There is a savings crisis in the UK and it is estimated by Canada Life, the insurance company, that about 10 million British workers will be forced into taking later retirement. It’s also a worsening picture, with the number of people expecting to have to work longer increasing yearly.
What do the numbers say?
Some 73% of respondents expect to work past 65 – an increase of 6% from 2016 and 12% from 2015, making these figures the highest ever. Looking at the younger age group, the overall ‘delayed retirement’ figure was even higher, with 84% expecting to work past 65.
In addition, 37% of those who said they expected to work past 65 felt it was likely they could be 70 before they stop work, and 10% said that the age when they could ‘fully retire’ could scarily be as much as 85. These are worrying figures, which clearly underline the importance of good financial planning, something which we and an Independent Financial Adviser can help you with.
Why are people planning to work longer?
The survey found that 31% of respondents (approximately 10 million individuals) said they would have to delay their planned retirement due to their savings not generating as much interest as they hoped they would, over the last eight years of low rates. That’s up from 23% who had the same concern in 2016 – an increase of 3 million people.
Another key factor is a lack of proper pension planning, and 36% cited this as a key reason for having to work longer, as their pensions just won’t pay enough to give them a reasonable income. In fact, Canada Life Marketing Director Paul Avis commented, “Insufficient pension savings are a key cause, with recent reforms prompting many to realise they will need to continue earning for longer to fund a decent retirement.”
It is important that you start saving for retirement early and as a contractor you can pay into a pension in irregular lump sums.
Please talk to us if you want help setting up a pension scheme as we work with an excellent Independent Financial Adviser – see our Trusted Advisers page.