Over 50s carry on working as retiring is too expensive

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Millions of over 50s can see no end to their working lives because they simply cannot afford to retire.

Poor returns on UK pension investments, low annuity rates coupled with increasing debts mean many approaching retirement are resigned to working well in to what they considered would be their retirement.

According to a survey by older people’s financial firm Saga, almost one in three (27%) over 50s will work beyond the state pension age of 65 years old.

The number of people working past retirement has already almost doubled since 1993 to 1.41 million.

The state pension age will rise to 66 years by October 2020, again to 67 by 2028 and then in line with increasing life expectancy.

“In 2012, the average retirement age will be 63 years, 130 days, which is 286 days later than in 2010 (62 years, 277 days),” said the firm.

“By 2025, people expect to work an extra 2 years and 186 days longer than today at 65 years, 316 days.”

Chief executive Roger Ramsden said: “While many people are working past the state pension age in order to keep up with the cost of living, some continue to work because they enjoy it and find it helps to keep them both socially and mentally active.

“It is important that those planning retirement are aware of their options, which could be the difference between retiring when they want to, as opposed to when their finances determine they need to. Research shows an alarming lack of awareness and understanding amongst those coming up to retirement.”

Meanwhile, a separate study by debt charity the Consumer Credit Counselling Service (CCCS) disclosed the number of over 60s with mortgage arrears of six months or more has soared by 44% in the past three years.

Further financial problems are also on the way for men as the European Union gender directive takes effect later this year. The law stops insurance company’s offering separate prices to men and women. As a result, annuity rates are expected to yield a retirement income of around 8% less per year than current rates.

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