The sooner the better

Rolling out the pipe and fleecy slippers is not the only thing that retirees should be considering when it comes to retirement.

With the impact of longevity, the arrival of stakeholder pensions, Sipps, the A-Day simplification process and now counting down to personal accounts, the retirement planning melting pot looks set to affect what the pension and investment sector can offer for retirees.

In March, The European Court of Justice ruled that British businesses could continue to force employees to retire at age 65 without breaking EU rules, leaving the population pondering over what this may mean for them.

With many up in arms saying they cannot afford to retire, this has had a great impact on what action should be taken in the run-up to retiring.

Philip Brown, head of retirement and care product development for Partnership, he said a two-prong attack from the regulator and the government will help steer people in the right direction.

He said: “The regulator could do more than it does around the education of individuals. It is just woefully inadequate. Plus, the government needs a coherent social policy around pensions and stop tweaking or change the rules.”

In taking into consideration the fact that people are living longer, Mr Brown also said that people need to adapt alongside this.

He said: “Longevity reinforces the need to be sure that retirees know what they are doing. It is a third and more of people’s lives. As longevity changes, people need to compensate for that.

“Going for a flat level pension is not necessarily the right thing to do for everyone, as it depends on personal circumstances, health and lifestyle.

“If money is already in a pension, they need somebody to help them with that. It is not a foregone conclusion that what you pay in is what you get back, and relying on other sources like websites will only incur risks.”

By starting early enough, regularly reviewing pension plans and keeping tabs on state pensions, Mr Brown emphasises that these are the key factors to jump start retirement planning.

Nigel Barlow, head of Retirement Income Solutions at Just Retirement, agreed and pointed out: “Retirement planning is a huge area. For those people who are far away from retirement, the most important thing is to do something as soon as they can.

“As life expectancy increases, you need to contribute more to a savings plan or pension. It really is that simple.

“The legislation and state benefits put people off, as you cannot predict what this will be in 30 to 40 years time. People need to engage in their pension and pay attention to it.

“It can make a huge difference, because you can be contributing the right amount, but if you are in the wrong assets or annuity rates have declined or are volatile, so it’s about monitoring what is going on.”