Now 10 million expect to work till they drop in pensions crisis

‘Working on is a necessity rather than a choice’

MILLIONS of people are planning to work until they die because they will not be able to afford to retire.

More than 10 million expect to have to stay at work until they are no longer physically able to do their job.

And as many as three million people will die while still in employment, according to new research.

The dream of a comfortable retirement appears to be out of reach for many Britons, despite the hike in autoenrolment pension scheme contributions coming into effect tomorrow.

Half of workers (51 per cent) will continue working at least part-time past retirement age, and 18 per cent say this will be a necessity rather than a choice.

Only a quarter expect to have completely retired by the time they are 65, according to the Scottish Widows' study.

Researchers found almost half (44 per cent) of people are not saving the recommended 12 per cent of their salary towards retirement each year.

Even though the new minimum contribution level is increasing, it is only going up to five per cent, leaving millions at risk of under-saving for their old age.

Robert Cochran, of Scottish Widows, said: “While the idea of a ‘cliff edge' retirement – when people around the age of 60 to 65 give up work once and for all – has been disappearing in recent years, our research clearly shows this is a necessity rather than a choice for too many workers.

“Auto-enrolment has been a great success in kick-starting the savings habit for millions, and the increase in minimum contributions from this month should, in the longterm, mean more people have valuable pension funds to live off as they approach later life.

“But with life expectancy expected to continue rising, it's worthwhile remembering that saving for the future doesn't need to stop at any ‘retirement age'.

“Only a third of people who expect to carry on working past retirement age think they will continue to pay into a pension and over time this number is likely to go up.”

Nearly a fifth (18 per cent) people say they will work longer than they want to because they worry about their lack of saving.

Just under a third of 25 to 54-year-olds worry they have not been saving enough in their early years, and twofifths of people fear running completely out of money in retirement. Women are more concerned than men about the cost of later life, the report showed. Just over two-fifths (43 per cent) are concerned they will run out of money during retirement, while only a third of men feel this way.

Others worry about facing potential shortfalls due to policy changes, with four in ten citing concerns about changes to the state pension.