Millions delay retirement as pensions nose-dive

UK workers are delaying retirement after seeing the value of their pension funds plummet.

Last Updated: 31 Aug 2010

A third of older workers in the UK have been forced to delay their retirement after seeing the value of pension funds and other investments dip in the recession, according to new research by retirement income specialists MGM Advantage. Apparently, around 35% of people aged over 55 who are still working said they had put off plans to retire while they waited for the value of their pension savings to recover. We suspect they may be waiting a while yet…

Not everyone is ready to shun the pipe and slippers dream – one in ten people said they were planning to boost their retirement pot by either releasing equity from their home or by moving to a smaller property. But the MGM survey found that many people are poorly prepared for retirement: one in five Britons who are within ten years of retiring have not started saving or making provision for their post-work years. Which doesn’t leave them with much time to build up that nest-egg…

Not surprisingly, this is influencing how people feel about retirement. Whereas once workers might have been looking forward to spending their twilight years taking up crown green bowls, watching Countdown and tucking into Werthers’ Originals, all funded by a generous final salary pension scheme, they’re now getting more and more nervous about it – particularly those in the 25-44 age group. And with good reason: some 44% of people who have now retired expressed regret about their financial decisions ahead of retirement, and 6% said that these regrets caused ‘real pain’ (or perhaps that’s just a spot of arthritis).

This pension panic isn’t just an issue affecting the UK’s senior citizens – it could have ramifications for the entire job market. Over a fifth of UK pensioners are now heading back to work – mainly due to financial problems, but also due to boredom. So young people, who are already being hit hardest by the rise in unemployment, are now facing extra competition for jobs from their grandparents. And even if they do get into work, they’re unlikely to have the benefit of final salary pension schemes (possibly any kind of pension scheme, in fact), or generous interest rates on their savings. So retirement is looking a lot less fun than it once did...

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