MILLIONS of British workers believe they will never be able to afford to retire, according to research. One employee in five is resigned to working well into old age as he or she struggles to pay bills. Of those who do think they will stop full-time work, 40 per cent reckon they will stil need a part-time job, says the report by the Association of British Insurers. Instead of looking forward to time spent with family, playing golf or travelling, it appears prosperous retirement is an impossible dream for many of Britain’s 30 million workers. As the Government has phased out the statutory retirement age of 65, theoretically there is no need to stop work. The rising age at which people receive a state pension – to between 66 and 68 – further increases the pressure to continue earning. Financial planner Craig Palfrey said: “With every passing day, the pensions crisis gets bigger. For millions of people the belief that they will struggle in retirement will unfortunately come true. “Too many people are doing too little to save for their retirements and with people living longer than ever, this situation is only being exacerbated." James Baxter, of retirement planners Tideway Investment Partners, said workers were “between a rock and a hard place”, adding: “With annuity rates, which guarantee the pension amount, plummeting and interest rates on savings at a record low, workers are facing a double whammy. People are going to have to take financial responsibility for their old age much earlier and save more.” Steve Wilkie, director at retirement specialists Responsible Equity Release, added: “Future pensioners are facing a pretty bleak retirement, at a time in their lives when they want to be enjoying the fruits of their labour. Unfortunately for many, retirement will have to be put on hold. The stark reality is that for a growing number of Britain’s older workforce, they face working well beyond retirement age.” In another move to persuade people to save for their old age, the Government yesterday announced a relaxation in the rules around its flagship low-cost pension scheme to make it easier for workers to build up their retirement pots. Pensions Minister Steve Webb said that the Government would legislate “as soon as Parliamentary time allows” to lift restrictions placed on “Nest” – the National Employment Savings Trust – which was set up as a not-for-profit option to fill gaps in the market as the automatic enrolment of workers into pension schemes is rolled out. The Work and Pensions Committee recently said the £4,500 cap on annual contributions into Nest and a ban on transfers in and out of the scheme must be scrapped “as a matter of urgency”.
Posted on: Wed, 10 Jul 2013 07:36:08 +0000
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