The latest LV= Working Late Index suggests that 6.1m people in the UK expect to carry on working past 65, up from 4.5m in 2010. The survey also found that 4.3m who had already retired had subsequently gone back to work.
The LV= survey confirms a rising expectation of working beyond 65. This is not surprising, given plans to increase the state pension age (SPA) from 65 to 66 in 2020 and to 67 or 68 after that. At the same time, the government has abolished the default retirement age, so there is no obligation for those who want to carry on working to call it a day.
Earlier this week the International Longevity Centre produced a report on ‘gradual retirement’, suggesting that many people were happy to carry on working, but might prefer to switch to part-time work or become self-employed. It found that 46% of those surveyed would consider delaying their retirement if their employer offered greater support for reducing their working hours, or flexible working arrangements.
Reasons to return
The latest LV= report found a number of reasons why older workers who had already retired opted to go back to work. The main one, surprisingly, was not to do with money, but because they ‘missed being part of the working environment’ (32%). Money was a key motive for 30%, however, with 20% saying their personal and/or state pension wasn’t enough to support them in their retirement.
Commenting on the 2011 survey, LV= Head of Pensions, Ray Chinn, 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 that a significant number of over-50s expect to work many years past the state retirement age, and we’re likely to see this increase further.’
A further finding from the LV= survey was that only 14% of over-50s intent to take professional advice about their retirement. Emphasising the important of retirement planning, Mr Chinn said: ‘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, from releasing the equity in their home to looking at more flexible or different types of pensions and annuities. For instance, if people are delaying retirement they are more likely to qualify for an enhanced annuity when they eventually retire, which makes a significant difference to the income they will receive for the rest of their life. It’s essential that people seek professional advice about their retirement.’