Aviva interviewed over 1,400 people over the age of 55. More than half said they intend to retire between the ages of 66 and 74. Indeed, 18 per cent said they expect to retire between 71 and 74. The most common reason for continuing work was to improve their finances, although other reasons included to stop getting under their partner’s feet or to help keep their mind active.

Nearly a fifth of those questioned still had a mortgage, with the average loan being a touch over £50,000. A quarter had less than £2,000 in savings and just 13% had more than £100,000. Many of these have said that they are not able to save money as there is little left at the end of each month. Of those who are managing to put some money away, the average amount saved is just £142 a month.

Official figures show that nearly 1.5million who have reached state pension age are still working and experts are predicting that this figure will continue to rise.

Recent research has also shown how people are underestimating their pensions too – most think they will get around £15,000 per annum when they retire when the real figure is closer to just £6,000.

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The figures are a third higher than five years ago, and form a double blow when falling pension income and rising living costs are taken into consideration. This means that people need to start saving from an early age if they wish to save enough money to ensure they are able to retire on a sensible income. Pension incomes have started to decline thanks to ever-increasing average lifespans and lower returns currently from the financial markets.

The pension figures were compiled by MGM Advantage and show that the average household required £564,227 to cover the cost of the first 20 years of people’s retirement. The figures are based on the annual household expenditure for those aged 64 to 75 which is currently £23,107 per year, with the expenditure for those aged 75+ at £14,926. Five years ago, the average expenditures were £17,737 and £11,700.

Naturally, the figures will be slightly skewed according to what are of the country you live in: London means the average retired couple will need £668,553 over 20 years whilst the North East comes in at £473,178.

Another concerning figure is the amount of debt that people have when they reach retirement age. Recent research shows that the average amount of debt when pensionable age is reached is around the £35,000 mark. This debt includes mortgage debt, loans, credit cards and overdraft facilities.

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The efficient markets theory first came to prominence in the 1960s. However the major problem of the theory is that although it looks good on paper, markets are rarely as efficient in real life as investors do not always make fully rational choices and investments.

The latest alternative is the adaptive markets theory which draws inspiration from a variety of places including neuroscience, economics and evolutionary biology. The theory goes that behaviour is not intrinsic; instead, it depends on the surrounding environment and evolves by natural selection.

So what does this actually mean? The markets are equivalent to an ecosystem; The market is comprised of ‘species’ competing for natural resources i.e. profits. The survival of the fittest/natural selection part comes in as profitable investors will remain investing in the market whilst the investors who lose money will fall away. Share prices are affected by the environmental conditions i.e. the number and nature of the people competing for them.

The theory is not fully complete yet therefore the full implications of the theory are not yet known however it does appear to suggest that as the environment changes, so too will the investors have to change their strategies. This may seem slightly obvious however there is one key difference: efficient markets theory promotes long-term investment and tracker funds as tracker funds should beat actively managed funds long-term most of the time. However long-term doesn’t always pay off, particularly if the index suffers a massive dip.

The new adaptive markets theory says that although there are long periods of stability, there may be several periods of instability. When this happens, only those who can adapt quickly will survive (i.e. make money). This means that if you are actively looking to make a lot of money, you need to be adaptable and you also need to be able to start the beginnings of a crisis so that you can quickly adapt to the situation. Of course, this is easier said than done!

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Sipps allow you free rein as to where your money is invested whereas standard personal pensions tend to have quite narrow choices.

The beauty of Sipps are that if your funds start to struggle, you can take full control and switch the investment to other areas to make your nest egg grow further.

Almost anything can be placed into a Sipp – from unquoted shares to your own commercial property. With contributions now as low as £50 per month or as a transfer of £5,000 from another pension plan, Sipps are now available to almost everyone.

So is a Self Invested Personal Pension for you? The Financial Services Authority (FSA) has warned that some people have been given the ‘hard sell’ when it comes to Sipps and some of these may have been better off with a simple stakeholder pension of personal pension. As with any financial investment, you really need to do your research to ensure you are getting the financial product that best suits your needs.

