Consultant John Ralfe, said: “The total cost of the more generous, but later pension, is virtually the same as the cost of the current, less generous but earlier pension,”

The Government was quick to deny the research and called into question the findings of the study, saying that the research only looks at one section of the reforms on pensions and that Britain stands to save billions of pounds by raising the pension age to 67.

A Treasury spokesperson said: “This analysis is partial,”

“It is based on stylised assumptions rather than an overall workforce model, and only includes one of three strands of public service pensions reform which will deliver savings, whereas the overall cost ceilings agreed with unions include all three.”

The research looks at accrual rates, which shows the rate at which a pension fund builds up.  These have increased substantially since the reforms. The study also shows that NHS workers and teacher’s pensions will automatically increase in the new scheme.

The increase works by a pre-agreed percentage over inflation using the Consumer Prices Index (CPI), they don’t change if there is a salary freeze or if salaries increase at a rate lower than the CPI.

“The Teacher’s Pension Scheme (TPS) and NHS have annual increases over CPI baked in, which gives no flexibility to have a pension freeze along with a pay freeze,” Mr Ralfe says in the study.

“Pensions will still go up, even if pay is frozen.”

The report tells us the taxpayer is charged for 31% of the average public sector wage, at the retirement age of 60.  But after the reforms, the taxpayer will still be paying almost the same amount, 31% of a teacher’s wage, 32% of an NHS employee’s wage and 26% of a civil servant’s salary, thus not saving any money.

The Government has replied by stating that the report only looks at part of the picture, because as well as raising the age of retirement for all public sector works, the Government has increased the size of the contributions that employees must pay by 3.2%.

It has also changed which inflation index it looks to for pension rises form the Retail Price Index (RPI) to the Cost Price Index (CPI).  The RPI is generally the higher of the two as it looks at mortgage repayments.

The Government are adamant that all of the changes taken into consideration together amount to sizable savings for the taxpayer.

“The government has been clear that reforms to public service pensions will save the taxpayer tens of billions of pounds over the next few decades and significantly improve the long-term fiscal sustainability of this country,” the Treasury spokesperson said.

The National Association of Pension Funds (NAPF) ran their annual survey and discovered that those who don’t have confidence in the current pension systems now number more than those who do.    

The NAPF, which represent nearly 1,200 pension schemes worth almost £800 billion, have asked the coalition to increase public confidence in the pension system before millions of Brits end up in dire poverty once they retire.

The survey was conducted with 900 working adults and nearly half admitted that they had no confidence in the pension system as a way of saving money.  Only 4 in 10 said that they were confident.   In the same survey last year, the number of people who were confident in the pension system was 5% greater than those who weren’t.

Last year the survey showed that 45% of people thought that a pension scheme was the best way to save for their retirement, this year it was just 35%.

Investing in property and ISAs came out as the most popular choices for saving for retirement in this year’s survey.

Chief Executive of the NAPF, Joanne Segars, warned that public faith in pensions had fallen at the very time it needed to be growing.  She went on to say that the decline in confidence is very worrying because in 2012 the auto-enrolment workplace pension comes into effect.

The Pension Confidence Index showed that 3 in 10 Brits saw a pension as the most important job benefit; this figure was 4 in 10 in 2010.

Ms Segars said: “Politicians have to boost confidence in pensions, or people will simply opt out. We need a pension framework that the public can believe in and rely on.”

“We urge the Government to do more to fulfil its own pledge to reinvigorate pensions. It must get on with reforming the state pension by setting a simpler, single tier system. This would set a clear foundation for retirement on which people can build their workplace pension and savings.”

“The Government must stress the importance of saving,”

The current recession and in particular the fall of the stockmarkets has put many people off pensions, along with the increased retirement age and other hidden costs of retirement.   To add to this misery, the rising inflation and tightening household budgets have made many families reassess their priorities and pension payments have been cut.

Pensions Minister, Steve Webb addressed the issue: “We entirely agree that more needs to be done to boost confidence in pensions. We’re working on plans to simplify the state pension – providing a firm foundation on which to save ahead of the introduction of automatic enrolment.”

At least 6 months before your intended retirement date you need to write yourself a checklist, this article will give you a few pointers to help you plan. We have all heard that well known Cliché “fail to plan, plan to fail” well it is so true.

So lets start with a few things you need to organise:

• Annuity – Are you aware how much income yours will provide?
• State Pension – Have you obtained a forecast of your state pension entitlement? You can get a BR19 form or go online at the Direct.gov website
• Life Insurance – Once you finish work will your family still have the vital protection in the event of your death?
• Will – Have you made a will?
• Emergency fund – Do you have an emergency fund set aside for any unforeseen spending requirements?
• Benefits – Have you investigated what you may be able to claim, e.g. Council tax benefit?

Now that list is just for starters, I am sure you can add a few of your own.

If your pension provider has not contacted you at least 6 months before you retire then you need to call them and get a retirement benefits pack from them. It is so important to get an idea on what income your retirement annuity will provide so you can plan your retirement expenditure.

Enjoy your retirement!!

From this date it will no longer be possible for you to receive an income or a tax-free lump sum from a private pension before your 55^th birthday, except on the grounds of very poor health.

How does this affect you?

• Aged 50 54 on 5 April 2010: if you will be aged between 50 and 54 on 5^th April 2010 and wish to access your pension benefits in the near future you must do so before 6^th April 2010, otherwise you will lose access to your pension for up to five years.
• Under 50 on 5 April 2010: if you won’t reach age 50 until after 5^th April 2010, but were planning to retire before your 55^th birthday you will now have to wait until age 55 to receive an income or take a tax-free lump sum from your pension.

If I am going to be between 50 and 54 on 5 April 2010

What options do I have?

There are a number of options available to you three of the most common options are:

1. Buy an annuity

You could choose to buy an annuity before the change in the minimum retirement age takes place. Annuities provide a regular income, usually for the rest of your life, in return for a lump sum payment from your pension plan.

2. Transfer to an income drawdown plan If you need to withdraw an income from your pension, an income drawdown plan could achieve this for you. This is an alternative to buying an annuity.

It allows you to take an income from all or part of your pension while leaving the rest invested. You can increase and decrease your income, within set limits, to suit your needs.

3. Do nothing You may be sure you won’t need access to your money until age 55

So what do I need to consider?

You should consider taking independent financial advice to discuss the options available and which would be most appropriate for you. Visit our website for more information http://www.annuitysupermarket.com