Future retirees plan to work until past state pension age, new research from Standard Life has revealed, with a shift from health and wellbeing to financial security as the biggest influence on their decision.
According to its Retirement Voice study, those currently aged between 45 and 64 say they would like to retire at 68 – two years later than the current state pension age.
Standard Life said this was likely due to the desire to have the time to build a solid pension pot to fund the duration of their retirement, as more than two in five (44%) said financial security has the biggest influence on when they’ll retire. This comes ahead of health and wellbeing (41%) and being happy to stop working (30%).
The research found that people are planning to retire at a much later age than those who currently retired. On average, current retirees stopped work at the age of 61. Health and wellbeing was the biggest driver (35%) for current retirees, followed by feeling happy to stop working (30%). Less than a fifth (18%) cited being financially secure as the reason they retired.
Dean Butler, managing director for customer at Standard Life, said: “People are expecting to retire later than their predecessors, allowing further time to build up their financial security to last throughout their retirement. Of course, it’s yet to be seen whether the expectation of a later retirement will become a reality, but this does illustrate a real shift in mindset for people considering their plans.
“With people having to take greater responsibility to fund their retirement combined with levels of outright home ownership at the point of retirement decreasing, it’s no surprise that more people than before are considering working beyond the state retirement age in the hope of securing a stable financial position when they eventually retire.”
Recent research from think tank Phoenix Insights calculates that if everyone worked until they were 68 and saved 12% of their earnings, more would be on track to reach the retirement income they expect.
Butler added: “However, both saving more and working later in life will not be conceivable for everyone, and so it’s crucial that people engage with their finances as early as possible, in order to make a realistic plan for the future and be as prepared as they can be for retirement when the time comes.”
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