Working until later in life is the best way to assure you live long and prosper, according to research by the Organisation of Economic Co-Operation and Development (OECD).
People around the world are having to extend their working lives to ensure a comfortable retirement, says the OECD pensions Outlook 2012.
The report looks at retirement saving trends across most of the world’s leading and most-developed economies and how governments are trying to tackle a seeming disinterest in pension saving.
As the only three countries with a retirement age of less than 65 years old, France the Slovak Republic and Slovenia stand against a clear global trend towards increasing retirement ages.
French President Francois Hollande lowered the age two years to 60 to keep an election pledge.
Meanwhile, the UK is moving towards retirement at 68, while retirement starts at 67 in the US, Spain and Norway.
The report recommends countries should encourage retirement saving and make pensions more attractive to younger workers by:
- Building a sustainable defined contribution systems that deliver reasonable returns
- Urge pension auto-enrolment with full compulsion
- Give workers financial incentives to save – with the report citing New Zealand, where the government contributes a lump sum for all pension savers.
- Ensuring better safeguards of investments, especially for annuities as a hedge against savers living longer
- Keeping pension fees and charges low
- Giving savers more choice over pensions
According to Head of the OECD private pensions unit Juan Yermo said: “We have relied too much on inertia, There is the need for either a platform or clearing house to be put in place to help members make clear comparisons between the different products on offer.
“The development of these recommendations will do much to strengthen the safety net against old age poverty which could increase as countries look to scale back state pension provision.”