Eight million workers without enough money to retire

Eight million workers without enough money to retire

Half of all UK workers aged 40-64 - nearly eight million people - do not expect to have enough money to stop work and retire when they reach their state pension age.

According to a survey by YouGov for charity Age UK, which polled 2,112 working adults nationwide, a third of the respondents expect to be working the same hours in their current job in their late 60s.

A quarter of the individuals expect to be working fewer hours in their current job, and just over a fifth do not expect to be working in their current job at all by retirement.

Only 17 per cent of those who expect to stop working said that this is because they would be financially secure enough to give up their job.

The government announced in July that the state pension age increase should be brought forward to 68 between 2037 and 2039, due to increases in life expectancy.

Under the current law, the state pension age is due to increase to 68 between 2044 and 2046.

The change to the state pension age will leave 7.6 million people £10,000 worse off, according to analysis by the House of Commons Library.

Facing these results, Age UK is calling for government action to help people plan for later life by offering a “career MOT” at the age of 50, so that people have time to make plans and put them into action in order to create the smoothest possible transition to retiring.

This is a similar proposal to the one made by John Cridland in its state pension age review, published in March. One of his recommendations was for a ‘Mid-Life MOT’ in people’s late 50s and early 60s.

Age UK, however, believe that the intervention should take place earlier – at age 50. This would allow people to adjust their future working plans, for example by re-training, so they have time to sort out their pension.

Having this review appealed to around half of those surveyed, increasing to 60 per cent for those aged 40-44, Age UK said.

In a policy paper, the charity gives some suggestions on how the government could introduce this evaluation, such as appointing the National Careers Service to conduct this task, or create models led by employers or pension schemes.

Age UK also suggests that the government should build a coalition to develop the model of a “MOT at 50”, which should be linked closely to the Fuller Working Lives strategy – created to promote the benefits of remaining in work for longer.

The charity also asks the government to ensure that the pensions dashboard is built with the delivery of the “MOT at 50” intervention in mind.

This will facilitate opportunities to nudge people towards increasing pension saving later on, it said.

According to William Burrows, retirement director at Better Retirement, Age UK’s message is not new.

He said: “I am optimistic that pensions are getting higher up people’s to do list and perhaps it will become a new social norm to review pensions more often, in the same way that other important financial matters such as insurance and utility bills are reviewed.”