Is retiring comfortably a thing of the past?

Since the early 1990s the numbers of people working past State Pension age (SPA) has been continuously on the rise. Although people choose to continue working for a variety of reasons, perhaps the most important is simply ‘for the money’.

However if this is why people keep working, for some it will never be enough.

A whopping 45% of those currently aged 50+ and in employment will have to work for at least 11 years beyond their SPA in order to attain a level of retirement income which maintains their standard of living.

And of course many may never reach this marker – for such people retiring will necessarily mean a drop in living standards.

This is the result of new research by the Pensions Policy Institute (PPI), sponsored by Age UK and three other organisations.

The research sets a level of income estimated to bring the equivalent standard of living in retirement, and then poses the simple question: ‘how long will people need to work to reach this?’

The following chart is taken from the report:

PPI chart on replacement rate by SPA

This could have important implications for a variety of reasons.

For example, it indicates that many people will want (or need) to keep working for longer than they may have anticipated. This impacts on individuals who may have to rethink plans for retirement, and provides a further imperative for employers to become more age-friendly.

Also, many people will not be able to work for this long. This is obvious for people who suffer from ill health, but also many who lose their job – even in good health – will find it difficult to re-enter the workforce due to ageist attitudes from employers.

However, the report also looks at the numbers of people attaining a minimum income standard – unrelated to their lifetime earnings – by the time they reach SPA. Happily, the numbers here are much higher (85%), but clearly many people will not be able to continue the same lifestyle if they have such a reduced income.

The research highlights issues facing people both sides of State Pension Age, and shows clearly just how uncertain the future can be without good employment and pension provision.

The full report is available on the Pensions Policy Institute website, and makes for a very interesting read.

Last year Age UK’s More Money in Your Pocket campaign helped 500,000 people put £120 million back in their pockets through free benefits information and advice. This year, we will continue to break down the barriers that prevent people from claiming. For more information, please visit

Remember us? guest blog – Yvonne Hunter, State Pension Age campaigner

Yvonne Hunter is one of 330,000 women born between December 1953 and October 1954 who will be will be affected by the Government’s proposals to speed up the equalisation of women’s State Pension Age to 65 by 2018.

I am 57 years old, born in May 1954 and was one of the women that were a part of the first group whose pension age was changed from 60. This change was made some years ago, 1995, and I was fully aware and accepted under rights of Equality that the age should be moved towards 65. Therefore for the past 15 years I have been planning to receive my State pension in July 2018, when I would be just over 64 meaning that I had accepted a delay of just over 4 years.

Now the Government’s proposal will push my State Pension Age to 66, which means a further delay of virtually 2 years and a loss in pension of over £11,000 plus further delays in receiving other benefits. Based on a SPA of 64, I have already made irreversible employment and financial decisions. However, women and men who were born after April 1955 were not expecting to receive their pension until age 65, thus they have a maximum of one year to wait for their SPA. Therefore I believe these proposals are unjust to the group of women who had accepted the earlier changes to their pension age without acrimony. At this stage we should not be expected to wait more than one further year to receive our state pension, as no man of a similar age will have had their SPA changed by more than one year.

The Pensions Bill will reach Report Stage in Parliament on the 18th October, this is the last opportunity for the Government to act. We want the Coalition to stick to the existing timetable, but at the very least we are calling on them to:

Mitigate the effects of these changes on the worst affected groups of women, those whose state pension age would rise by eighteen months or more, and put in place transitional arrangements to protect those who do not have sufficient time to plan for a revised Pension Age.

Ensure there is a clear plan of action as to how all those affected the change will be contacted to inform them of the implications.

Yvonne and many women like her have already had their state pension age raised once before and to do so again is deeply unfair.

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