'Work longer to bridge pensions gap'

SAVERS in their mid-40s may have to work and save for an extra 20 months or increase their investment by around 28 per cent until they retire in order to fund the pensions gap, an asset management firm has warned.

Brewin Dolphin has produced an online calculator to allow individuals to "gauge the impact of Britain's pensions time bomb".

Executive chairman Jamie Matheson said: "The 2009 Budget saw the UK government announce that it would remove higher rate tax relief for those with income over 150,000 a year, taking a further 3 billion a year from pension funds. The long-term costs the country will bear as a result of Britain's pension deficit will dwarf the estimated 5bn a year raised by abolishing the dividend tax credit in 1997."