Younger Brits believe they won’t be able to retire until they are at least 70 years old, research suggests.
Nearly three in five (56%) UK workers aged 18 to 34 expect to work until they are 70 or older, while only a quarter (27%) believe they will be able to retire before then, according to a survey of 2,000 by insurance company Canada Life.
Young people said these plans are mostly down to financial necessity, as a third don’t believe their pension will be enough to support them in later life — meaning they will need to keep working beyond the state pension age of 66 in the UK.
Another 14% of young workers don’t yet know how long they will need to work. A fifth (21%) don’t know how long their pension will need to last them, the survey found.
The average life expectancy for today’s 18-year-olds in the UK is 86 for men and 89 for women, according to official data.
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With the state pension age for this generation expected to be about 68 years old, this means those who retired as soon as possible would need funds for around 19 to 22 years.
A quarter of men could even live to be 96, and women, 97 — meaning they could end up needing enough funds to last them 28 to 29 years.
“There is general agreement the default 8% contribution rate won’t provide a decent standard of living in retirement for many people,” explained Canada Life’s technical director Andrew Tully.
“This may be why such a large percentage of 18- to 34-year-olds have seemingly resigned themselves to work well beyond the current state pension age.
“Savers face some stark choices — accept their fate, choose to work longer, or try to save more.”
He added: “As we see the state pension age moving ever upwards, we will see big shifts in how people prepare for and enjoy retirement with many more remaining economically active beyond traditional retirement age.
“This creates a new set of challenges for retirement providers, employers and these individuals.
“Traditional lifestyle investment models will be less relevant, while employers will need to think about how they support an ageing workforce.”
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