Rock bottom interest rates destroy pension pots as £10m forced to delay retirement past 65

PensionersGETTY

A record 10m Brits are being forced to work past 65 by the saving crisis

The savings crisis is forcing an incredible 10million Britons to delay their retirement as rock bottom interest rates destroy their pension pots. 

Almost three quarters expect to work past the traditional retirement age of 65, while more than a third expect to carry on beyond 70, according to new research from Canada Life Group Insurance. 

Rock bottom interest rates have destroy many savers pension pots

A shocking one in 10 expect to be working until 85

One in 10 believe they may have to carry on working until age 85, with some fearing they can never afford to retire at all. 

However, more than half fear they will be unable to carry on working into later life because of health problems. 

Older workers are particularly concerned, often because they have already suffered bouts of ill-health such as cancer, stroke or diabetes. 

The positive news is that one in three enjoys their job and would like to continue working for as long as possible. 

Retirees are sleepwalking into a life-expectancy time bomb

Director Steven Cameron

The research confirms how eight years of rock-bottom interest rates has taken its toll on the savings of UK workers. 

Near zero Canada Life marketing director Paul Avis said savers have suffered from paltry returns since interest rates were cut to 0.5 per cent in March 2009, forcing many to work longer than they wanted. 

“As inflation continues to rise this problem will only become more pronounced. Insufficient pension savings are another key cause.” 

 Avis called on more companies to support older workers and consider offering income protection and critical illness cover to help employees cope with ill-health. 

Many people are failing to save enough because they underestimate how many years they will spend in retirement, insurer Aegon says. 

Official figures show men aged 65 today can expect to live to 83 and women to 86, but Aegon’s research shows that many could live for a lot longer than that. 

Men have a one in four chance of living to 95, while for women the likelihood is one in three. 

RetirementGETTY

Rock bottom interest rates have destroy many savers pension pots

Aegon pensions director Steven Cameron said retirement planning is so hard because nobody knows how long they will live: “National statistics can never be more than a blunt tool for estimating individual life expectancy.” 

A man with a £250,000 pension pot would need to save an extra £66,000 more to cover a further seven years in retirement, if he wanted to maintain a sustainable income of £12,400 every year. 

Cameron added: “Retirees are sleepwalking into a life-expectancy time bomb.” 

One in seven people aged 55-65 are approaching retirement without any private or workplace pension at all, Aegon’s figures show. 

It means that more than 1.2million people are likely to retire with little or nothing to supplement the state pension Work forever Younger people, so-called “Millennials”, face a million pound pension shock, according to separate research from international advisory firm Mazars. 

PensionsGETTY

A shocking one in 10 expect to be working until 85

One in three aged between 17 and 35 now believe that they will never be able to give up work completely. 

Head of private client services Liz Ritchie said Millennials who still have dreams of retiring at 63 will need £1million to enjoy a comfortable retirement. 

“This is daunting and makes it all the more important to seek financial advice and start saving for the future.”

Daily Express :: Personal Finance Feed


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