‘Ten more years of work after retirement’

ALMOST half of older employees face having to work and save for more than a decade beyond their state pension age to maintain their standard of living, a report warns.

The Pensions Policy Institute (PPI) study warned that around half of workers between 50 and the state pension age will have to work for at least six years past their pension age, and most of these for at least 11 years, if they want to maintain a reasonable income.

Researchers examined how much longer today’s over 50s might need to work and save to meet target levels of retirement income.

They found that 45 per cent will have to work 11 years or more to maintain a target replacement rate of living, defined by the PPI as 50 per cent to 80 per cent of gross working life income, while a further 5 per cent will need to work for at least six years.

Joanne Segars, chief executive of the National Association of Pension Funds (NAPF), said: “Many people in their 50s will be stunned by the prospect of working for another decade after they start getting their state pension. It’s a huge ask.

“Those who are prepared to live on less in their retirement may still find they don’t have enough savings, so will have to work longer.”

The study comes ahead of a landmark overhaul of the system to tackle the pension savings crisis, which will see up to ten million people automatically enrolled into schemes from this autumn.