Number of people retiring after age 70 doubles since 2010

A third of the British workforce expects to retire after their 70th birthday as older-age debt levels soar

Kate Hughes
Money Editor
Wednesday 21 March 2018 11:57 GMT
Working later in life is fast becoming the norm
Working later in life is fast becoming the norm (Getty)

The number of employees expecting to work past the age of 70 has nearly doubled in seven years according to a major new study, which found worrying signs of worse health and higher stress levels among those who do.

Data from Willis Towers Watson, found almost a third of workers now expects to be employed after their 70th birthday, up from only 17 per cent in 2010.

The current state pension age is 65 for men born before 6 December 1953 and between 60 and 65 for women born between 6 April 1950 and 5 December 1953 – a rapid escalation that has resulted in dramatically different financial circumstances for women of very similar ages.

From next year, the state retirement age will increase for both to reach 66 by late 2020 and further changes are expected to bring the age up to 67 between 2026 and 2028.

The research shows that among employees under 30 – probably retiring in the 2040s and 2050s – 44 per cent expect to be working into their 70s, compared with 20 per cent of those over 50 and 29 per cent of those in their 40s.

Seventy percent of employees also think their generation is likely to be much worse off in retirement than their parents’ generation.

The impact of this ageing workforce on other aspects of employees’ lives is considerable, with those expecting to work longer feeling more stressed, less healthy and less engaged with their jobs.

Of those who expect to retire at 70 or over, 29 per cent are highly stressed and 34 per cent are in poor health. Among those expecting to retire before they hit 65, the figures fall to 10 per cent and 18 per cent respectively.

“The fact that people are retiring later is not bad news in itself, as many studies have revealed numerous benefits associated with working longer,” David Bird, head of proposition development at LifeSight, Willis Towers Watson’s UK DC Master Trust said.

“But it’s worrying that many who are expecting to retire later are not doing so out of choice and are therefore more stressed and less engaged with their job.

“This is not just problematic for individuals, but also for businesses. Employers need to harness their experienced talent in the right way to create a productive and happy workforce.”

The Retirement Expectations report, seen exclusively by The Independent, found that almost half of those currently working plan to retire from their main job, but keep working for some time before they fully retire.

“Businesses need to think about whether their benefit programmes are fit to support an older workforce and provide a productive transition into retirement.

“Creating an environment where workers feel comfortable discussing their needs and options as they near retirement age, such as flexible working arrangements and upskilling, is important,” Bird said.

“Giving employees access to the tools that enable them to effectively plan for their retirement is also key. This will not only help ensure that people can retire when they want, but that they are productive employees for as long as they choose to be part of the workforce.”

The figures come at the same time as news of major, and growing, indebtedness among the over 65s.

Credit card and loan debt is preventing more than one in five of those who have retired from enjoying it as they struggle to maintain their standard of living, warns Key Retirement.

Since 2016, the levels of both secured and unsecured debt held by the over-65s has increased from £70bn to an estimated £85bn in just two years, blamed on pension shortfalls, the launch of pensions freedoms and unexpected bills like car repairs.

One in seven retired Britons says they are now relying on credit cards to boost their income.

Secured debt including mortgages accounts for £73bn of that £85bn total, and almost 40 per cent of 65-74 year olds with an interest only mortgage will struggle when the capital repayment is due.

Elsewhere, a quarter of the over 70s are juggling three or more credit cards and one in ten have had a balance they haven’t cleared for more than a year.

Alvin Hall, an independent financial specialist, said: “A comfortable stress-free retirement is what we all want but debt is increasingly a silent source of worry for too many retirees.

“There’s a saying from my childhood I tell those who feel trapped by debt: We can’t change the past but we can change our future. Breaking through what’s created worry and understanding the problem is the only way to move forward.”

“The issue of debt in retirement isn’t discussed as openly as it should be. However not only is it a problem, it’s a growing one,” Dean Mirfin, chief product officer at Key Retirement added.

“Pensioners worried about debt are not alone. We are all living longer and that means our savings have to last longer and we have to plan more carefully. Helping out family can also rapidly cut retirement funds while pension freedoms make it easier to access cash.”

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