There is no legal retirement age, and employers can no longer force their employees to retire at a particular age. It’s up to you when you decide to stop working.
But nearly three quarters (71%) of UK employees – equivalent to 23 million people – are set to work beyond their 65th birthday, according to new research1. A further two in five (37%) believe they will reach their 75th birthday before they retire.
Among those expecting to work beyond the age of 65, seven in ten (71%) cite the rising cost of living as a reason. Food prices in particular have been rising at their fastest pace for more than five years – the result of last year’s extreme weather and an increase in global import costs2.
Despite a fall in inflation over the past year, another two in three (63%) say that rising inflation eating into the value of their savings is an influential factor, while 62% say the same of poor returns on their savings.
Rising cost of everyday necessities – 71%
Rising inflation eating into the value of my savings – 63%
Poor returns on savings – 62%
Slow wage growth – 58%
Economic uncertainty caused by Brexit – 51%
The respondents could select more than one answer.
A third (32%) of those who intend to work beyond the age of 65 admit that they need to continue earning a wage because their pension savings are insufficient, rising to two in five (39%) among the age group approaching the traditional retirement age of 65 (45-54-year-olds).
This lack of planning has been exacerbated by the recent changes to the UK State Pension age, with a quarter of employees (25%) acknowledging that they can no longer rely on it and will have to work for longer to bolster their savings, up from a fifth (21%) last year.
However, not everyone views working for longer as a grim prospect: three in ten (30%) say they plan to work beyond the age of 65 because
they enjoy their job, while one in five (17%) employees say they will stay in work to continue receiving valuable employee benefits.
My pension will not be sufficient, so I need to continue earning a wage – 32%
I enjoy my job and would like to work for as long as possible – 30%
I can no longer rely on a State Pension/state benefits – 25%
I have saved for my retirement, but the cost of living is so high I will still need a wage – 21%
I get other benefits from work, for example, social interaction – 21%
In particular, income protection (17%) and life insurance (16%) are highly valued benefits for employees who are considering working beyond the age of 65, while one in ten also appreciates the support of a critical illness cover (13%) or access to an Employee Assistance Programme (10%).
It comes as little surprise that UK workers are planning to work longer as external factors like the rising cost of living and poor returns on savings exert extra pressure on employees’ finances.
1 ONS Labour market data, March 2019
2 British Retail Consortium, Shop Price Index February 2019