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Pension problems see retirement age climb higher

Pension problems see retirement age climb higher

Category: Pensions

Updated: 05/10/2012
First Published: 17/02/2012

This article was correct at the time of publication. It is now over 6 months old so the content may be out of date.

People are working later into life with more men now not retiring until they have almost reached the state pension age of 65, official data has revealed.

According to the Office for National Statistics (ONS), the average age at which men give up work to take their pension increased from 63.8 years in 2004 to 64.6 years in 2010.

Over the same period, the working lives of women extended by an even longer period of one year and one month, rising from 61.2 years to 62.3 years.

The ONS also published figures highlighting how important the decision to raise the state pension age (SPA) will prove in terms of making the system sustainable.

According to the data, there were 3.2 people of working age supporting each person of SPA and over in the UK in 2010, and without any changes to SPA, this 'old age support ratio' would drop to 2.0 by 2051.

However, with the SPA already beginning to increase for women and SPA for both sexes set to rise to 68 by 2046, the ONS projects the ratio will fall less, to 2.9 by 2051.

"The figures confirm the wide spread belief that people are indeed retiring later, and we expect this to rise as state pension age moves upwards," said Mike Morrison, head of pensions development at AXA Wealth.

"As the time spent in retirement increases proportionately, the need to save and invest for this period becomes ever more important."

The research has been published in the same week that Prudential claimed a new 'retirement reality' had hit many potential retirees.

Its own survey 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.

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