Savers can boost their pension by putting off retirement for two years says campaigner

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Savers can boost their pension by putting off retirement for two years says campaigner

Lifetime news

Posted on: 18/06/2014

By delaying retirement for two years your pension pot could be boosted by 25%.

So says pension campaigner Dr Ros Altmann CBE.

In an interview with the Daily Express, Dr Altmann said that by staying in full-time work for two years and then cutting back and taking a part-time job for three years, Britain’s workers could increase a £100,000 retirement pot by £23,865.

Dr Altmann spoke of a savings ‘revolution’ which would make millions of Britons better off in a retirement which would still last many more years than in previous generations.

It is hoped that changes in April’s Budget will provide a springboard for vital improvements in the pension industry – and Dr Altmann says just a fifth of workers are confident they have enough savings to pay their bills in old age.

However, 70 per cent would be happy to remain at work to increase their retirement pot.
Workers would then have extra time to meet expenses like mortgages and their funds would accrue more interest.

Dr Altmann said: “As the proportion of people’s lives spent working has fallen so much, the failure to move retirement thinking to match developments in health and life expectancy has left pension planning dangerously out of date.

“The retirement of the future will be one where people cut down work gradually and work part-time before finally stopping. They may keep working full-time until their early or mid-60s, but then start to cut back.”

His report, written in partnership with financial services provider MetLife, shows that in the 1950s the average employee would work for 50 years from 15 to 65 and have five to 10 years in retirement.

Since then life expectancy has increased to around 86 – and earlier retirement has become more common.

The current coalition government has linked retirement age to life expectancy, so that those now in their early 20s will have to wait until they are at least 70 before they can collect their state pension…..if the state pension is still in existence.

  • Reforms from next April mean people aged 55 and over can take their pension pot how they want..

 

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