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Retirement saving remains crucial, Britons warned

Retirement saving remains crucial, Britons warned

Category: Savings

Updated: 23/06/2010
First Published: 23/06/2010

This article was correct at the time of publication. It is now over 6 months old so the content may be out of date.
Britons have been urged to sidestep having to work well into their seventies by making an effort to start saving now.

The coalition Government delivered its first Budget yesterday, and confirmed it would be reviewing the default retirement age, with all signs pointing to it being scrapped.

Friends Provident has said that while the decision will be music to the ears of many, a significant number of older employees may not actually be fit enough to work into their old age.

These people have been urged to start building up savings provisions as soon as possible.

The number of workers aged 55 or more is expected to climb significantly over the next decade, from 5.14 million to 7.16 million in 2020.

And while research shows that almost half (48%) of workers would welcome either full or part-time employment beyond the statutory retirement age, they have been warned to think twice before relying on a longer career to fund their retirement.

"The concern is that by abolishing the default retirement age, we could be opening up a whole new can of worms," said Martin Palmer, head of pensions marketing at Friends Provident.

"People need to be aware of the reality of working longer. As a nation we should start seeing retirement as a process in our lives and not a one-off event.

"We need to provide the right savings options to help enable this and help employers foster a suitable savings culture to encourage people to start investing in their future."

From 2012, an auto-enrolment scheme will be introduced that will see workers that are not part of a company pension scheme automatically join a government pension programme.

Workers will be able to leave the scheme, but will have to opt-out, rather than opt-in as is currently the case with company pensions.

For those looking to supplement their pension income with savings, top rates include 2.70% from Birmingham Midshires, and 2.75% which can be gleaned from ISA offerings from both Santander and Nationwide BS.

Find the best savings rates for you - Compare savings accounts

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