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Waiting for Personal Accounts could cost thousands

Waiting for Personal Accounts could cost thousands

Category: Pensions

Updated: 25/03/2009
First Published: 25/03/2009

This article was correct at the time of publication. It is now over 6 months old so the content may be out of date.

Britons have been advised to join their company pension scheme now rather than wait for the Government's Personal Accounts in 2012.

The programme will offer millions of employees a workplace retirement scheme for the first time.

However, anybody that waits until the scheme is rolled out to start saving could miss out on a bigger pension pot by the time they retire, according to Fidelity International.

A 25 year old willing to pay £300 a month from now could miss out on up to £175,000, while somebody paying a relatively modest sum of £100 a month could gain an additional £58,000 by starting their pension now.

By enrolling into a company pension scheme, Britons on the average wage of £26,020 could also boost their retirement pot by another £136 a month if the employer has promised to contribute too.

"Personal Accounts in 2012 will see a big shake up for both companies and employees but a real concern is the prospect of people sitting back until they are forced to save," said Julian Webb, head of UK defined contribution pensions at Fidelity.

"Starting early simply gives people the opportunity to build a bigger pot by retirement - it also puts people in a better position to recover from falls in stock markets and interest rates."

People with access to a company pension will automatically be enrolled onto them, rather than enter a Personal Account when it is rolled out.

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