Housing Wealth Will Be Crucial In Plugging The Pensions Gap

The UK is sleepwalking into a retirement income crisis that cannot be averted by pensions alone. The shift towards defined contribution schemes means millions of workers will run out of money in retirement. Those contributing eight per cent into defined contribution schemes throughout their working life will end up with just one fifth of the pension of an identical worker in a defined benefit scheme. While this would lead to an average worker accumulating a pot of £380,000 by the time they reach retirement, this only buys an annuity of £12,000 a year at current rates. What’s more alarming is that most defined contribution savers have not saved enough to even achieve this amount. Read more on the City AM website.