the belief that in your mind.