More people will have to work later in life to maintain an adequate standard of living.

Some 6.1m of today’s over-50s expect to work past the current state retirement age, according to data from LV=’s Working Late Index. The report reveals that, on average, those planning to work past state retirement age will work for an extra six years, which could see them retiring at age 71 for men and 66 for women based on today’s retirement age.

 

Affordability, the key reason

One in five over-50s said they expect to work for at least a decade past the current state retirement age. Affordability is the key reason stated by 51 per cent of over-50s who plan to work beyond the state retirement age, while a further 11 per cent want to delay taking out their pension in the hope its value would increase over time.

Continuing to work for financial need

The data from last year’s Working Late Index showed that 43 per cent of those planning to work beyond state retirement age said they would do so because they enjoyed the job they do. In 2011 this had fallen to 37 per cent, which LV= claimed represented a shift to continuing to work for financial need rather than enjoyment.

Moreover, these trends are likely to continue as the state retirement age increases to age 65 for women in 2018 and to age 66 for both men and women in 2020.

Taking professional advice

Ray Chinn, Head of Pensions at LV=, said: ‘The trend of people retiring well into their 60s, or even their 70s, has been increasing slowly over the last few years.
‘The rising cost of living, low interest rates on savings and the fact that as a nation we are living longer has had a significant impact on our retirement aspirations and the amount of money we need to live a comfortable retirement.

‘Our findings have shown a shift to continuing to work for financial need rather than enjoyment and we’re likely to see this increase further.’

Working later in life

Ray Chinn continued: ‘In recent years we have seen many people cutting back on the amount they are saving towards retirement. As a result many will have no choice but to work later in life to maintain an adequate standard of living in old age.

‘We urge those nearing retirement not to give up on saving at such a crucial time and to consider all the options available to them.’

All statistics are from LV=’s data taken from a survey of 1,522 British adults, all aged over 50.

25 November 2011.