A nasty shock for pension savers

Think you're saving enough for retirement? Think again, says Holly Thomas in The Sunday Times. The financial regulator, the Financial Services Authority (FSA), plans to force pension schemes to adopt more realistic assumptions when estimating the value of your retirement pot.

Funds will be asked to make their projections based on 5% annual growth rather than the 7%-8% used by many schemes. This strikes us as more realistic, but the chances are it'll give a lot of people a nasty shock.

A 35-year-old man saving to provide himself with a £10,000 annual income from the age of 68 (rising each year by inflation) will need to save 43% more every month, or £601, according to Hargreaves Lansdown, using the new realistic' assumptions rather than the old ones.

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Last week we mentioned three scams you should watch out for. Here's a fourth. As Tara Evans reports on Thisismoney.co.uk, firms are approaching people with credit-card debt and offering to write off the whole balance in return for 20% of the amount outstanding paid up front. It sounds too good to be true, because it is. Don't send these firms a penny as the Office of Fair Trading notes, debts cannot legally be sold to a third party without the original lender's consent.

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