Retirees 'face increased money problems'

Almost a third of people may face financial difficulties when they retire, the Financial Services Authority warned this week.

Its research revealed that 31 per cent of people face an increase in money problems in retirement.

To help, the FSA has introduced an online pension calculator so that anyone can work out how much they will have to live on when they retire. The calculator – at Moneymadeclear.fsa.gov.uk – lets you calculate potential retirement income based on your payments into a pension fund. Users can change the criteria to suit changing circumstances – to see, say, how potential income can be affected by retiring earlier or by contributing more.

"For many people, pensions are not something they want to think about until retirement is imminent and, by then, they may find their pension falls far short of the lifestyle they had hoped for," warned Chris Pond, FSA director of financial capability.

"So it's important to make the most of your money by considering all the choices available," he said. "The calculator can help identify the implications of your pension choices to determine if you are on the right track."