It’s not only small business owners who are going to have to keep on working past normal retirement age, according to the Pensions Policy Institute.
According to the Institute’s research, millions of us will still be working after our 75th birthday because we have not been making adequate financial provisions for our retirement. A whopping 45% of people aged over 50, and that includes contractors, will have to carry on working for 11 years longer than they had originally hoped in order to have a comfortable retirement.
Life expectancy has increased over the last three decades and although the government has raised the normal retirement age slightly, this in no way compensates for the fact that we are living longer.
Joanne Segars, the National Association of Pension Funds’ chief executive, said millions of Brits are in for a rude awakening when they realise they haven’t enough money to retire. People who don’t want to see their living standards fall either need to save more or work longer.
The pensions gap in the UK is the largest in Europe and Aviva says that we should be putting an extra £10,300 into our pensions each year if that gap is going to close completely. But can anybody really afford to put away £200 a week into their pension fund when some people don’t even earn that much over the entire year?
The problem is made worse by falling annuity rates. A pension fund that guaranteed a lifetime income of £15,640 at the beginning of the 1990s is worth just £5,800 a year now.
You’re never too young to start saving for your retirement! The sooner you start, the larger a pot you’ll have to draw on when you do eventually do decide to sit back and take it easy.
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Image: help a piggy-from-the-future out? by {Guerrilla Futures | Jason Tester}
