Half of over-50s 'will have to work beyond state pension age'
- Published on Wednesday, 25 April 2012 09:26
- Posted by Scott Buckler
Today the Pensions Policy Institute publishes new research which considers the implications for retirement income of Government policies to extend working lives
The research examines how much longer today’s over 50s in England in 2011 might need to work and save to meet target levels of retirement income. The research has been sponsored by a consortium of Age UK, the Actuarial Profession, Aviva and Partnership.
Commenting on the findings of the research, Niki Cleal, PPI Director, said:
“In the last three decades, life expectancy has increased dramatically in the
UK. On the whole this is good news for individuals, but it also means that
many people will need to save more and work longer if they want to have an
adequate retirement income.”
“The research found that the vast majority of the over 50s who are working in 2011 - around 85% - might have sufficient state and private pension income to meet a minimum acceptable standard of living in retirement of £11,000 per annum if they continue to work and save until they are eligible to receive their state pension. However, for many people an income in retirement at this level is unlikely to be considered adequate.”
A smaller proportion of today’s over 50s are likely to be able to have a high enough retirement income to replicate the full standard of living that they enjoyed during their working life.
Niki Cleal said:
“On a positive note, around 40% of today’s over 50s who are still workingmight have sufficient state and private pension income to have a retirement income that would allow them to replicate their full living standards in working life, if they continue to work and save until they are eligible to receive their state pension.”
“A further 10% of the over 50s might have sufficient state and private pension income to replicate working life living standards, if they continue to work and save for between one and five years after their State Pension Age.”
“On a less positive note, 5% of today’s over 50s might have to work and save for between six and ten years after State Pension Age and a further 45% would have to work and save for eleven years or more beyond their State Pension Age to replicate their working life living standards in retirement. This demonstrates that many people need to start saving more today, if they want to avoid having to work much longer than they planned and want to have an adequate retirement income in the future.”