Think Money

Think Money

November 02, 2011 12:09 ET

Pensions: Don't Put Your Retirement at Risk

LONDON, UNITED KINGDOM--(Marketwire - Nov. 2, 2011) - Planning for tomorrow is something people need to think about today, financial solutions company Think Money has stressed. The company was responding to ONS figures showing that the number of people paying into an occupational pension scheme has fallen to a level not seen since the mid-1950s.

In 1967, 12.2 million people were paying into an occupational pension scheme - but by last year, this figure had dropped to 8.3 million. This 32% decline is all the more worrying when you consider that the population grew from around 55 million to 62 million in that time.

A spokesperson for Think Money commented on the findings: "Saving for the future is crucial if people want to enjoy a decent standard of living once they've stopped working.

"This drop-off in occupational pension schemes has been going on for decades, but recent years have seen it accelerate - 2010's figure of 8.3 million represents a massive drop from the 9.0 million we saw as recently as 2008.

"Clearly, rising unemployment and falling levels of disposable income are forcing households across the country to rein in their spending, but we would advise people to think very carefully before deciding how they'll do that."

It's easy to make 'snap' decisions when money's tight, but sitting down with a calculator and a budget planner can help people make informed choices when they're looking to address a shortfall in their finances.

It can show them how much they need to cut back and the best ways of doing that. Equally important, it can also help them identify areas where they shouldn't consider cutting back.

During tough times like these, things like insurance and pension contributions might look like obvious candidates for cutting back since there's no immediate impact, but the consequences could be extremely far-reaching. An effective budget can help people better understand their financial situation so they can find better ways of reducing their spending.

"Having said that," the Think Money spokesperson continued, "budgeting isn't always enough. Many households will find that there just isn't enough coming in, and that no amount of cutting back will help them keep on top of their credit cards and other debts at the same time as paying the mortgage, putting food on the table, paying the utility bills and so on.

"In cases like this, they may feel it's virtually impossible just to 'stay afloat' - let alone put their debts behind them and give their retirement planning the necessary attention."

However, many borrowers will find they can renegotiate the terms of their debt repayments, perhaps with the help of a professional debt management company. This can help them bring their debts under control and work on improving their financial situation, so they're focused on getting out of debt as quickly as realistically possible.

"With this behind them, they'll be in a better position to give their pension the attention it deserves and get some advice from a qualified financial adviser: once they've finished paying for yesterday's expenses, they'll be better placed to figure out exactly how they'll pay for tomorrow's."

Notes to Editors

Think Money is one of the UK's leading financial solutions providers, delivering a comprehensive range of financial solutions, including loan, insurance and banking solutions.

Think Money defines its mission as 'To educate, rehabilitate and advise on all aspects of financial management'.

For more information, visit the Think Money website at http://www.thinkmoney.com/.

Or visit Think Money's debt management section: http://www.thinkmoney.com/debt/debt-management/.

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