To help people plan how much they need to save in order to be financially comfortable in retirement
Amid reports that almost one-third of people in the UK may face financial difficulties when they retire, Financial Services Authority (FSA) and Association of British Insurers (ABI) are launching a tool. FSA has said that the online pension calculator is designed to help people gauge how much they will have to live on, in retirement.
Reportedly, the pension calculator, on the Moneymadeclear website, enables anyone with a pension fund from a previous employer (those paying into a new pension scheme, or people without any existing pension at all) to calculate their potential retirement income based upon regular payments.
Chris Pond, director of financial capability, FSA, said: “For many people, pensions are not something they want to think about until retirement is imminent and by then they may find their pension falls far short of the lifestyle they had hoped for. So it’s important to do as much as possible to make the most of your money by considering all the choices available. The pension calculator can help you identify the implications of your pension choices and impact on later income to determine if you are on the right track.”
Maggie Craig, director of life and savings, ABI, said: “The pension calculator is an invaluable tool for anyone who wants to engage with planning for retirement, and you can’t be too young to start that process. As ‘defined contribution’ pensions, particularly those available through the workplace, become increasingly popular, the pension calculator will help people to plan for how much they need to save in order to be financially comfortable in retirement.”