Younger generation given pension 'wake-up call'
A leading financial adviser is calling for people to start paying into a pension before it's too late, in the wake of government figures that show a huge leap in the number of over-65s who are still working.
Nigel Green, deVere Group's chief executive, said figures from the Office for National Statistics (ONS) that show the number of working over-65s has leapt 10% in the last year, should "serve as a wake-up call" to younger generations to put more aside for their retirement.
The number of people aged 65 or over in employment rocketed from 890,000 in the first quarter of 2012 to just under a million in the first quarter of this year, the ONS data shows.
Mr Green said: "Naturally, it's hugely positive if the over-65s who are working past the traditional retirement age are doing so because they choose to, but it's totally different if they're being forced to carry on working as they can't afford to retire.
"With this sharp year-on-year increase, I suspect the majority are working because they have to. These figures should serve as a wake-up call for younger people to ensure that they are putting enough aside for their mature years."
He added that people who fail to do so will probably have to work longer than they had anticipated, or potentially have to compromise their lifestyle during retirement.
"As a nation we're simply not saving enough," he said. "There needs to be a radical shift in the savings culture, especially as we're living longer meaning the savings have to last longer, and because in the future the state is unlikely to provide the same level of support as it has previously done, so we need to be more self-reliant."
A recent poll of 750 people carried on Moneywise.co.uk found that a third (30%) have no financial plan in place for their future.
In exchange for any lump sum – usually your pension fund – an annuity is “bought” from an insurance company and provides an income for life. When you die, the income stops. Annuity rates fluctuate daily and depend on your sex (although from 21 December 2012 insurers will no longer be able to use gender as a factor when calculating annuities), age, health and a number of other factors, so you have to pick the right one and, once bought, its terms cannot be altered, so seek financial advice.