20.08.13

Increasing Numbers of Workers Believe They Will Never Retire

More than five million people in the UK may never be able to retire because of financial concerns, new research has found.

In a survey of 2,000 people aged 18 to 65 and over, 14 per cent said they would continue working for as long as they were able and had no plans to ever retire. If representative of the population, this would equate to 5.1 million people.

The survey, carried out annually by Barings Asset Management, suggested an upward trend in the number of people who intend to carry on working indefinitely. In 2012 the figure was 12 per cent and in 2011, just 10 per cent. The 14 per cent figure for 2013 was the highest recorded since the research began in 2008. On average, workers currently expect to retire at 64, up from 62 in 2009. Those aged 65 and over and still working said they did not expect to retire until 71.

Marino Valensise, Barings’ Chief Investment Officer, “It is clear that uncertainty is increasing for many people around retirement plans, with more people unable to say exactly when they plan to retire and the average age continuing to rise.

“Significant numbers of people nearing traditional retirement age reported they did not know when they will be able to retire and the worry is that a lack of sufficient financial planning and pension provision combined with increased longevity is having a real impact on a large proportion of the population.”

The report comes in the same month that the government released figures on the opt out rates from automatic enrolment – introduced in October 2012 to encourage more people to save for retirement.

Despite more than one million workers now enrolled in a workplace pension scheme, there are still millions approaching retirement with little or no pension savings.

Just over a third of people surveyed said they did not have a pension, a fact that Barings described as ‘alarming’: “The fact that so many people say they do not have a pension, including relatively affluent people and those in the 55-64 age segment, underscores the need to focus on effective retirement planning.”

“We are alarmed that so many people who should have proper plans in place do not, and urge everyone to better understand the benefits that they can get from planning ahead and starting early”.