If you are considering a Sipp, you will need to ensure you have the time to fully research what you are planning to put into it.

A Sipp will allow an investor to control all aspects of their pension planning giving them flexibility and diversification, which can sometimes be limited in a more traditional pension plan. However this means that you will need to fully understand what you are investing in.

Sipps also tend to be quite cost effective – many insurance based products are percentage driven meaning that as the fund grows in size, so does the costs. Sipps, on the other hand, are typically fee-based so no matter how big the fund, the same fee is payable and therefore as the fund increase, the percentage paid actually becomes smaller.

Low-budget Sipps often don’t come with advice and this means you are really taking on a greater level of risk and you need to ensure you are really very financial savvy. There are many low-cost Sipps around and if you have £50,000 or less to invest, these are probably the Sipps for you.

At the other end of the scale, there are the high-end advice-drive Sipps, however these tend to be if you have a pot of £200,000+. High-end Sipps will be more expensive however they tend to come with advice and you do get what you pay for.

If you are planning to go down the Sipp route, there are eight questions you need to ask:

1. What is the Sipp set-up fee?
2. What is the Sipp annual management fee? Usually, this is a flat fee.
3. How much are the annual fees on the Sipp funds? There are usually ongoing charges of around 1.5%.
4. How much are the initial charges on the funds – Oeics and unit trusts?
5. How much are dealing charges on shares and investment funds?
6. How much are the transfer fees? Are there charges levied for moving money, funds or shares into the Sipp or to another pension provider?
7. What rate of interest will I get on any cash left in the Sipp?
8. Are there any other charges e.g. costs for buying an annuity, costs for paying out on death?

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Some savings accounts have been given rates as low as 0.05 percent. To put that into perspective, a basic rate tax payer with £5,000 in an account with this interest rate would receive £2 a year after tax; for a higher-rate tax payer, this equates to just £1.50 a year after tax. The low rates mean that savings rates are lower than the rate of inflation – September’s inflation rate was 1.1 percent, October is 1.5 percent – thus savers are losing money in real terms.

Any higher rate tax payer who has money in an account paying less than 2.5 percent interest is actually losing money.According to Moneynet, over 90 percent of savings accounts are paying less this thus most higher-rate savers are losing money.

For basic rate tax payers, interest rates have to be over 1.875 percent to beat inflation. 80 percent of savings accounts pay less than this, thus most basic rate savers will also be
losing money.

For people such as pensioners who rely on the interest on their savings accounts to help them pay bills, the effects are devastating. The poor rates are also deterring potential new savers from opening accounts.

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Water – the stuff we often take for granted – has so far been ignored by many investors however interest in this precious commodity is on the increase. So why has it been ignored so far? The first reason is that it isn’t often traded by itself. Many investors also look to the more traditional trades such as oil as these have the potential for big gains whereas water tends to be seen as quite a defensive strategy.

But water really may be a good buy.

Despite living on a planet which is about 70% covered in the stuff, only around 3% of the global water supply is actually deemed drinkable. As the Earth’s population increases, the demand for clean, drinking water is only ever going to go up. The major problem with this is getting the water to a drinkable standard – currently, it is problematic to desalinate water and this means that water is one of the most important resources of today.

It’s not just water that you have to buy either – look for stocks that support water for example water infrastructure or water treatment stocks. And if you aren’t keen on investing directly, there are plenty of funds that have a significant water skew to them. Although this year’s returns don’t look particularly impressive, this is a stock that could do very well in the medium to long term.

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The FTSE 100 index was pushed up 3.2 percent last week. This has followed a six month rally that has driven blue-chip shares up 50 percent over their March low.

