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The Actuary The magazine of the Institute & Faculty of Actuaries

Save for pensions after 55, suggests Cass

Academics also recommend that governments should consider compulsory annuitisation of pension saving, enforcing the rule for workers aged 35 and over.

The research suggests that individuals' incomes start off low, and they are better off putting any money left over at the end of a month towards costs of living and improving their quality of life, instead of depositing it into a defined contribution pension scheme at the earliest opportunity and depriving themselves in other areas.

It states that the "optimal" contribution rates are between the years of 35 and 55, where it increases steadily from zero to around 30-35%. The caveat, however, is whether individuals have the willpower to maintain these high contribution rates as they approach the end of their working lives.

The research was led by Professor David Blake, director of the Pensions Institute at Cass, colleague Douglas Wright and Yumeng Zhang, Legal & General Investment Management, who co-authored two papers, supporting their research:  

>> Age-Dependent Investing

>> Target-Driven Investing.