Yes, it's the dreaded 'P' word. But even if you switch off every time it's mentioned, all may not be lost.

As retirement looms a secure income is a big concern. It sometimes seems like there's a new study every other month, warning us of possible catastrophe if we haven't spent our whole working life saving.

For instance, Scottish Widows published a pensions index in June 20071 which revealed that, although more Britons are now saving for their retirement, we're still not saving enough.

According to the financial services company, workers are putting away an average of nearly 8% of their earnings - up from 6% in 2006, but well short of their recommended target of 12%.

Don't believe the hype
However, there are some who disagree with all these gloomy predictions. In the US, Laurence Kotlikoff, economics professor at Boston University, believes that standard pension calculators 'wildly' overestimate how much people need to save for retirement.

'They can easily tell a middle-class couple to save four times more than they should,' said Kotlikoff, who feels that the finance industry uses 'unbelievably crude' methods for setting savings goals. The cynics among us might say that this is good for financial services companies - they can sell us more products to calm our fears.

John Karl Scholz, economics professor at the University of Wisconsin at Madison, contends that most Americans are preparing well for retirement.

The problem, he says, is the industry rule of thumb that retirees will need annual income equal to between 75 and 85% of their pre-retirement income. But this assumes 'all the spending the person does before retirement will continue all the years after retirement', Kotlikoff said, including money spent raising children and paying off a mortgage.

It's not too late
Although there isn't any research to suggest that the picture is the same here in Britain, according to the Financial Services Authority (FSA), it's not too late to make sure you have a comfortable retirement.

With their 'last-minute' saving awareness campaign, the UK's financial services regulator wants us to think about our financial position heading in to retirement. Any gap between the reality and what you were hoping for can be fixed by changing your plans.

Ways to ensure a better income after retirement include: an equity-release element to tap into the value of a home; working beyond 65; 'buying' extra years of an occupational pension scheme; and delaying when you take up your state pension.

There is always an option!
And don't forget about SIPPs - Self Invested Personal Pensions. New rules on pensions since April 2006 have given savers the opportunity to invest (tax free!) in a range of assets for their pension plan, from property to stocks and shares, or even fine wine.

Anyone under 75 can invest in a SIPP, so it's still possible to invest in the future even if you've already retired.

Don't forget - when you're considering all the options you should be aware that there are risks, as with any investment. It's always a good idea to seek out independent professional help - an expert who can advise you on the best option for your situation. Talk to friends and family to see if you can get a personal recommendation for a financial adviser, or visit www.unbiased.co.uk to find a Financial Services Authority (FSA) accredited independent financial adviser (IFA) in your area.

It's never too late to think about future finances. The chances are you've already done enough to provide for your retirement, but if it is a worry, don't bury your head in the sand - take some action now!

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1 Scottish Widows, 2007

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