Never too early to plan for retirement

The issue of saving is one that has come up time and time again during the current recession, with debt problems and low interest rates discouraging many people from putting anything away. But consumers have been encouraged to save even a small amount if they can, particularly with a view towards retirement.A study by the Lincoln Financial Group has revealed that 12 million adults in the UK are failing to make pension contributions, with almost half of these saying the need to use spare cash to cover expenses is the main barrier. For a further 23 per cent, outstanding debts are the problem.However, head of products and marketing at the Lincoln Financial Group Simon O'Connor emphasised the need for investments and for contributions to be made. He explained that although people may be struggling, long-term planning is still required."Saving into a pension is still usually the most effective way of generating a retirement income; not only do pensions benefit from tax relief, they also offer a good opportunity for income growth over the long term," he said.A similar point was made by Laith Khalaf of Hargreaves Lansdown, who observed that many consumers do not start thinking about saving for retirement until they are nearing it. He explained that although people often do not put money aside until they are in their 40s or even 50s, the latest contributions should begin is by the age of 30.Otherwise, said Mr Khalaf, workers can expect to have a "pretty miserable time in retirement". The potential for this situation has been highlighted by Age Concern and Help the Aged, with the charities noting that the increasing risk of unemployment is taking its toll.They pointed to Office for National Statistics figures showing that the number of people aged 50 and over who are out of work has increased by 15 per cent over the last three months - now standing at 14.2 per cent of people in the group.And with the number claiming Jobseekers Allowance having risen by nearly 93 per cent in a year, charity director for the organisations Michelle Mitchell remarked: "The nightmare for the over-50s is only just beginning, because job losses now will have a long-term affect on people's ability to save for their pension, condemning many to a retirement blighted by poverty."So as the recession seemingly takes its toll on people in all sectors, it could be that finding good investments and planning for the future is more important than ever.