Millions of people will have to work until they are over 75 because they aren't saving enough for a comfortable retirement.
Research carried out by the Pensions Policy Institute shows that people are not saving enough to cover the fact they will live longer than previous generations.
'In the past 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,' says Niki Cleal, PPI director.
The research found that 45 per cent of people in their 50s would have to work an extra 11 years past the state pension age, currently 65, if they wanted to have a comfortable income in retirement.
Comfortable in retirement
'On a positive note, around 40 per cent of today's over 50s who are still working might 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,' adds Cleal.
The PPI has calculated that a comfortable retirement income would be 50 to 80 per cent of gross income when people were working.
'These figures show that the traditional pattern of retiring and living comfortably on a pension earned over many years of working has broken down,' says Michelle Mitchell, charity director general of Age UK. 'Lower annuity returns and other factors mean that more and more people will have to work past their state pension age - and often for many years - if they are to have enough money to live comfortably.'
Mike Morrison, head of pensions development at Axa Wealth, says the news from the PPI shows that planning for retirement has never been more crucial.
'Planning for your retirement should be treated as an ongoing process, and not something sought a few months before finishing work. Retirement is meant to be a time of leisure and anything that can be done to increase income shouldn’t be underestimated,' he comments.
This was written for our sister website Moneywise
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