Work until you drop

Do you expect to retire and live comfortably? Many people in Britain do not. Research from Scottish Widows shows that while higher workplace pension contributions will help narrow the gap between retirement savings, many need to be doing a lot more to ensure a comfortable retirement. 44% of people are not saving the recommended 12% of their salary towards retirement each year.

As a result, many will have to work beyond retirement age. More than half (51%) of Brits now expect to continue working at least part-time past retirement age, and a fifth (18%) say that working beyond the age of 65 will be a necessity rather than a choice. Only a quarter (24%) expect to have completely retired by the time they’re 65

This means that More than three million people expect to work until they die, with another 10 million saying they will work until they are physically unable to do so.

Young people, in particular, are pessimistic about their retirement prospects – only one in 20 (5%) of 18-24-year-olds expecting to retire by the age of 65, and 11% of 25-34-year-olds (11%).

Nearly one in five (18%) people say they’ll work longer than they want to because they worry about their level of saving. Just under a third (32%) of 25– 54-year-olds worry they haven’t been saving enough in their early years, and two-fifths (39%) of people fear running completely out of money in retirement.

The gender pay gap extends into retirement. Women tend to have smaller pensions because they are more likely to have spent time out of the workplace caring for children or relatives and tend to be paid less. As a result, women are more concerned than men about the cost of later life. Just over two-fifths (43%) of women are concerned that they’ll run out of money during retirement, while only a third (34%) of men feel this way.

The old idea that when people around the age of 60 to 65 they gave up work once and from the Scottish Widows clearly shows that working after age 65 is a necessity rather than a choice for too many workers.

One of the good things coming out of Britain is that they instituted an auto-enrolment program for retirement which has been a great success in kick-starting the savings habit for millions. Britain is also increasing the minimum contribution and this should, in the long-term, mean that more people have valuable pension funds to live off as they approach later life.

Life expectancy continues to rise, and as many work past “retirement age” should still contribute to their pension savings. Today only a third of people who expect to carry on working past retirement age think they will continue to pay into a pension but over time this number is likely to go up.