More than a third forced to delay retirement

A survey by pension advisers MGM Advantage has revealed that around 35% of people over 55 who are still working said they would put off plans to retire.

Meanwhile, a further 23% of people in this age group are expecting to work past the state pension age of 65, while a third (32%) confessed to not being prepared for retirement.

However, almost half (48%) said the recession had not affected their plans for retirement while 13% said they were currently saving more to offset losses.

Craig Fazzini-Jones, director at MGM Advantage, comments: “One of the most worrying consequences of the economic turmoil is the knock-on effect for those approaching retirement.”

“Millions of people nearing the end of their working life have been forced to slog it out for a few more years, to see if their pension pots will make any kind of recovery. For many, it is not a choice, but a necessity,” adds Mr Fazzini-Jones.

In the meantime, a separate survey of over 4,000 people by Aon Consulting found that 18% of workers are increasing contributions amid the recession.

Helen Dowsey, of Aon Consulting, said: “These findings are encouraging news as they show that for a significant number of people, saving for a pension is sacrosanct, despite the recession.”

In a recent interview with the BBC, David Norgrove, chairman of the Pensions Regulator, said he believes the retirement age could exceed 68 years of age.

People are going to have to work longer, partly because we’re not going, as a nation, to save as much for retirement as we did in the past,” explains Mr Norgrove.

In a bid to encourage Brits to save towards a pension, the Government is to introduce Personal Accounts in 2012 which will be a state-sponsored pension arrangement.

Employees will be enrolled automatically, contributing 4% of their salary. The employer will pay 3% and a further 1% will come from tax relief.

Discuss this in the Finance Markets forums

Story link: More than a third forced to delay retirement