Look at the date, and subtract it from April 5 this year. You will know now how many days you have to make a decision which may save you from unnecessarily losing money. Read on.

Fortunately, I receive a pension: I worked for 40 years and I have been retired for 21 years. It did not occur to me at the time that for every month I worked I was also paying for half a month of retirement. And I should have known better because my work was concerned with arranging pensions for my clients.

My advice was not popular. I found that few people were enthusiastic about forgoing their immediate needs to provide for a remote future which might never happen. Buying a car, getting a house, enjoying a summer holiday were all too pressing – perhaps I should come back in a few years’ time when everything would be easier. The most impressive excuse came from an Evangelical Christian who quoted “sufficient for the day is the evil thereof” to claim that taking thought for the morrow was sinful. He is, I assume, now praying in a garret.

Such attitudes are not surprising. Two different elements in the brain are working at the same time. One element keeps a watchful eye on the future, close or remote, and nudges us to prepare; the other prompts our enthusiasm for immediate reward. And, for many people, it is the second that wins. We have inherited brains which tell us that if we do not grab now we may not survive to grab in the future.

So let’s look at the problem, using a male aged 65. An annuity of £5,000 costs today around £100,000, so perhaps you need about four times that to buy a modest income for life. (I am giving a simple example here to show the scale.) To that you will add the state pension – which may well be reduced because the younger generation think it is over-generous. They will change their minds too late.

If we assume 30 years to retirement and three per cent annual growth, the contribution from you or your employer will need to be more than £2,000 a year for an annuity of £20,000. But there’s a snag: inflation. Assuming two per cent (the Bank of England’s target), your modest pension will have substantially lost in value by then. Of course you can postpone your contribution for, say, five years, but the cost each following year will have risen by more than a third. No doubt your salary will have risen too, but by then perhaps you will have children and one of you will work part time. You may have to wait until the children have left home before you find yourself prosperous again – but your retirement date is now that much closer.

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