13 July 2012
A new study has found that pensioners in the UK face a 10% chance of getting a pension that is two-thirds less than their final salary.
The researchers, from the University of Bath and University of Bristol, used historical information about equity, bond returns and wage growth to assess the financial risks of defined contribution pension schemes where contributions are invested in stock market securities.
They found that UK workers can typically expect to receive a pension equivalent to around 80% of their final salary, but people who regularly pay 10% of their wages into a pension scheme over their working life are likely to get a pension that is almost their final salary.
It was also found that UK pensioners are likely to be better off than their counterparts in other European countries such as France, Italy and Spain, who have a 10% chance of their pension being only 25% or less of their final salary.
Dr Edmund Cannon, from the University of Bristol, said: "The recent financial crisis has emphasised the need for policy makers and individuals to be aware of the risks inherent in any financial savings scheme."
Copyright Press Association 2012
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