Almost three out of 10 UK workers said they will have to work beyond their planned retirement ages – in some cases for up to nine more years.
They have had to rethink their retirement following heavy falls in defined contribution (DC) pension fund assets during the current downturn, according to research by insurance company Aon. It said that since the slump began in September 2007, the combined value of the UK’s DC savings had fallen 12%.
Aon’s recent e-mail survey of 4,026 UK employees found that just over 30% of respondents said they would definitely delay their retirement, while 38% of female respondents and 24.55% of males said they weren’t sure. Almost 45% of males, and 31.4% of females, polled said the economic downturn will not delay their retirement.
When asked how much longer they anticipated having to work, one in five of those who said they would have to delay their retirement said an extra six to nine years. And 39.03% of men and 37.57% of women said they would work an extra three to six years.
Commenting, Aon Consulting senior consultant Richard Strachan said: “There has to be a shift in the thinking that we have to retire at a certain preconceived age.”
He added: “As pension savings become more of a hot topic, employers need to ensure, as part of both their ongoing duty of care and an ever-increasing focus on [pension] plan governance, that they highlight to members how their plans are performing, and why and where they can access up-to-date information.”
Respondents aged 34 to 44 were the most likely to believe they would have to work longer than planned to accrue enough pension income to retire. Some 32.19% of that age group said they would have to work longer than planned, compared to 31.71% of the 18 to 42, and 24.46 of the 18 to 42 and 55 to 64 age groups respectively.
More than 67% of the 35 to 44 age group said they expected to work an extra three to nine years longer than they had planned.
Aon said delayed retirement will have ramifications for employers – they will have to pay pension contributions for a longer period and higher premiums for certain benefits, such as life assurance and health cover.