Don’t let inflation push your clients’ retirement savings off track

• FundsNetwork reminds advisers to increase clients regular contributions in line with the rise in prices

London 26 June 2008 - As the Bank of England warns that inflation will exceed 4%*, the retirement plans of many savers are at risk because their regular contributions are fixed at a flat rate.

Fidelity FundsNetwork™, is reminding advisers to increase their clients’ regular contributions by at least the rate of inflation each year so that their retirement savings keep pace with prices.

At 4%, inflation can have a highly corrosive effect on savings. The real value of £1,000 - its spending power – more than halves to £456 in just 20 years at this level of price rises. RPI, the former measure of inflation, is currently 4.3%**.

David Dalton-Brown, Head of Fidelity FundsNetwork, says: “We haven’t really had to worry too much about inflation over the past decade. The Bank of England has been very successful at keeping the consumer price index (CPI) close to its target of 2%. However, rising fuel and food prices are pushing up inflation around the world.

“With CPI in the UK forecast to top 4%, there is a real danger that many retirement plans will go off track if regular contributions are not increased.

Dalton-Brown continued: “With the recent volatility in investment markets, some clients may be tempted to wait until conditions improve. However, with regular contributions offering the benefit of pound-cost averaging, this can be an ideal way to keep clients' pension funding on track in times of turbulence."

The FundsNetwork SIPP has a facility that enables clients to opt for an automatic increase in their contributions. This increase can be pegged to the annual rise in National Average Earnings or to a percentage between 1% and 10%.

FIL Limited (“FIL”) and its subsidiary companies serve the major markets of the world by providing investment products and services to individuals and institutional investors outside the US. FIL Limited manages a total of £130.4 billion of assets***.

<sub>Notes to editors:
* Source: www.bankofengland.co.uk/monetarypolicy/pdf/cpiletter080616.pdf 16.06.08
** Source: Fidelity FundsNetwork, 23.6.08
*** Source: Fidelity as at 31.03.08
FundsNetwork, Fidelity’s fund platform, was launched in June 2000. It offers advisers and their clients the ability to invest, manage and monitor their investments in one place, bringing them control, efficiency and new business opportunities. The FundsNetwork service is offered and managed by Financial Administration Services Limited. FundsNetworkTM is a trademark of FIL Limited. Any opinions expressed are made at the time of writing and can be subject to change without notification. The value of investments can go down as well as up and an investor may not get back the original amount invested. Past performance is not a reliable indicator of future results. The FundsNetwork SIPP is provided and administered by Standard Life Assurance Limited. Standard Life Assurance Limited is registered in Scotland (SC286833) Standard Life House, 30 Lothian Road, Edinburgh, EH1 2DH. Standard Life Assurance Limited is authorised and regulated by the Financial Services Authority. Any opinions expressed are made at the time of writing and can be subject to change without notification. Assets as at 31.03.08 are those of FIL Limited.</sub>