Millions forced to work after 70
MILLIONS of Britons will be forced to work beyond the age of 70, an authoritative report warned yesterday.
Soaring household bills and inadequate pensions will leave many with no choice but to continue working.
Up to 40 per cent of those in work now expect they will have to keep their jobs beyond the new state retirement age of 66, announced by the Government last month.
But if they had the choice most would like to retire at 62. The study, by pensions giant Friends Provident, also found that almost a third of workers have no savings for old age.
Pensions expert Ros Altmann said: “We’ve had years to prepare for this demographic timebomb, but unfortunately over the last decade or more, the previous Government systematically undermined pensions saving and failed to prepare us properly for what’s coming."
Public sector workers have seen little or no change in their generous pension provision while the rest of the workforce faces the prospect of struggling to survive on just about the lowest state pension in the developed world. Nearly half will need to claim means-tested handouts to avoid penury.”
Last month Chancellor George Osborne announced the raising of the state pension age for men and women to 66 by 2020 to help reduce public debt and reflect that people were living longer.
Tellingly, he warned that it would have to rise even higher in future, which could see many Britons having to work until at least 70 before they get their state pension.
Official figures suggest one in eight workers is over the current retirement age of 60 for women and 65 for men – that’s 1.5 million people.
The figure has gone up by 78,000 in the past year. This is the biggest increase among all age groups in data provided by the Office for National Statistics.
The number remaining in work is likely to increase further in the next decade as bills for energy, food and clothes rise.
The pensions crisis, which has seen hundreds of generous final-salary schemes shut, will also start to hit more people as they reach retirement age.
The UK’s 200 largest pension schemes, including final-salary funds, had a collective deficit of £69billion at the end of last month.
Frances Kay, editor of the Good Non-Retirement Guide and a member of the expert panel that produced the Friends Provident report, said: “By 2020, I think people are not going to be retiring as they traditionally did.
“The word ‘retirement’ will simply be re-invented or interpreted differently. People aged 65-75 will continue to work in some capacity.” Campaigners have highlighted the “pension apartheid” which exists between private and public sector workers.
Six million teachers, police and civil servants enjoy generous pension schemes that are now largely a thing of the past in the private sector – although private sector workers still have to pay for the public sector perks through their taxes.
Many public sector staff have a guaranteed pension, index-linked for life, based on two thirds of the salary they earn on the day they retire. Many can also expect to retire at 60, or earlier
The system of funding – and the last Government’s refusal to publish clear figures – means the exact size of taxpayers’ liability is unclear. But experts say the total bill is likely to be more than £1trillion.
However, in a Government report published last month, former Labour Cabinet minister Lord Hutton warned millions of public sector workers to expect to pay more into their pensions and be forced to retire later.
Yesterday’s report, Visions of Britain 2020: Ageing and Retirement, polled 1,200 individuals working in the private sector across the UK.
It also found varied expectations over the length of working life across the country, with people in Nottingham expecting to retire the latest at 68.4.
Workers in Leeds are next at 66.8 before the Scots at an average age of 66.4.
