A report from the investment company Baring Asset Management, has warned that millions of the UK’s workers will be forced to ‘work ‘til they drop’ due to not having a big enough retirement fund.
A staggering one in ten workers admitted that they think they will have to work indefinitely because they have failed to save enough money to retire comfortably.
When they were questioned for the research, a further 11% said that they expected to still be working between the ages of 66 and 70 – a number that has doubled in just a year.
Official figures published by the Department for Work and Pensions also highlights that an estimated seven million people are not saving enough to give them a pension that they can live on.
The report shows that many workers will have to continue working for years and in some cases, up to a decade, after the age that their parents and grandparents were able to retire.
Chief Investment Officer, Marino Valensise of Barings, said simply, that people were ‘not saving enough’ and added: “With increased longevity and people not saving enough, the working population of those aged 65 and over will inevitably continue to increase.”
The future looks bleak for UK pensioners as the figures from the Department for Work and Pensions shows that a mere 15% of workers aged between 16 and 24 currently pay into a company pension.
Even in the 45 to 54 age group, just 58% of employees are contributing towards a company pension scheme.
Pensions Minister, Steve Webb warned starkly: “Young people face a very different retirement from their parents and grandparents.
“Only one in three people working in the private sector is contributing to a workplace pension. We are saving less and could face a poorer retirement as a result.”
Another report published recently highlights the impact that high inflation and low income rates will have on those who retire this year.
The Prudential’s report shows that a typical pension income of £16,600 will only be worth £6720 a year by the year 2031 – a drop of 60%.
The pension company says this is mainly due to pensioners not choosing to inflation-proof their pensions, with 80% of pensioners opting for a ‘level annuity’ meaning they receive the same monthly pension income throughout their entire retirement.
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