Pensioners will be ‘still in debt’ despite reforms

Responding to the Queen’s speech in which the new pensions bill was announced, Fidelity International said that the reforms will still see a typical household face a 50 per cent income drop on retirement, sparking debt fears.

Simon Fraser, president of institutional business at Fidelity International, warned: “People should not be lulled into a false sense of security by these reforms.

“For the typical household it will not have the impact on their standard of living in retirement that people are expecting, especially as these proposed reforms are not going to happen overnight.”

He also stressed that many pensioners or those approaching retirement could do with debt advice now as the reforms will not be implemented till 2012, when earnings will once again be linked with pensions.

Similarly, while the retirement age will not rise to 68 until 2044, Mr Fraser urged current Britons to start saving and their debt management plan now so that they are comfortable later in life.