But maybe not if you visit Peter Duffy, a director of IFS, the NUJ's new financial advisers. I had a client who came to me to ask whether he should buy a pension or just spend the money on booze and fags. Despite a new pension credit, which will give people with small savings an extra top-up from 2003, people who have saved some money may end up wishing they had just spent it. Every adult has a one in six chance of getting a serious illness before they are 65, Duffy warns. Even if you earn enough income for it to be worth saving for retirement, a pension may not be the best solution.
People say everyone needs a pension.
Stakeholder pensions are essentially private pensions, regulated by government to avoid the worst characteristics of private pensions - high charges, penalties for making additional payments or skipping payments, punitive transfer costs. But stakeholders are hard work compared to occupational pensions, where employers contribute. If you are in your 40s and 50s, perhaps even as young as your late 30s, you may well be better off investing in ISAs and other tax-free savings rather than a pension. It will be much less for women, who live on average longer, and for people who retire earlier. With ISAs and other tax-free savings, you decide how to use the money.