One in five British workers believe that they will need to keep working into their old age in order to live comfortable, a new report claims. Workers are losing confidence in their ability to retire, fearing a lack of financial stability in their old age.
A new study from HSBC that highlights the worrying statistics also shows that over a third of British workers are ‘not preparing adequately’ for their retirement, with savings accounts and investments largely ignored by many younger workers.
A third of all workers have no form of retirement savings, and many have extensive debts that could prevent them from ever retiring. The report calls the current labour market the ‘Age of the Unretired’ and notes that concern over retirement is growing.
Many in government have echoed the report’s conclusions. Steve Webb, the minister of pensions, noted that while reforms to the pension system could soften the pain of planning for retirement for many workers, the current generation would likely need to work longer than their predecessors.
Mr Webb noted that it’s important for people to begin planning for their retirement as early as possible, instead of waiting until their career was coming to an end when the common ‘panic at 50’ tactic of last-minute retirement planning often emerges.
The report from HSBC shows that the UK has worse retirement saving habits than many other developed countries. British workers, on average, save enough to keep them financially afloat for just a third of their retirement.
In other countries, the gap between lifetime earnings and retirement savings isn’t so dramatic. Workers in Mexico and China save enough for half of their retirement, and United States-based workers save enough for two thirds of their retirement years.
While many workers will need to continue generating income during retirement, the drive to continue working is fairly low. Just two percent of workers plan to find a job during their retirement, and just seven percent plan to start a new business.Read more
While a reasonable number of Britons are returning to work, employment figures indicate that the UK job market is still operating at pre-recession levels. Over 2.51 million Britons were still out of work, as of April, new figures from the Office for National Statistics reveal.
Over 24,000 people entered the job market in the three months to April, gaining a foothold in a growing market for workers in the UK. Despite the job growth, official unemployment figures pointed to an employment rate that hasn’t changed from its 7.8 percent reading – a figure that’s identical to early 2013 levels.
What’s more worrying than the flat unemployment figure, however, is the growing number of people aged over 65 that continue to work. Over one million people over the age of 65 still work in the UK – a figure that’s the highest on record. The Office for National Statistics began recording age-related job statistics in the early 1970s.
Other issues for the UK economy include a sluggish increase in remuneration, with the average worker’s salary increasing at a rate that beat inflation. CPA data shows that prices are increasing by approximately 2.4 percent per year, while salaries are up just 1.3 percent per year, as many workers opt to defer their bonuses.
The data brings to light an issue that could continue to affect the economy: as more professionals choose to stay in their roles well into their sixties, the number of new opportunities is decreasing relative to overall job growth. Many of the people most hurt by the change in employment demographics are recent university graduates.
In the last twenty years, the number of over-65s working has more than doubled. A large number of these workers will need to continue working until they are 70 years old, according to pensions minister Steve Webb.Read more
New figures being released by mortgage lenders indicate that the number of pensioners seeking equity release is rising significantly due to the insufficiency in their pensions. According to Just Retirement, retirees seeking this type of mortgage are from a broad scope of retired Britons who are looking to subsidize their paltry incomes.Read more
Just as figures were being released by the ONS showing that Britons are living longer, Key Retirement Solutions released figures of their own showing that at least half of people over the age of 65 living in the UK aren’t aware of just how expensive it is for long-term care in their old age. Many believe that there is a cap on the cost of long-term care set at £20,000 and with the rising cost of care that is not nearly enough.Read more
Within the last year there have been many changes to pensions, public and private, but the biggest hit to date has been the new state flat rate pension which is currently under fire. Experts are stating that the average worker who could have expected a full pension upon retirement will now get a smaller amount.Read more
Pensions October 20, 2011
Recent reports are showing that people in the UK are just not planning appropriately or early enough for retirement. Three different reports conducted by different agencies are showing that people are not planning for their retirement until well into their 50’s and 60’s.Read more
Personal Finance September 4, 2011
If the boomers thought they had it bad trying to deal with the ever changing climate for pensions, the X Factor generation is in for a rude awakening. This group of people is often criticised as having no interest further than the latest football acquisition or which judge is in and which judge is out on the ever popular reality television show, the X Factor.Read more
Within the past year, the number of people being forced by inflation to delay retirement has at least doubled while many of these workers find they will need to work well into their late 60’s and maybe even beyond that. Unfortunately, many workers simply have no idea when they will be able to draw their pensions but certainly not as early as they had planned.Read more