CONDEMNED TO WORK FOREVER

One in three Scots fears they will never be able to afford to retire

ONE in three Scots expects to work until the end of their lives because their pension is too small to support them. Thousands face retiring with mortgages still to be repaid or with inadequate pension pots, experts have warned.

Many Scots will get less than £10 a day for their old age from their pension pots, which means they can no longer look forward to a peaceful life of gardening and golf, say researchers.

Already more than 80,000 pensioners north of the Border are still in work, with fears that this number is set to rocket, taking jobs that young people need.

The number of Scots over retirement age but still in employment has soared by 12.5 per cent in the past year.

Research shows that baby boomers are the least prepared for retirement. They spend almost half of their income on mortgages and bills, with life savings falling as a result.

Those over 60 are just as badly off, with large numbers still paying into a mortgage while also helping out adult children and grandchildren financially.

One study of 500 Scots found that 36 per cent feel they will never be able to give up work.

Will Searle, a spokesman for charity Age Scotland, said: ‘No one should feel they have to work past the retirement age, and these

concerning figures show that everyone should be planning as best they can for retirement.

‘We know that many people worry about what their lives will hold past this age.’

Arthur Zegelman, a senior consultant at financial services company Towers Watson i n Edinburgh, said: ‘ The concept of a fixed retirement age has more or less gone from most people’s thinking.

‘The state pension age is already i ncreasing and many people are looking at a phased retirement. They don’t just stop and give up everything, they keep working.

‘If people want to choose to give up working, in this new world, they will have to save more and for longer.’

Almost two-thirds of Scots believe they will not have enough to live comfortably on in retirement, the study for financial firm BlackRock found. It follows warnings that people in middle age have an average £10,000 annual shortfall in their pension pots – enough to provide only £3,500 a year, or less than £10 a day.

Asked how much they needed to live on for a decent retirement, the average person aged over 45 put the figure at £13,930 a year.

But for close to one in five of us, a financially secure retirement is a ‘ dream’ not expected to come true.

With more ol der couples splitting up and buying new homes alone, Age Scotland Enterprises – which offers financial products f or older people – recently disclosed that almost two-thirds of Scots in their sixties still have mortgages to pay off.

Tony Stenning, head of UK retail at BlackRock, said: ‘We are all living longer, with an average person today retiring at 65 likely to l i ve for another 20 years. Clearly this good news could be a double- edged sword for many people, as it may involve having to work later in life to finance the lifestyle they wish to lead over a much longer time frame than previous generations.’

But people of this age can no longer completely rely on the state pension, it was revealed by Money Mail this week.

Only one in three workers will receive the full £148 a week next year, according to Government f i gures, 100,000 f ewer than expected across the UK over the next decade.

Generally, this will affect those who, during their working lives, opted out of receiving extra benefits such as the second state pension and were allowed to pay reduced National Insurance contributions.

Chancellor George Osborne is also considering scrapping tax relief, allowing the taxman a cut of money paid into pension pots. To make matters worse, many employers no l onger off er lucrative pension schemes.

Calum Bennie, savings expert at Scottish Friendly, said: ‘The introduction of auto-enrolment, whereby all businesses across Scotland will be required to introduce staff into a pension scheme, will mean that the level of money being put aside for retirement should rocket considerably.

‘However, the Government has to take great care that it does not further meddle with pensions unduly, as this will l ead to mistrust among consumers.’