Flexible working could be key to helping close the pensions savings gap, says Phoenix Insights, after its analysis found 17 million people are undersaving for retirement.
Phoenix Group’s longevity think tank said many people who fall out of work early will face financial vulnerability later in life unless they can re-enter the workforce and continue to work and save.
Analysis by Standard Life, which is part of Phoenix Group, found working just one day a week for a few years after reaching retirement age could add as much as £21,000 to a retirement fund; £18,000 from fund growth due to delaying access to pension savings from 66 to 70, and £3,000 due to the additional contributions of working one day a week.
Mike Ambery, retirement savings director at Standard Life, said: “When people fall out of work their future retirement income isn’t always front of mind. But time out of employment can have a double whammy effect of no pension contributions and losing the benefit of valuable contributions from the employer.
“Improving flexible working practices so more people can remain earning and saving, whether early in their career or nearing retirement age, is a key part of addressing how we can start to address retirement income adequacy.”
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