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Save now for salad days

You need money. Do you consider selling your old washing machine? You know, the one with the clogged-up powder drawer and rust round the bottom. No? Well, you're probably not retired yet. About 300,000 of the UK's 11 million pensioners last year sold electrical goods, furniture or similar assets just to help them get by.

But you're not going to be like them, are you? So what are you going to do to avoid humping that washing machine into the car boot when your back says you should be lounging in the sun sipping a gin and tonic?

Talk to young teachers and many will say how they resent the chunk of money that disappears from their wages into their pension fund every month. But talk to older ones and you'll hear a different story. The full-timers are grateful that they had no option but to pay into the Teachers' Pensions Scheme, recognising that, given the choice, it would have been easy not to join, to kid themselves that everything would be all right in the end. "All right in the end", in TPS terms, means a pension of half your final salary so long as you have paid into the scheme without a break for 40 years. If this isn't going to be enough, you have to do something about it.

Research last year by the Prudential revealed a huge gulf between what people think they need to save for their senior years and what they actually should be putting aside. Most workers believe that they will have an average income in retirement of more than pound;18,000 a year.

Unfortunately, they're wrong. The average annual income for retired households in the UK is pound;12,400 - less than half the national average wage.

Given this naivety, it is not surprising that many of the 11m pensioners struggle. More than 40 per cent are living on less than pound;10,000 a year and two million are in serious financial difficulty. About 1.6m have gone back to work, half of these purely for financial reasons. About 4.5 per cent are spending money they originally intended to bequeath to their children, while 4 per cent have sold their house or accessed money through equity release schemes. Two-thirds of the 11m took no financial advice.

And, despite the existence of the TPS, quite a few of those who struggle in retirement are teachers. Late last year, the Elizabeth Finn Trust estimated that more than half a million teachers are living in poverty. They tend to fall into three categories: those who had their careers interrupted by illness, those who are carers, and the retired. In 2004, the trust handed out more than pound;164,000 to former teachers, the largest single group of people it is helping.

A substantial chunk of teachers, including many further education lecturers, are denied membership of the TPS because they are employed by an agency. Lecturers' union NATFHE has been fighting long and hard to win these staff pensions rights. Its legal battle has hinged around the case of Debra Allonby. She is one of 341 lecturers sacked by Accrington and Rossendale college in 1996 only to be re-employed as agency staff on lower salaries and without pension benefits. Last year, a European Court ruled that the Government's exclusion of agency teachers from the TPS may discriminate against women. As Ms Allonby said: "I'd got four children. I was working part-time because I was a carer. A lot of my colleagues were carers in that they were caring for their children or elderly relatives. I was paying my mortgage and that's why I was working. I wasn't working for pin money."

Unions often give cash to impoverished teachers. Last year, the NASUWT handed out pound;242,400 in grants while the Association of Teachers and Lecturers gave out pound;97,000 and the Teacher Support Network, largely supported by the National Union of Teachers, distributed pound;300,000.

To avoid going cap in hand to anyone you must check up regularly on the health of your pension. Talk to an expert or your union if you have worries. Independent financial advice is another option - a third of those in retirement wish they had sought some.

And plan ahead. Work out what bills you will have when you retire (utilities, council tax), and which ones you won't (mortgage and, fingers crossed, children). Try to decide what kind of lifestyle you want. Do you plan to stay in this country or head for warmer climes? Nearly 15m Britons say they want to live abroad when they retire, but only half will ever make it.

Tens of thousands of pensioners gamble in their old age to supplement their income. Far better to decide now what level of risk you will tolerate in relation to investments you make in addition to the TPS.

And, the younger you start, the better. Pensions are a kind of deferred salary: the more you put in, the more you get out. A rule of thumb is to save a percentage of your income equivalent to half your age. This means 40-year-olds should be looking to save about 20 per cent, 50-year-olds about 25 per cent (including your employer's contribution).

But suppose you say you can't afford to put aside any more? Well, consider this. Britons waste in total about pound;80 billion a year on food that goes off, clothes that are never worn, and memberships of clubs that are never visited, according to another piece of research by the Prudential last year. Per person, this works out at about 7 per cent of salary.

More than pound;400 a year is wasted on food - lettuce is the biggest culprit. Nearly two-thirds of households confess to throwing away soggy green leaves every week. So think about it. Try to plan ahead. After all, you'll want to still be able to buy that lettuce when you're in your seventies. Hopefully by then you'll have time to eat it.

Topping up your pension 12-13

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