New figures from a report by the Pension Policy Institute, "Retirement Income and Assets: the implications for retirement income of Government policies to extend working lives" show that half the workers aged between 50 and the State Pension Age will have to work at least six years past their SPA - and most at least 11 years - if they want to maintain a reasonable standard of living.
The report shows that 45 percent will have to work 11 years or more to maintain a target replacement rate of living while a further 5 per cent will have to work for at least six years.
The findings come in the wake of the latest unemployment statistics from the ONS which show older people are among the biggest victims of the UK's economic crisis. The latest figures show that the number of unemployed women aged 50-64 is up 27 percent on this time last year - a significantly bigger increase than any other age group.
The ONS figures also show that there are now 118,000 people aged 50 plus in the UK who have been unemployed for two years or more - a 45 per cent increase on this time last year.
Commenting on the PPI's report, Michelle Mitchell, Charity Director General of Age UK said:
"These figures show that the traditional pattern of retiring and living comfortably on a pension earned over many years of working has broken down.
"Lower annuity returns and other factors mean that more and more people will have to work past their state pension age - and often for many years - if they are to have enough money to live comfortably.
"The government must work to encourage employers to hire and retain older workers, and to provide training for those who need it if we are to avoid creating future generations of people in later life struggling to make ends meet."
Clive Bolton, ‘at retirement' director at Aviva, comments on the Pension Policy Institute findings:
"We have been delighted to work with the Pension Policy Institute on this research. Retirees now face both an increase in longevity and a challenging economic environment, with many remaining economically active past the state pension age. This report provides a much needed assessment of the actual impact working later in life could have on retirement incomes.
"Aviva's own research found many people continue to work in later life not only to boost their income, but to put their lifetime of wisdom and skills to use, with 80% of over 55s stating they would now be more confident in the workplace than in their earlier working lives. Increased income was the main driver for those who continued to work, but it was closely followed by the desire to interact with others and the benefits of keeping the mind active in older age.
"In 2004 the Pensions Commission stressed that people would need to both save more and work longer in order to supplement the state provision. The PPI's study underlines this fact. We recommend people approach retirement with a clear picture of their financial needs and that they take a holistic view of all of the assets at their disposition, in order to manage the transition into later life."
