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Category: Pensions Date: 2/15/2012
A new 'retirement reality' is said to have hit many potential retirees after research revealed one in ten people who had planned to give up work in 2012 will put off drawing their pension for the time being.
According to Prudential, at least 50,000 people will have their retirement dreams dashed this year alone as the rising cost of living and falling pension payouts take their toll.
Of those who have decided to defer their retirement, a third (32 per cent) claim they simply do not want to retire yet.
However, two thirds (68 per cent) claim they have shelved their retirement plans because they can't afford to give up work.
Vince Smith-Hughes, Prudential's retirement income expert, said it is undeniable that there is a new retirement reality for a significant number of retirees.
"People are living longer, and for many, the very real prospect of a thirty year retirement is either unpalatable or unaffordable, hence the decision by many to continue to work.
"Retirement is also becoming a more opaque concept, with many people working part-time, either out of necessity or desire."
The report comes a day after it was warned the cost of living facing the older generation still remains 'dreadfully high', despite the recent drop in inflation.
Saga said 'disastrous' inflation levels continue to 'steal' the purchasing power of older people, with the average over 50s RPI inflation figure still over 4.5%.
In combination with the latest announcement from the Bank of England to extend quantitative easing (QE) by a further £50 billion, Saga said the high inflation figure represents 'another bitter blow for pensioners'.
"QE was originally supposed to be a policy to fight 'deflation', yet in reality, it has turned out to be a policy that has created high inflation and whittled away older people's purchasing power, while at the same time reducing the value of their pensions," commented Dr Ros Altmann, director general of Saga.
"Yes, we welcome the fall in the annual cost of living, but these inflation figures are still dreadfully high.
"This is why more QE seems like a panic measure. It's a massive risk which will make pensioners permanently poorer."
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