Insufficient pension savings mean half of workers cannot retire this year


People who planned to retire this year may have to work longer in order to afford a comfortable retirement.

Pension pots are not large enough for many people who had planned to retire this year.

Almost half of workers cannot afford to retire in 2011 and may continue to work for up to ten more years to boost their inadequate pension pots, according to a new study.

The research, carried out by Prudential, found that a third of the people who will reach retirement age this year would consider working for a couple more years if it meant they would receive a larger retirement income. A fifth of participants in the poll said they would work for an extra two to five years.

Almost one in ten respondents said they would be prepared to work for five to ten more years. On the other hand, one in five people said they would not consider working beyond their planned retirement age even if it means they have to contend with financial problems in the future.

However, the study also showed that 12% of participants said they do not need to work for longer because they have saved enough cash for their future already.

Vince Smith-Hughes, spokesman for Prudential, said: “This year will see the phasing out of the default retirement age, making it easier for those wishing to stay on at work. Additional retirement income is also becoming more important as the security of a defined benefit pension scheme disappears for many people”.

He added: “Seeking advice from a financial adviser should be a prerequisite to ensuring you achieve the level of pension income you want and need”.