Slavery until you are seventy-years old will become the new normal
Retirement at 70 will be ‘new norm’
Retiring at 70 will soon be the “new norm”, as the number of Britons saving enough for old age reaches an all-time low.
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By Nathalie Thomas6:00AM BST 03 Jun 2013Comments379 Comments
Only 45pc of adults are putting enough aside for their retirement, according to a stark report from Scottish Widows – the lowest figure since the pensions giant began tracking savings nine years ago.
Households are prioritising living expenses, paying off debts and mortgage repayments over saving for retirement in the current uncertain economic climate, Scottish Widows found.
But despite pension saving being lower now than it was even at the height of the recession, Britons’ aspirations about how much money they hope to retire on have risen – highlighting a worrying gap between expectation and reality.
The average annual income Britons would feel comfortable receiving at 70 is £25,200, up from £24,500 at the last survey in 2012. However, based on current savings levels, an average person retiring at 65 is only like to receive about £3,860 a year in pension income. Even when topped up with the state pension, this would provide a yearly income of only about £11,400.
Leading pensions specialist, Tom McPhail of Hargreaves Lansdown, said that in 10 years’ time 70 will be the normal retirement age, as Britons are forced to work later to provide enough income for their twilight years.
“For a whole generation in their forties and fifties now, it is probably already too late,” Mr McPhail said. “They are going to have to work to 70 or beyond before they can afford to retire. For people in their twenties and thirties, there is still time to make a significant difference, but only if they can be persuaded to engage with their retirement savings.”
The Scottish Widows survey of 5,200 adults found one in five Britons is saving nothing at all towards their old age. Many adults in this country are also heading towards their retirement burdened by credit card debt, loans and mortgages.