Young people told to start saving for rainy day
People starting out on the career ladder should take steps to save for retirement as soon as possible, it has been warned.
It comes after a new survey by Aegon UK revealed that Northern Ireland is the worst region in the UK when it comes to awareness of a personal pension's performance, and whether it is on track to meet retirement goals.
And, given the new Pensions Bill, experts have said it is imperative to act now because very few defined pension schemes take a large enough portion of income to pay the way for retirement.
The Pensions Bill, which includes provision for the new single-tier pension worth £144-a-week, will be brought forward in the next year and enacted in April 2016 – a year earlier than previously planned.
It will mean a single flat-rate worth just under £7,500-a-year and replaces the current two-tiered system that is comprised of the basic State pension and second State pension.
To claim the full pension – which will be worth £155 a week by 2016 – workers will have to build up 35 years of National Insurance contributions.
And husbands, wives and civil partners will no longer be able to claim a married person's allowance.
Additionally, years in which people have been out of work to look after dependents will count towards their State pension.
Economist John Simpson said: "The right time to increase your pension contributions is when you're too young to worry about it.
"Someone in their 30s should be saving something of the order of 25-35% of their income, if they can afford it."