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24 Feb 2016

One in four Brits approaching retirement can´t afford to stop working

A new survey has found that over half of UK workers approaching retirement are considering staying in work, while a quarter have already made the decision that they cannot yet afford to retire, This Is Money reports.

According to the Class of 2016 report by Prudential, nearly a third of those questioned said that their pensions and savings were unlikely to give them a comfortable life during their retirement years. And with people expecting to be retired for around 20 years before they die, this is clearly an unappealing prospect.

Of those who have decided to stay in work beyond their pension age, the largest number (29%) plan to look for a new position, while 27% are going to stay where they are but reduce their hours, and 11% are going to continue working full-time.

Interestingly, 7% are thinking of starting their own business and 13% would like to make an income from their hobby.

There were some other reasons for staying in work that did not necessarily relate to money. For example, just over half (51%) would rather work to keep their minds and bodies active, while 41% enjoyed their work too much to stop, and 34% simply didn´t feel ready to retire. In fact, 16% said they would like to never retire at all!

The current state pension age is 65 for men, which will rise to 66 by October 2020, and the pension age for women will reach 65 by November 2018, matching the men´s at 66 by October 2020.

Commenting on the finding´s, Prudential´s retirement income expert Stan Russell noted that “it´s understandable why [this year´s retirees] now see giving up work as a gradual process rather than a one-off event.”

“However, for everyone who can choose their retirement date there are some who have no choice because they physically can´t continue at work, and others whose financial situation forces them to stay on,” he added.

Russell advised that in order to have “the greatest degree of choice of when to give up work”, it was crucial to start saving “as much money as possible as early as possible during their careers.´

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