Investment business Skandia today reveals that an increasing number of people are now accepting that they may not retire until beyond the traditional retirement age of 65 years old.
Data compiled from submissions on the company’s Retirement Route Planner tool (see the tool here: https://retirementrouteplanner.skandiatools.co.uk/), shows that the percentage of people listing their expected retirement age as 66 or older has increased from 15% in January 2013 to over 20% in July.
The easy-to-use tool not only calculates what an individual’s current pension provision may translate to at their chosen retirement age, it also gives an indication of how the future investment performance of their fund may affect the retirement income that is expected or required.
This significant shift in selected retirement age follows the much-publicised changes to the state pension age, which have forced many to re-evaluate when that time may be for them. Life expectancy is increasing at a rate of around two years every decade, with today’s 70 year olds having similar life expectancy to someone who was 60 in 1970.
This new version of ‘retirement’ life is beginning to take hold as recent figures* have indicated that there are already over one million people over 65 still in work and it is also anticipated that within two years there could be more 65-68 years olds in work than not.
This data is a further indication that retirement (or ‘later life’ as it could be renamed, as it is almost as likely to include work as not) is changing. The once distinct lines between employment and retirement or working age and old age are blurring.
Adrian Walker, Skandia’s pension expert, comments:
“The default view of a retirement starting at 65 is looking less and less like the norm and our figures appear to show that the public is becoming more accepting of that. However, while it would be easy to suggest that those people who now expect to retire later are doing so purely because they couldn’t afford not to, it would also be valid to suggest that some are planning on working beyond 65 because they choose to.
“There are a multitude of factors which have an impact on what a person’s later life looks like now and the traditional distinction between pension accumulation while in work, and income in retirement is not as clear as it used to be. With a person’s average life expectancy increasing, the amount of time spent in ‘retirement’, if it is taken at 65, is increasing exponentially. Therefore a reassessment of their retirement plans is certainly due for most, as well as how their income will be secured in that time.”
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