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Pension health warning

An increasing shift to money purchase pensions through stakeholder may leave many more people with very low incomes if ill health stops them working, according to Government actuaries.


Most final salary schemes provide some provision for early retirement on ground of ill health, while money purchase schemes leave individuals with only the money they have saved if they are incapacitated.


Fewer than 1m of the 13m people who are outside a final salary scheme have permanent health insurance.


Right-wing think tank Politeia member Chris Daykin says: “Few take out this cover because it seems rather expensive and most people are prepared to take a chance on it not happening to them.”


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