Experts believe that both of these rallies are in part due to ordinary buyers, that is buyers who are not represented by big investment firms. Since June, the number of these buyers has risen to levels equal to the dotcom boom of 2000, and in the last three months, deals placed through execution-only stockbrokers has risen to over 4 million.

Experts have said that although the big firms still do the majority of share trades, at present it is all the small investors who are actually driving growth in the markets.

Many people have turned away from traditional savings accounts because of the very low interest rates currently on offer. With uncertainty in the property market, there is also wariness over investing in property. Thus, with many believing that shares and the FTSE can only go up in the next few years, ordinary householders are turning to the stock market to help make some money.

However some experts are concerned that many of these new investors may get their fingers burnt. Many are predicting an Autumn correction and some believe that the market is overpriced and dividends are under pressure and likely to fall. The issue with falling prices is that with a savings account, the capital is never lost whereas there is a risk with stocks and shares investments that the capital invested may be lost.

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Research by Aon Consulting has shown that the cost of meeting pensions is has risen with the 200 largest schemes now facing liabilities of over £500 billion. The rise in liabilities is down to a number of factors, most notably the fall of corporate bond yields (on which the costs of future pensions are based).

The figures make poor reading for those heading for retirement age in the near future as it means they will either have less money per year than they had planned for, or they will have to work for longer than anticipated.

Around half of those who have already reached retirement age are said to be still working in either part-time or full-time jobs to help make ends meet, and these numbers may well rise in the future.

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The news is full of articles on the recession – the lack of jobs, the rising levels of unemployment, the cost of pensions and the lack of savings. So now is a fantastic time to start saving. Here at MoneyTowers, we have put together five quick tips to hep you save £50 a month.

1. Entertainment
Instead of going out, bring the entertainment home. That could mean instead of eating out in a restaurant, buy in the ingredients and cook at home; instead of clubbing, invite your friends round for a dinner party; instead of going to the cinema, hire a film instead. Have a think about cheaper activites on the weekend too – hiking, camping and beachcombing are all low-costs or free and can be just as enjoyable as more expensive past times.

2. Libraries
Make use of your local library – they are free after all! And libraries don’t just have books – they often have DVDs and CDs that you can borrow. Many libaries also offer free internet access

3. Eating Out
Are you a coffee or tea fiend who likes to get coffee from coffee shops? Take a thermos flask or switch to tap water as cutting back on the coffee is not only good for you, but can be good for your wallet too.

4. Grocery Shopping
Always write a shopping list before you go shopping and stick to it religiously. This way you will stop yourself impulse shopping and buying things you don’t need. Shopping online can often also help stop those impulse buys. If you meal plan ahead of time, it is also likely that you will waste less food therefore save yourself money. Swap expensive products for supermarket own brand goods – try swapping just one or two items per shop. You’ll be amazed at how some staple products are almost identical yet have wildly varying costs.

5. Treat Yourself
Don’t forget to treat yourself once a week otherwise you’ll never stick to your budget. Life is there to be enjoyed, however you will enjoy your treats more if they come in moderation. Treats don’t have to be expensive either – try a luxurious bath filled with rose petals and bubble bath with a glass of wine and lit scented candles, or take some time out for a romantic walk with your partner.

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The figures are a stark contrast to the figures two years ago when pension funds were seen with a surplus of more than £100 billion. In the space of a year, the surplus had been wiped out and funds were seen with a deficit of £13 billion. This figure has now increased to a deficit of around £200 billion just one year later.

The massive deficits in pensions funds have forced most companies to close their final salary pension schemes and many believe that companies who still offer final pension schemes may soon close their doors.

Many civil servants enjoy final salary schemes which look to be setting up massive taxpayer liabilities in the future. Some experts reckon that civil servant final salary pension schemes may end up costing over £1 trillion.

Many have criticised current prime minister Gordon Brown for not encouraging people to save. In 1997, dividend payments to pension funds were snatched away. In this year’s Budget, pension plans again were meddled with top-rate tax payers finding that their tax relief had been reduced.

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