Advisers say a report recommending individuals put off saving into a pension until age 35 and then build up their contributions to 35 per cent of their salary by age 55 is “unrealistic”.
A discussion paper from the Cass Business School Pensions Institute, published on Monday, says in order to maximise retirement income, a person should not contribute to a pension scheme until they reach age 35.
The report says the contribution rate for a typical male worker should then be steadily increased to between 30 and 35 per cent by age 55.
It says: “To maximise their standard of living over their lifecycle, individuals should wait until they are several years into their career before starting to contribute to a pension plan. Workers are better off consuming their initial low incomes rather than saving them.”
Syndaxi Chartered Financial Planners managing director Robert Reid says: “It is unrealistic to expect people to sacrifice so much of their salary when they are 55 because other commitments, such as paying for a child to go to university, will inevitably take precedent.”
Informed Choice managing director Martin Bamford says: “It is true that generally people would be better off paying back debt when they are younger and saving for retirement in their mid-30s but I do not think many would be willing to contribute a third of their salary to their pension.”