Despite many people in the UK having a target age they would like to retire at, nearly two in five (38%) retirees today were forced to give up work earlier than their planned retirement age, according to a new report by Aegon.
In fact, Aegon’s Golden Age of Retirement report found just half (51%) of people actually retired at the age they expected, with redundancies; ill health; and becoming physically unable to work limiting people’s planned pension contributions and reducing the value of their savings.
The publication of the Aegon report coincides with encouragement from the UK’s Chief Medical Officer, Dame Sally Davies, for individuals to remain in work beyond traditional retirement ages or get involved in community and voluntary activities in order to remain socially, physically and mentally active, all of which can be beneficial for health.
Dame Sally’s Baby Boomers: Fit for the Future report shows that more than 75% of people aged between 50 and pension age in the UK, and 12% of people who are older than that, are still in active employment. It also estimates that a third of British workers will be aged over 50 by 2020.
“People are living longer than ever and so retirement presents a real opportunity for baby boomers to be more active than ever before. For many people it is a chance to take on new challenges, it is certainly not the start of a slower pace of life it once was,” said Davies.
People in the UK currently hope to retire to some degree at aged 64. However, many individuals are choosing to work part-time for a number of years before entering full retirement to supplement their retirement income.
This comes as the government reviews state pension ages, meaning those forced to give up work early could face the possibility of a ‘double whammy’ of a longer period with no state pension to draw on and a reduced pension pot due to missing contributions.
Aegon pensions director, Steven Cameron, said that there is a great deal of uncertainty these days when it comes to retirement.
“The changing nature of work, attitudes towards retirement and greater pressures on income mean there’s no set pattern to retirement anymore,” he said.
“This is why it is crucial for the government, and the Cridland review, to allow people access to their state pension from an earlier age, for example 60, at a reduced level to make it cost-neutral,” he added.
With reduced pensions and a seemingly ever-increasing state retirement age, many people are forced to consider working well in to their 60s and beyond. This is all well and good whilst ever a person is able to do so, but it is a fact of life that many people’s health deteriorates with age and as such may not be able to carry on working.
With an ageing workforce and strict age discrimination laws many employers are turning to Group Income Protection to help them manage the workforce and provide a safety net for their employees. At Premier Choice we have many years’ experience providing tailor made solutions to employers of all sizes to help them find cost effective solutions for employee wellness.
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