More people are lowering their retirement expectations
Recent research has revealed that the rising cost of living is having an impact on the retirement expectations for many people in Britain.
A survey of 1,589 workers has been conducted by the Baring Asset Management investment firm. It has revealed that 11% of working people do not expect to be able to stop working until they are between the ages of 66 and 70. This figure has doubled since the same study last year.
Furthermore, another 36% of people have indicated that they do not know when they will be able to retire and another 10% have said that they do not have any plan to retire at all.
The number of people who have plans to retire between the age of 50 and 60 has been falling since the recession and is down to 11% now, when it was 31% in 2008. Around 40% of workers now aim to retire after they reach the age of 61, over a third higher than last year’s figure.
Marino Valensise, a chief investment officer from Baring Asset Management, has suggested that many people are living longer and not saving enough for the future, which is leading to the increase in their expected retirement age. Mr Valensise also warned that the working age of British people is probably going to continue rising, adding: “It is apparent that the outlook for those planning their retirement is very uncertain for many people. We have seen the cost of living continue to rise, making retirement more expensive and resulting in many more people having to put retirement off for a few more years.”
The number of people who are already over the age of 65 and still working is now at record levels.
Approximately one seventh of people who are over 65 and still working have indicated that they still do not know when they will retire. For those between 45 and 64 and approaching retirement age, one third are unsure about when they can stop working.
Some experts have raised concerns that people are unsure about their retirement, even at the age of 65. Economic pressures may add to the problems many who are looking to retire face, with some experts warning that the economy needs to see a quick improvement or older people may be forced to fuel the future for the younger generation.
The Department for Work and Pensions (DWP) has suggested that approximately 7 million workers are not saving enough to meet their retirement needs. Only 15% of people between the age of 16 and 24 contribute to a work pension. Furthermore, 42% of workers between the age of 45 and 54 also do not currently contribute to a work pension.
Steve Webb, the Pensions Minister, warns that young people are now facing a very different financial future than their parents and the lack of prudent savings and pension plans could cause many to be much poorer in their retirement years.