Over a million UK workers believe that they will never retire, while 17.1m working adults – 44 per cent – think they will work past their state pension age, according to research from Canada Life.
The research found that the main concern UK adults have when considering working past the state pension age is being unable to enjoy their later years, a concern for 34 per cent. A third are concerned that their health will deteriorate because they must continue working, while 27 per cent need or want to work but are concerned that their health will make it difficult to do so. Almost one-quarter – 23 per cent -of people want to keep working because they enjoy the routine, while 21 per cent enjoy their job and want to keep working.
The study also found that 43 per cent of those expecting to work past their state pension age believe their pension will not be enough to fully retire. They believe that they will need to continue working and that this is a major reason for delaying retirement. The research found 22 per cent will continue to work because they are unsure how long their retirement savings will last, while 10 per cent believe they are prepared but that their current lifestyle makes retirement too expensive for them.
Canada Life technical director Andrew Tully says: “Despite over a million people thinking they will never retire, there is a considerable drop in the number of people thinking they will work beyond their state pension age. Understandably the pandemic has had a drastic impact on this, with many people reevaluating how they want to live and what they want to do in later life.
“Digging beneath the surface, there are a variety of reasons for working beyond state pension age, or not retiring at all. For some people, the social side of work would be missed, but for others, financial considerations are a key driver. As an industry, we need to find ways of encouraging better engagement in long-term financial planning as a way to ensure that people are confident that they are building sufficient savings for retirement.
”Auto-enrolment has been an unqualified success but we need to think about how we encourage greater levels of saving, perhaps by introducing auto-escalation at the point of pay reviews. For example, the employee receives a pay rise and automatically a percentage of that goes into the pension as additional savings. Consideration should also be given to extending auto-enrolment to workers who don’t currently get picked up, including low earners and the self-employed as soon as possible. This would help level up the pensions playing field.”