One in five British workers believe that they will need to keep working into their old age in order to live comfortable, a new report claims. Workers are losing confidence in their ability to retire, fearing a lack of financial stability in their old age.
A new study from HSBC that highlights the worrying statistics also shows that over a third of British workers are ‘not preparing adequately’ for their retirement, with savings accounts and investments largely ignored by many younger workers.
A third of all workers have no form of retirement savings, and many have extensive debts that could prevent them from ever retiring. The report calls the current labour market the ‘Age of the Unretired’ and notes that concern over retirement is growing.
Many in government have echoed the report’s conclusions. Steve Webb, the minister of pensions, noted that while reforms to the pension system could soften the pain of planning for retirement for many workers, the current generation would likely need to work longer than their predecessors.
Mr Webb noted that it’s important for people to begin planning for their retirement as early as possible, instead of waiting until their career was coming to an end when the common ‘panic at 50’ tactic of last-minute retirement planning often emerges.
The report from HSBC shows that the UK has worse retirement saving habits than many other developed countries. British workers, on average, save enough to keep them financially afloat for just a third of their retirement.
In other countries, the gap between lifetime earnings and retirement savings isn’t so dramatic. Workers in Mexico and China save enough for half of their retirement, and United States-based workers save enough for two thirds of their retirement years.
While many workers will need to continue generating income during retirement, the drive to continue working is fairly low. Just two percent of workers plan to find a job during their retirement, and just seven percent plan to start a new business.
