LONDON / The Guardian / Money / Retirement Planning / April 13, 2011
Survey by Prudential shows a 50% increase in the number of people having to work longer as they cannot afford to retire
By Carri-Ann Taylor
The pension provider's Class of 2011 report found that 38% of people are delaying their retirement, and 40% of those say they will have to work until they are 70 to have a comfortable income
Many people approaching retirement are having to delay their plans. Photograph: Frank Baron for the Guardian
.It also shows that 22% of those delaying retirement are doing so because they can't afford to stop working, up from 15% last year. They had intended, on average, to retire at 62, but now believe they will be at least 68 before they can draw a pension.
The hardest hit are those living in London and the south-west, with 43% and 44% respectively saying they will have to stay on in work. By comparison, only 31% of those living in Scotland said they would postpone retirement this year.
Ros Altmann, director general of Saga, said the problem is that many people are not getting the pensions they had hoped for or expected. "It is a difficult problem – so many can simply not afford retirement. They have debts and are still paying off mortgages.
"Many people extended their mortgages and took out extra loans in the hope they could pay them off with the income from other pensions and investments. But too often this has just not happened and the result is that people are having to keep working. The whole situation is quite serious."
But Altmann warned that for some people staying in work is not an option. Despite the coalition government phasing out the default retirement age of 65, reports persist of age discrimination in the labour market.
From 6 April employers can no longer compel employees aged 65 and above to retire on the grounds of age. But critics say this legislation does nothing to help people in their 60s who have left work and now want to get back in to employment.
Altmann added: "For people that are well qualified and on good incomes it can be easier to find work, but for those less qualified it is more difficult. The more vulnerable you are, the more vulnerable you become."
She said the key is to plan ahead: "Our main message is to assess your finances. Can you live the way you want, and if not [to] consider your options.
"If you are no longer working and you want to go back to work think about what skills you have – people in their 60s have a wealth of life experience, a consultancy or advisory role could also be an option. Otherwise, it is not too late to retrain."
Vince Smith Hughes, head of business development at Prudential, said: "Compared with last year's findings, there has been a sharp increase of almost 50% in the number of people who are postponing retirement. Many of these people are choosing to do so because they wish to continue working, but there is a large proportion who simply cannot afford to give up work.
"The only realistic option for those who want to avoid having to delay their planned retirement is to start saving as much as they can as early as they can. Seeking professional financial advice is a prerequisite to securing the retirement income that people need, and we recommend that those who are approaching their planned retirement age should speak to a financial adviser on at least an annual basis."
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