Workers 'need bigger pension pots'
Published on 25 April 2012 12:30 PM
Around 50% of older workers might have to work more than a decade beyond their state pension age to make sure they can have a reasonable income during retirement, according to a report.
The Pensions Policy Institute (PPI) research looked at how long current over 50s in England would need to work for to meet target levels of retirement income.
Results showed that 45% of those between 50 and the retirement age will have to work an extra 11 years to meet retirement targets - defined by PPI as 50% to 80% of gross working life income.
A further 5% will need to work for at least another six years if they want to have a comfortable retirement, according to the research.
The study, called Retirement Income and Assets: the implications for retirement income of Government policies to extend working lives, has been published ahead of the auto-enrolment pensions overhaul being introduced later this year.
Commenting on the PPI's report, Michelle Mitchell, Charity Director General of Age UK said: 'These figures show that the traditional pattern of retiring and living comfortably on a pension earned over many years of working has broken down.
'Lower annuity returns and other factors mean that more and more people will have to work past their state pension age - and often for many years - if they are to have enough money to live comfortably.
'The government must work to encourage employers to hire and retain older workers, and to provide training for those who need it if we are to avoid creating future generations of people in later life struggling to make ends meet.'
Copyright Press Association 2012